Archive for the ‘Miscellaneous News’ Category

On the road to financial freedom every dollar counts, but many people throw away money every day because they don’t know it’s available. It’s not too late to get on the path to eliminating debt and reaching financial responsibility. Are you missing out on these valuable benefits?


you might have these benefits

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1. Retirement Fund Matching on your retirement contribution

  • Many companies offer to match up to a certain percent. It’s an automatic return on investment.

2. Forgotten Retirement Accounts

  • Nearly half of Americans abandoned a retirement plan with a previous employer.
  • Almost 20% of those accounts are worth $50k or more.
  • Consolidate old accounts with your current 401k or IRA to avoid losing track of old retirement plans and paying unnecessary maintenance fees.
  • How to find it: Contact the Plan Administrator at your former employer.

Discounted Employee Stock Purchase Plan

  • Buying discounted stocks is an automatic return on investment in the amount of your discount.
  • There are tax benefits to holding the stock at least one year past purchase date and two years past offering date.
  • WARNING! Diversify your holdings. No single stock should be more than 5-10% of your entire portfolio.

4. Corporate Discount and Partnerships

  • If you work for a large corporation, you may be able to get discounts for your cell phone plan, gym membership, even on retail purchases like computers.
  • Many employers are members of employee benefit programs that offer discounted prices at amusement parks or on movie tickets.

5. Free or Discounted Estate Planning

  • Avoid costly legal battles and unnecessary medical care by detailing your healthcare wishes up front. Local hospitals will provide a basic health care directive. Or download a state-specific form from the National Hospice and Palliative Care Organization.
  • Draft legal documents like simple wills and power of attorney using free or low cost online options.
  • TIP! Drafting your own documents can save you money, but always protect yourself by having an attorney look over your final document to avoid costly mistakes!

6. Lost Pension Benefits

  • Some pension plans are partly insured by the Pension Benefit Guaranty Corporation. (PBGC)
  • Use the Unclaimed Pension Search to discover missing pensions from a forgotten plan. Many people assume that bankruptcy of their employers also wipes out their pensions.
  • PBGC has almost $197 million in unclaimed pension benefits for over 36,000 people.

7. Spousal Social Security

  • You are entitled to benefits equal to up to 1/2 of your spouse’s full retirement amount.
  • Spousal benefits do not decrease your spouse’s benefits.
  • Being divorced does not mean you can’t collect spousal benefits if you were married for at least 10 years AND you have not remarried.
  • Spousal benefits are paid even if you have never worked a job which contributed to Social Security.

How to collect the maximum benefit: Spousal benefits + your own (if your Social Security benefit will be higher).

  • 1) Apply for spousal benefits upon reaching full retirement age.
  • 2) Allow your Social Security benefit to grow to its maximum payout.
  • 3) Apply to switch to your own Social Security benefit.
  • TIP! Unmarried children under the age of 18 (with some exceptions) may also be eligible to collect your Social Security benefits.

8. Spousal Survivor Benefits

  • Social Security can act as a life insurance plan in addition to a retirement plan.
  • Lump sum survivor benefits are only $255.
  • But! Monthly benefits for survivors can be equal to as much as 100% of your benefits based on the age and circumstance for you and your family.
  • Note: Survivor benefits cap generally around 150-180 % of your basic rate.

Provided by Total Bankruptcy.

Make the most of Your Benefits

Taking care of your finances requires and careful eye out for any opportunity. Total Bankruptcy helps you realize your financial potential. See our pages on Employee benefits in Bankruptcy and Seven benefits of filing Bankruptcy.

Wednesday, November 21st, 2012

The Economy Gives Thanks

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Thanksgiving was initially declared a national holiday in 1863 by Abraham Lincoln, and was celebrated on the last Thursday of November.

Fast forward to today: the United States celebrates Thanksgiving on the fourth, though not necessarily the last, Thursday of November.

How did this change come about? We can thank Mr. Economy.

The change took place during President Franklin Delano Roosevelt's time in office; a time that saw the country in a deep economic depression. The man credited with talking President Roosevelt into changing Thanksgiving from the last Thursday of November to the fourth Thursday was Fred Lazarus, Jr.

Fred Lazarus, Jr. was the founder of Federated Department Stores (FDS), which most of us know now as Macy's. Lazarus was concerned that a late Thanksgiving would give customers fewer dates to shop for Christmas presents at FDS and other department stores.

