question V                                                    You bought what??!?

What is the craziest thing you ever purchased with a credit card? Of course what I consider crazy may be incredibly important to someone else. As an example, that original Mr. Spock Star Trek figurine in the un-opened box may seem to be an incredible waste to some people, but to others it is the must have, Holy Grail of collectibles that completes years of tearful hunting. Personally, that PSA 10 1st Edition Charizard, Pokemon card has been on my purchase bucket-list for years. So when it actually appears on E-Bay, I belly up to my computer, credit card in hand and begin the long arduous process of bidding.  Crazy you say?  Not according to my 11-year-old son!

So what are people buying you ask? Well, a recent survey of over 2,000 people found out. Food, medical and car repairs top the list, but some other, rather strange things appear on the list. Are you guilty of any of these?

 

concert tickets

                                           Concert and/or sports tickets. (6%)

To some people, this is a must. Nothing beats going to your favorite venue and watching your team play. But as prices for concerts and sporting events continue to rise, so does the use of credit cards for this necessity. But when you consider the added interest to the purchase, the cost is higher still. And if you cannot find any other way to get the tickets than a Ticket agency or scalper, then good luck to you.

 

strip club

                                      Adult….ahem……”entertainment” (6.7%)

Lust sure can cause you to make rather foolish decisions. As shocking as it may be, men are actually four times more likely than women to use a credit card for this. And if this is your situation, than I would consider making sure that you open the monthly statement rather than your wife. Otherwise, as Ricky Ricardo was fond of saying,..”You have a lot of splaining to do…..!”

 

love my car

                                                           Cars (4.4%)

As they say, you pay for convenience. If going through the hassle of spending hours in an auto dealership haggling over price and options is not your cup of tea, then use a credit card. Right? Well….it’s probably not a good idea. Even with average credit, you can finance an auto with interest at around 5% – 7%, but credit cards average around 15%-23%, so do the math. Even if you are sporting a credit card with a small percentage rate and large enough available credit, unless you are planning to pay it off within 5 years, the lower interest rate over a longer period of time could mean you are paying too much for that vehicle.

 

college

                                                           College (4.7%)

Considering the high cost of tuition and other expenses related to getting that higher education, there must be a lot of people out there with stellar credit ratings and tremendous credit lines. But even if that is the case, why charge it? When comparing interest rates between credit cards and student loans it easy to see the cheaper way to go. And don’t forget to look into financial aid.

 

dragon tattoo                                                           Tattoos (3.3%)

Really?  If you don’t have enough cash to cover the cost of that dragon tattoo covering your back, you may want to wait.  Tattoo’s are forever, and it may feel like your credit card debt is too.

 

wedding credit

                                                       Weddings (2.6%)

I understand. This may be the most important day of your life, and with the ever-rising cost of getting married, you may not have any other choice. But consider this, starting out your new lives together with a large debt load may put added pressure into an otherwise beautiful start as a couple. Be creative. There are cheaper methods to getting married that will still bring many happy memories later in life.

 

bail credit

                                                               Bail (2%)

Yikes. Not much choice here I guess. Pony up money quickly, or spend the night in the slammer. Hmmm…credit card debt or spending some quality time with Jim, the fat, hairy guy covered in tattoos you get to share a cell with? Maybe he used his credit cards for some of his tats?  This may give you something in common to talk about.

 

funeral credit

                                                        Funerals (2%)

Funerals cost. And if you are older, this is something that you should consider looking into. Most funeral homes have burial trust’s set up for this very thing. Without coverage, it is an immediate, large expense that your surviving family may be unprepared for.  Unless they have some cash saved up, credit cards may be their only choice. 

 

pot credit II

                                             And finally … marijuana? (<1%)

Times are-a changing. With the rise of legal marijuana in some states, using a credit card for said purchase is on the rise. But be careful. Don’t follow up your recent shopping spree with a trip to the local 7-Eleven and stock up on Twinkies and mini-pizzas. This could add even more to your debt load.

So, what have we learned here? Make sure to get to your monthly credit card statement before your wife does? Perhaps a smaller and less dramatic tattoo? Perhaps growing a “garden” of your own? All valid points, but I think the more important lesson here is to use credit cards as a last resort. The questions you should always ask before you use your credit card, “Do I absolutely need this?” “Can I afford the new debt” and “Do I have any other choice.” If you answer yes to any of these questions, use the card, but pay off the balance quickly before the payments and interest put too strong a chokehold on you. And if your debt load does become too much to handle, consider Chapter 7 Bankruptcy. It works.

For more information about bankruptcy and how we can help solve your debt problems, please visit:  http://www.cantpay.com

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Category: Uncategorized

retirement

So you think you are ready to retire. Have you checked your retirement account? Are you ready now? For many Americans the thought of retirement income included Social Security, personal savings and their retirement accounts. But thanks to the “Great Recession”  savings and retirements have been all but depleted. And with the threat of a bankrupt Social Security Administration, it may be that most of us middle aged folk will be working our entire lives. Retire? Pshaw..!

A recent poll showed that over 59 percent of Americans were very or moderately worried about having enough money for retirement. question V                                                     So what happened?

Well, Social Security has been compared to a pyramid scheme that is just about ready to collapse. Fraud and overpayments have pretty much busted that entitlement. Savings? What’s that?  And retirement? For many Americans, this has been tapped to help with their current budgets. Much like using the equity in their homes during the times when home values rose unrealistically between 2005 and 2008, many people are just now starting to realize what exactly they have done.

In the years when values of real property where inflated, many people used the “phantom” equity in their homes as their personal piggy banks. Eventually, when the housing market collapsed, these people found their houses underwater and so began the great foreclosure rush in 2009. America is still trying to recover from this debacle.

Now, people are eyeing their retirement accounts as a source of income. But what other options are there? Rents continue to rise, gas and health care prices continue to skyrocket upward. And with the continued high unemployment, what are we supposed to do? Tap your retirement or eviction? Cash out or eat? Shrug

So we cash out. But consider the penalties. 10% early withdrawal to be exact. This coupled with your regular tax bracket could affect next tax season taxes. Now you owe the IRS which causes you to cash out more of your retirement, and so the circle continues until the retirement well is completely dry.  This has been such an issue recently in America, that president Obama’s original “Economic Rescue Plan” included a clause allowing people to cashout their retirements, up to $10,000,  penalty free. And while this may seem like a good idea, it has yet to be implemented. I am not holding my breath on this one.obama thumbs up

While cashing out a retirement may be necessary in these hard times. It must be managed carefully. If you are not paying attention, you may find yourself without anything to retire on in your twilight years.

It has been said that the economy is on the rebound and improving. Home values are finally improving and stabilizing and employment is slowly improving as well. But it will be a long road to recovery. So hang in there everybody. This too shall pass. We can all look forward to better times. Our grandparents survived the Great Depression and we too, will survive the Great Recession.unemployment line

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Category: Uncategorized

happy guy

Okay. You talked about it and now you have decided on taking out a “Reverse Mortgage” on your home. You don’t have to make a monthly mortgage payment?  You get cash from your home in monthly payments or lump sum cashout? It can even payoff your existing loan? I mean….how can you lose?

Many folk in their twilight years just do not have enough money saved for retirement. And Social Security? Pittance. So what are your options?  Sell your home and move into an assisted living  “community”?  Try to make ends meet and pray for a miracle?  Cat food?  Consider the Reverse Mortgage. But be careful. Hire an attorney or specialist to help you out. Contracts for Reverse Mortgage’s can be difficult and you want to make sure that you are not making a bad situation worse.

reverse mortgage

In most cases, Reverse Mortgages can be a great idea for helping with your finances in your retirement years. I have yet to hear complaints from anyone involved with a reverse mortgage. That is, unless that person is the heir to the property after their parents have passed. And therein lies the tricky part.

The deal was great for your parents, but now that you are looking forward to cashing in on your inheritance, it appears as though you may not get the house you were counting on.  After all, someone needs to pay for the loan that was taken. So what now?

Under federal rules, the heirs are supposed to be offered the option to settle the loan for a percentage of the full amount. This “settlement” is commonly known as the 95 percent rule. After someone has passed away, the heirs have 30 days to decide what they want to do with the house. If they wish to refinance the loan, they have six months to arrange for the financing. And, you may invoke the almighty……wait for it……95 percent rule! This “rule” allows you to pay 95 percent of the current fair market value of the property! (Any shortfall if the home sells for less than the debt is covered by a federal insurance fund, which all reverse mortgage borrowers are required to pay into each month). This could be a huge savings, especially if you took out the loan during a period of time when values were way up and later crashed.

reverse-mortgage-rules

But who determines the current value of the house? Why, the lenders of course. And even if they value the property accurately, in most cases the loan balance is substantially less than the value anyway.  So the 95 percent rule, while on it’s face sounds fantastic, may not be such a godsend after all.