In both 1933 and 1939, Thanksgiving fell on November 30th, and because most consumers did not start Christmas shopping until after Thanksgiving, businesses were worried about losing more money.

So, in 1939, President Roosevelt proclaimed Thanksgiving would be the fourth Thursday of November. This shifted the holiday to November 23rd instead of November 30th, causing some chaos throughout the country.

Big businesses were pleased but smaller businesses were not, fearing they would lose more money to big businesses. Calendar makers were out of luck with every calendar they had pre-printed for the coming years. Schools had to shift their schedules to adjust the days off.

The chaos caused some states to defy the Presidential Proclamation and continue to celebrate Thanksgiving on the last Thursday of the month. This in turn caused more problems as some families living in different states did not get off work or school on the same day of the year.

This lack of unity led to Congress passing a law on December 26, 1941 stating that Thanksgiving Day would be celebrated on the fourth Thursday of November every year, therefore, extending the Christmas shopping season in years with five Thursdays in November.

This change has been linked to the birth of "Black Friday", which has become the biggest shopping day of the year. Fred Lazarus, Jr. was likely very thankful for the official change in dates because afterwards, "Black Friday" became FDS's most profitable day, nationally.

Historically, department stores all over the nation, including Macy's, sponsored Thanksgiving Day parades, using them to advertise for "Black Friday" and the Christmas rush.

Over the years, "Black Friday" has led to "Cyber Black Friday" and "Cyber Monday" which refer to the increase in online shopping sales.

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The Midwestern part of our country is known for hospitality and hard workers. Now, the people of the Midwest are known for its good credit scores too.

Experian, the credit reporting agency, has analyzed the credit and debt habits of Americans and developed a list of the cities with the best overall credit scores.

Know a lot of people that have filed for bankruptcy because they’ve gone into debt? You might not live in one of these cities, but don’t fret. Experts say that regional statistics like the numbers that Experian has compiled only shows habits of large groups on people instead of individual trends, so if you’re left off the list don’t feel too bad.

Within the numbers lies valuable information about the state of our country and the citizens who live in a down economy. According to the data, the average credit score is 749 and the average debt is $24,542.

That may mean very little to someone who is struggling with debt much higher than the average American’s debt or facing a bottom of the barrel credit score, but it’s important to note the overall statistics so we can get a snapshot of what Americans are facing during these tough economic times, according to experts.

Without further adieu, the top 5 cities with the best credit scores across America in 2012 according to CNBC.

1. Wausau, Wisconsin

Four of the top 10 cities are within the state of Wisconsin, with Wausau being the top dog. Amazingly enough, Wausau wasn’t even on the list last year.

Credit Score: 789
Debt: $22,439
Number of Late Payments: 0.27
% Credit Available: 77.52
Number of Open Credit Cards: 1.71

2. Minneapolis, Minnesota

Last year Minneapolis topped this list. Keeping the Midwestern theme alive, they rank in at number 2.

Credit Score: 787
Debt: $24,994
Number of Late Payments: 0.26
% Credit Available: 73.45
Number of Open Credit Cards: 2.08

3. Madison, Wisconsin

Despite slipping from number 2 last year to number 3 this year, Madison, Wisconsin is still sporting healthy numbers. The second of the Wisconsin wonder cities ranks in at number 3.

Credit Score: 785
Debt: $23,533
Number of Late Payments: 0.27
% Credit Available: 75.90
Number of Open Credit Cards: 1.79

4. Cedar Rapids, Iowa

Also falling one spot this year is Cedar Rapids. However, just like the city that is one ahead of it, Cedar Rapids is showing very good numbers still.

Credit Score: 781
Debt: $23,628
Number of Late Payments: 0.32
% Credit Available: 76.57
Number of Open Credit Cards: 1.82

5. San Francisco, California

The only city to maintain it’s position from the previous year, San Francisco sports incredible numbers for such a big city that resides in a state that is amid a budget crisis and has one of the highest per property cost.

Credit Score: 781
Debt: $23,973
Number of Late Payments: 0.30
% Credit Available: 72.83
Number of Open Credit Cards: 2.02

Today’s younger generations have a shockingly low level of financial literacy, and the trend has been growing worse over the past few years, according to a recent report in USA Today.