And sometimes the lenders don’t always follow the “rules” and immediately after death, begin the process of foreclosing on the property. And, if you are not prepared, you will get lost in the bureaucracy and possible lose the home entirely. In fact there are several lawsuits pending from borrowers on just this issue. You must know your rights and be prepared. Hiring an attorney or specialist is always good advice. They may be costly, but consider the cost if you lose the home.

And if all else fails, and you do lose the home, certainly do not blame the parents! As strange as it may be, I hear a lot of complaining from people that their parents did this to them and now they do not have the house free and clear like they were hoping. Get over it! After all, bottom line, it was their house. They worked hard for it. Just be happy that they were able to stay in it, comfortably, until the end. And if it means that you did not get the house in the inheritance, so be it. Your parents were happy and comfortable. They deserved it.

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Category: Uncategorized

top ten II

In honor of the recent announcement of David Letterman’s retirement we have compiled our own top ten list. (minus the humor, sound effects and celebrity appearances).

And so….without further ado……. America’s Top Ten states for Foreclosures!

(Keep in mind that Nationally:  1 in every 1,058 housing units received a foreclosure filing)

No. 10: California: 1 in every 921 housing units received a foreclosure filing.

This is probably not a shock for those of us living in California. But the realization that there are states actually worse off than us may be a little eye-opening.

No. 9: Ohio: 1 in every 885 housing units received a foreclosure filing.

No. 8: South Carolina: 1 in every 850 housing units received a foreclosure filing.

No. 7: Delaware: 1 in every 818 housing units received a foreclosure filing.

No. 6: Connecticut: 1 in every 752 housing units received a foreclosure filing.

No. 5: New Jersey: 1 in every 619 housing units received a foreclosure filing.

No. 4: Illinois: 1 in every 603 housing units received a foreclosure filing.

No. 3: Maryland 1 in every 543 housing units received a foreclosure filing.

No. 2: Nevada: 1 in every 533 housing units received a foreclosure filing.

And currently, the number one state for foreclosures………..drum roll please.

No. 1 Florida: 1 in every 346 housing units received a foreclosure filing.

Interesting to be sure. Even though we keep hearing about a mortgage turn around, foreclosures are still happening in record numbers. So what about that number 10 state, California? How about a Top Ten list for counties in California? Okay…you asked for it. So if you have recovered from the excitement of the previous top ten list, then here are the following numbers as of March 4, 2014. top ten

No. 10  Santa Clara:  1953 pending foreclosures as of 3/4/14.

No. 9  San Joaquin: 2091 pending foreclosures as of 3/4/14.

No. 8  Fresno:  2656 pending foreclosures as of 3/4/14.

No. 7  Kern:  3087 pending foreclosures as of 3/4/14.

No. 6  Orange:  5399 pending foreclosures as of 3/4/14.

No. 5  Sacramento:  5506 pending foreclosures as of 3/4/14.

No. 4  San Diego:  6149 pending foreclosures as of 3/4/14.

No. 3  San Bernardino:  9117 pending foreclosures as of 3/4/14.

No. 2  Riverside:  10,228 pending foreclosures as of 3/4/14.

And the number one county for foreclosures in California…………drum roll……..

No. 1  Los Angeles:  23,294 pending foreclosures as of 3/4/14.  Yikes !!

As of March 4, 2014, 8.56% of all homes in California were vacant!  Yikes again !!!

So what do all these numbers mean?  I don’t know. So many things affect so many other things in this industry. They call it the butterfly effect. “Does the flap of a butterfly’s wings in Brazil set off a tornado in Texas?” This is the also known as the Chaos Theory. And if anything is currently chaotic, it is the housing market.

It appears as though we still have a long way to go in the housing recovery. But it does appear as though the worst is behind us. So keep hangin’ on. Time heals all wounds. Maybe one day the word “equity” will return to our vernacular.

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Category: Uncategorized

question IV

I have been asked this question a thousand times. The quick simple answer is “no”. There is no law that requires both spouses to file for bankruptcy when one spouse needs to file. However, it is not as simple as that. The first thing to consider is if the “non-filing” spouse co-signed on any of the filing spouses debts. If so, then it would probably be beneficial for both to file jointly. If not, the creditor will more than likely just continue collection efforts against the spouse that did not file.

If the “non-filing” spouse did not co-sign for any of the debts, than the next question is if the “non-filing” spouse has any debts of their own. If so, then again, they may want to file jointly to get a much cleaner “fresh start” after the bankruptcy discharges. Otherwise, after the spouses bankruptcy is completed, they are still having to make payments on their own debts which may eventually lead to them having to file their own bankruptcy later.

If the “non-filing” spouse did not co-sign for any of the debts, and has little or no debt of their own, then they may consider not filing with their spouse to keep their credit score in tact. However, and this is where the fun begins, they may end up having to pay for their debts anyway!

question V

You heard right. The non-filing spouse could be held responsible for the debts of the filing spouse, even though they had nothing to do with those debts!  How does this happen?

Community Property.  For those of us lucky enough to live in the Golden State, be aware, California is a community property state. When people think of community property, they think of houses, cars and bank accounts. But what most people do not consider is that debts are also considered to be community property!  Yikes! So legally speaking, absent a Prenuptial Agreement, debts that are incurred during marriage are the responsibility of both spouses! But before you run off to file for divorce there are many other factors to consider.

The real consideration is “can they” versus “will they”

Can they pursue me? If you live in a community property state, then yes it is possible. Laws vary from state to state so as in any legal matter, it is best to consult a local attorney.

Will they pursue me?  Probably not. But why not?  Community property laws are very very tricky. And are very difficult to enforce. The same law that says they can pursue you also says that they cannot. What does this mean?  As an example….lets say your spouse files for bankruptcy and you live in a community property state. The creditor may decide to call you trying to collect, they may even go as far as to sue you in court. But it would be very difficult for them to collect. They could try to garnish your paycheck, but your paycheck belongs to your spouse due to community property laws. And since your spouse filed for bankruptcy, they cannot garnish any of his income (including income from the non-filing spouse)  They could try to levy your bank account, but if your spouse is also on the bank account, then again they cannot touch it.

So community property laws are tricky and most creditors do not want to deal with it. They typically will simply close the file once they receive notice of a bankruptcy filing and the debt goes away. So, while not filing may be a gamble, it is a small gamble. And in the worst case scenario, if a creditor is getting aggressive with the non-filing spouse. They could always turn around and file a bankrutpcy case themselves.

When you are considering filing for bankruptcy, it is best to speak to an attorney.They will be familiar with local laws and can go over which options best fit you and your families needs.

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Category: Uncategorized

fines

Most of us have been there. You have a bad month financially and cannot pay your current bills. Not too long ago, if you failed to make a credit card payment, the payment was simply added on to the next month’s bill. These days, if the payment is a day or two late the harassing phone calls begin. If you are in a real tight spot and still cannot pay your creditors, after a month or so, the collection agencies begin their reign of terror. But when it comes to collection attempts, how much is too much?  There are laws that govern creditors collection efforts. These are regulated by what is known as the Fair Debt Collection Practices Act. And anyone that violates these laws can be penalized.

But as with any law, there are some that believe that they are above it or exempt from it. Perhaps the creditors think that most people would not spend their time and money defending themselves.  It is a risk that some collectors are willing to take. They think the benefits outweigh the risk. Just like that guy speeding in and out of traffic. He may get to work a  minute or two earlier, but if he is caught by the Highway Patrol, the penalty could be stiff.  Benefit vs. Risk.  In this scenario, Low Benefit – High Risk. But for a creditor they subscribe to the thought that there violations are High Benefit – Low Risk.

And so it was that the world’s largest collection agency, Expert Global Solutions, and its subsidiaries (ALW Sourcing; NCO Financial Systems and North Shore Agency, Inc.) were accused of calling people over and over again — including after being told to stop — as well as calling early in the morning and late at night, at consumers’ workplaces, and leaving messages that included details of the debt. All this in violation of the Fair Trade Collection Act, and its established rules of conduct.

debt-collector

And what, you ask, was the penalty? A whopping $3.2 million! The largest penalty ever against a third-party collection agency.  So maybe now they will rethink their “Low Risk” policies.

The Fair Trade Collection Practices covers a great many things that creditors may and may not do. This includes:

  • Harassment. That includes threats of harm, the use of obscene language or repeatedly calling.
  • Lying. They can’t claim to be lawyers or government workers, allege you have committed a crime or send you documents and assert they are legal documents when they aren’t.
  • Cheating. They can’t collect extra fees beyond what you owe, to threaten to take your property (unless they legally can), or contact you using a postcard.
  • Calling at all hours. A collector can’t call before 8 a.m. or after 9 p.m., unless you say they can, and they can’t call you at work if they’re told you can’t receive their calls there.

debt collector IVEven if a creditor is collecting within the boundaries of the law, you can ask them to stop, and they must, by law, stop. How? Write a letter to the collector (keep a copy) and send it by certified mail and request a return receipt. “Once the collector receives your letter, they may not contact you again, with two exceptions: a collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action, like filing a lawsuit,”according to the FTC  “Sending such a letter to a debt collector you owe money to does not get rid of the debt, but it should stop the contact.”