Sources say that the average person in his or her 20s has a total debt of $45,000, which includes common debts like credit card debt, student loans, and home mortgages.

With such remarkably high levels of debt, it’s little wonder that hundreds of thousands of young Americans choose to file for bankruptcy every year.

Low Levels of Financial Literacy Lead to Rising Debts

The financial picture for young Americans is pretty bleak, and sources suggest that this is a direct result of low financial literacy:

  • Financial literacy in high schools. According to the Treasury Department and the Department of Education, which teamed up to survey financial literacy in U.S. high schools, the future does not look bright. The average score on a financial literacy test administered last year was a 69 percent, which would barely qualify as a passing grade in most classes.
  • Education gap. Such low levels of financial literacy are no surprise, given the total lack of attention personal finance is given in American high schools. Fewer than half of all states require high school students to take an economics class, and fewer than 20 percent of states make their students take a personal finance class, according to a study from the Council for Economic Education.
  • Link between education and lower debt. Not surprisingly, the 13 states that do require their students to take a personal finance have much higher rates of financial literacy. And students who took these courses were much more likely to avoid credit card debt, according to sources.

Youth See Bleak Financial Picture

In addition to the low levels of financial literacy, a bleak economic outlook has also crippled younger Americans’ ability to secure jobs.

The unemployment rate among youth is higher than 12 percent, which is significantly higher than the unemployment rate for most Americans, which is currently hovering around 8 percent.

And this comes at a time when younger Americans desperately need income to pay their debt. The average student in the class of 2010 owes roughly $25,000 in student loan payments, according to The Project on Student Debt.

Moreover, the average person between the ages of 20 and 29 owes almost $2,000 in credit card debt. Many experts claim that poor financial literacy is directly linked to these disturbing levels of debt.

Tax debts and celebrity seem to go together like bread and butter, if a recent report from USA Today detailing the financial troubles of several different entertainers is to be believed.

Celebrities tend to be susceptible to accruing large amounts of tax debt because their income, while often large, is so unpredictable, which can make tax planning very difficult.

And the high rate of tax debts has led many celebrities to file for bankruptcy. Tax debts may be eliminated in bankruptcy, but only in some circumstances, and bankruptcy courts are unwilling to help people whose tax debts are a result of fraud or other criminal activity.

Tax Debts and Bankruptcy for Celebrities

According to a report in USA Today, celebrities have a tradition of gathering staggering amounts of tax debt. Entertainers who have run afoul of the IRS include:

  • Lionel Richie. Earlier this month, the IRS issued a $1.1 million tax lien on the famous singer for taxes he allegedly failed to pay in 2010. Interestingly, Richie has no history of prior financial problems, and he is one of the top-selling musicians of all time. So, this may be a temporary blip for the performer, and he recently said in a statement that his tax problems will be “handled immediately.”
  • Other musicians. Lionel Richie certainly doesn’t have a monopoly on tax trouble among musicians. Sources say that Glen Campbell owes the IRS more than $100,000, Vince Neil owes the government $370,000, and singer Roberta Flack is more than $150,000 in debt to federal tax collectors.
  • Famous athletes. According to sources, boxing hero Floyd Mayweather Jr. owes almost $3 million in unpaid taxes, while Dennis Rodman, the colorful former basketball star, owes a comparatively paltry sum of $371,000 to the tax man.
  • Lindsay Lohan. Of course, no list of celebrities in trouble would be complete without the queen of gossip magazines. The former child star reportedly owes roughly $230,000 in unpaid taxes.

Discharging Tax Debts in Bankruptcy

Some of these celebrities may try to discharge debts to the IRS in bankruptcy court, but their task will not be easy.

Tax debts may be eliminated in bankruptcy, but only if they are not the product of fraud, are income taxes, are more than three years old, and meet a few other requirements established by bankruptcy law.

Of course, bankruptcy may help many people eliminate other forms of debt, such as credit card debt or medical bills, which could free up funds that could then be redistributed towards repaying Uncle Sam.

The much-publicized American Airlines bankruptcy case got more press last week when the company announced changes to plans it had published to terminate pensions for current and future retirees as part of bankruptcy cost-cutting measures.

Now, it seems, American will only freeze the pensions, and the freeze (at present) will only apply to ground crew members and flight attendants (pilots’ pensions will be handled differently; see below).