An acquaintance of mine told me how he returned home one night after work, only to find almost 15 messages from a collection agency trying to collect. He composed a “Cease and Desist” letter and the next day faxed it to the collection agency. When he got home that night, he found 10 messages from the same collection agency. The next day he faxed the letter almost a dozen times throughout the day then received only 5 calls. The next day he put the fax machine on his desk and continually faxed his letter to the creditor all day long. He calculated over 50 times that day. When he got home, only one message and the next day the messages stopped entirely.

We have all, at one time or another, fallen on hard times financially. I don’t blame a creditor for calling and trying to get the money that is owed to  them, but they must maintain civility and abide by the laws that govern them. We are all human beings trying to live and work together on this big blue marble. But if someone gets out of line, that does not mean we should simply roll over and take it. We, the consumer, have rights. And we must not be afraid to assert those rights when appropriate.

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Category: Uncategorized

2014 3

Well, another year has passed and we now look forward toward 2014! So time to break open the champagne, hold your loved ones close and sing “Auld Lang Syne”.

So what about ‘Auld Lang Syne”?  Most of us can hum the song and of course sing the closing line “Auld Lang Syne”, but how many of us know what it means?  The original poem was written in 1788 by Robert Burns and eventually was set to the tune of a traditional folk song. The original Scottish, Auld Lang Syne, is literally translated as “Old Long Since”. Perhaps a more understandable meaning could be “Old Times” or “days gone by”.  It’s use in the traditional song could loosely be translated as “for the sake of old times”.  While it may be customary in the United States to sing this solely at New Years, much of the rest of the modern English-speaking world, will also sing the song at funerals, graduations and for farewells to end other occasions. It is to sung to remember the past. 2014 2

Should old acquaintance be forgot,
and never brought to mind ?
Should old acquaintance be forgot,
and old lang syne ?

CHORUS:
For auld lang syne, my dear,
for auld lang syne,
we’ll take a cup of kindness yet,
for auld lang syne.

And surely you’ll buy your pint cup !
and surely I’ll buy mine !
And we’ll take a cup o’ kindness yet,
for auld lang syne.

CHORUS
We two have run about the slopes,
and picked the daisies fine ;
But we’ve wandered many a weary foot,
since auld lang syne.

CHORUS
We two have paddled in the stream,
from morning sun till dine† ;
But seas between us broad have roared
since auld lang syne.

The past may not always be happy, but it is what brought us to this particular moment. The past makes us who we are today.  It is a part of us and must not be lost. It is important, particularly at this time of year, to remember our past. Remember loved ones that we may have lost, the personal triumphs or financial disasters. The heart-aches as well as the joy.

If 2013 was not the best of years for you, don’t simply erase it from your collected memory. Instead, remember and embrace it. And with the memory, perhaps the new hope that the coming year will be better.

So raise your glasses! Say goodbye to 2013 and say hello to 2014. It is going to be a wonderful, tragic, confusing and beautiful new year!

2014 4

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Category: Uncategorized

statute of limit

Statute of Limitation laws are complex and very confusing.  The idea is that there is a limit of time after an “event” to take legal action. For example, in California,  if I drive my car through your living room, you have 3 years to sue me.  However, if I “accidently” punch you in the head, you have only 2 years to sue me. But what about debts? That’s why we are here after all.

Generally speaking, a creditor can no longer sue for a bad debt after 4years. But that does not prevent collection attempts. The creditor, after 4 years, can still try to collect on the debt, they just cannot sue you in a court of law. But the real tricky part is avoiding the creditor for those 4 years. And if you accept any type of responsibility for the debt during this time, the clock “resets” and the 4 years starts all over. So if during this time frame your get a collection call, be VERY careful what you say.

You have the right to remain silent, anything you say can be used against you in a court of law.

miranda rights

Sound familiar?

So when does this 4 year period start? I’m glad you asked. For the most part it is the date of the last “activity” on the account. This could be the last purchase date, or the last payment date. Or, if you were not paying attention to the previous paragraph, it could be the date of the last “acknowledgement” of the debt. The laws vary state to state, so as always, it is best to speak to a local attorney regarding the specifics.

I have heard on many, many occasions, that someone who is considering filing a bankruptcy may be close to the statute of limitations and does not need to file. But remember, the most important thing in a case like this, the statute of limitations only prevents a creditor from suing you in a court of law. The bills and phone calls (ohhhh……….the phone calls!) do not have to stop. They may continue to make your life miserable.

So, unless you are planning to go off “the grid” and live in a shack somewhere in the deep forest, the Statute of Limitations does not mean a whole lot.

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Category: Uncategorized

disappearing income

I admit, the title may be a little misleading at first, but if you follow me, it will eventually make sense.

Once upon a time……..our Federal Government had a plan. Revamp the bankruptcy code. Or…fix something that was not broken.  Spear-headed by Citibank, the goal was to make bankruptcy so difficult that very few people would be able to file for bankruptcy protection. This did not happen however. And when the legislation finally passed and the Bankruptcy Reform Act of 2005 was the new law of the land, many economists called it the worst piece of legislation every passed by Washington. Well, a lot has happened since then and it seems Washington has been passing a lot of new legislation, each one worse than the one before it. “Obamacare” anyone?  But I regress.

Many parts of this new law would contradict themselves. One line would say something and the very next line would immediately contradict it. Nobody was able to make any sense of it. (Sound familiar?) It took many years of sifting through this mess before things began to clear up. But, here we are 8 years later, and there are still some loose ends that are being worked out. And this brings us to our topic… the incredibly, mysterious, vanishing income!!!!!!

disappearing income III

When the bankruptcy reform act was passed, it include a new form called…….The Means Test…..dun..dun…duh!!!!   This beauty was to pit your gross income to the average gross income for the same family size in your state. It was a completely fictional budget that would determine whether or not a person “qualified” for bankruptcy protection. The strange thing was that income under the Social Security Act was not considered to be income for the purpose of this “means test” and was not included. But oddly enough, the bankruptcy petition income schedules were required to include Social Security income.

So an odd conundrum was now in effect, the Means Test would state that your qualify (as a result of not listing Social Security income) but the income schedules would state that you do not qualify (as a result of listing Social Security income). So what’s a person to do?

Many elderly folk were forced into a consolidation bankruptcy called a Chapter 13, which required them to make monthly payments to a bankruptcy trustee. Payments that they could not afford. Others simply did not file and were forced to have to deal with their creditors.

But after years of consideration by the courts, it has finally been determined that income under the Social Security Act is not to be considered as income at all for the purpose of bankruptcy. Finally!  And it only took 8 years!

If you have been told that you do not qualify for Chapter 7 due to your income from Social Security, or if you are currently in a Chapter 13 that is using your income from Social Security, you may want to reconsider. Talk to an attorney and see what can be done. The flood gates have been opened and many people are converting their case or modifying them due to this vanished income.

So, if you collect income from Social Security, forget about it. It really is not there…

 

disappearing income II

For the purpose of bankruptcy anyway.

So, maybe in 8 years or so, we will get this Obamacare thing finally straightened out and we can all get our insurance back to normal. But until then, hold on to your hats and glasses, this is going to be a long and bumpy ride.

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Category: Uncategorized

guarding the castle II

Time and time again, when discussing bankruptcy, I am asked if they can protect their house when they file. This is an extremely important issue to those with homes that are contemplating filing for bankruptcy protection. So lets start with the wording of the question. “Can I protect my home?” Home should be changed to “equity”, as in “Can I protect my equity?” When a Chapter 7 bankruptcy is filed at court, the court appointed Trustee will review your assets. The goal here is that if a debtor owns too many assets, then the court will begin the process of liquidating that asset.  The asset, in the case of a home, is not the actual home per se, but the equity in the home. This may sound scary, but in a vast majority of cases, these assets can be protected. Equity in property such as vehicles and homes, retirement accounts and even toys such as jet-skis, dirt bikes and trailers are possible to protect.

The bankruptcy court allows certain “exemptions” to property to protect the property from liquidation by the court. These exemptions can be confusing and you should discuss your particulars with an attorney. But in most cases, equity in a home can be protected.

As with any legal matter, it always best to discuss your case with an attorney. Particulars of a specific case change depending on many things and having an experienced attorney on your side would be very beneficial. You do not want to go to your bankruptcy hearing, and finding out, only then, that you are not actually entitled to a particular exemption and that the court is going to liquidate your property.

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