Employees whose pensions are frozen will not be eligible to receive additional benefits beyond what they have currently earned; however, they can expect to collect pensions when they retire, up to the amount they currently qualify for.

A Delicate Financial Game

The details of the pension negotiations demonstrate just how tricky a corporate bankruptcy case can be. Here’s a look at what’s going on behind the scenes as American attempts to figure out how to handle the pensions of its pilots.

  • Before the bankruptcy, pilots for American (who received the largest pensions of all employees) had the choice of taking their pension payments over the course of their retirement or of taking an initial lump-sum payment, then collecting smaller payments during the course of their retirement.
  • Prior to announcing the pension freeze, American apparently had plans to hand over the pension matter to a federal government agency, which would have likely instituted stricter limits on the amount of pay pilots could receive each year (at present, pilots who retire at 65 can earn $54,000 per year in retirement; older retiring pilots can earn more).
  • In bankruptcy, American is hoping to eliminate the option for pilots to receive a lump-sum payment. The company is worried that pilots would retire en masse to collect their lump payments in a hedge against further financial problems that would lead to a government takeover (and smaller lump payments). American, it seems, is worried that it would lose so many pilots to retirement that it would be unable to continue flying planes.
  • As many as a third of the pilots currently working at American would apparently earn less from their pensions if the federal government takes over payments.

As American’s bankruptcy negotiations play out, pilots and executives alike are attempting to hedge their bets to maximize their benefits. According to the Washington Post, however, American at present does not have enough money set aside to cover pensions as they now stand.

A failure to put enough money aside over the years led to the current shortfall, and unless the company is able to find additional money to transfer to pension funds during the bankruptcy reorganization, the future of employees’ pension payments remain hazy.

Wednesday, February 1st, 2012

Bankruptcy Class Action Settlement Update

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In 2009, a class action lawsuit brought in California challenged credit-reporting bureaus TransUnion, Equifax, and Experian with improperly reporting debts discharged in bankruptcy. The defendants (that is, the credit-reporting bureaus) eventually came to a settlement with the plaintiffs (the people responsible for bringing the suit), to the tune of $45 million.

The court approved the settlement by issuing an Order Granting Final Approval, but on August 12, 2011, the defendants filed a brief challenging that order, in regards to attorney fees and costs of the case. The result of this appeal won’t be known until at least later this year: the deadline for Appellants to file relevant briefs with the court is January 23, 2012, and Appellees have until February 24, 2012.

Will You Get Settlement Money?

The lawsuit was brought because Equifax, Experian, and TransUnion improperly reported debts that had been discharged in bankruptcy on consumers’ credit reports. Rather than noting that these debts were “discharged through bankruptcy,” the credit bureaus noted that they were “120 days late” or that they had been charged off by the credit issuer.

Incorrectly reporting the status of a debt is illegal (which is why the lawsuit was filed), but it also caused a lot of grief for the people affected. When a debt is still reported as active, debt collectors may try to collect on that debt.

The result was that people who had filed for bankruptcy and gone through the entire bankruptcy process precisely to eliminate their debts and stop getting hassled by debt collectors were having to deal with debt collectors anyway (along with the stress of trying to sort out why their credit reports were incorrect).

You are eligible to collect some of the settlement if…

  • You are a member of the “class” represented by this class action case. To be a part of the class, you must have received a debt discharge under Chapter 7 AND had a credit report issued by one of the defendants (i.e. the three credit reporting bureaus) between March 15, 2002 and May 11, 2009 with incorrectly reported discharged debts.
  • You must have submitted a claim form with relevant information no later than November 30, 2009.

If you missed the deadline, however, don’t worry too much. Even though the settlement amount seems large, it will be spread out over so many individuals that it likely won’t result to more than a few dollars per person.

If, however, you’re interested in exploring other legal options regarding errors on your credit report, you may want to consult with a lawyer about the recourse available to you.

A few weeks ago, Sean Quinn, once the richest man in Ireland, filed for bankruptcy protection. But according to sources, his bankruptcy filing has not gone the way he imagined it. First, Quinn (who made billions in construction and real estate ventures and lost it through a bad gamble investing in Anglo-Irish Bank), was not permitted to file his bankruptcy petition in Northern Ireland.

Like many other “bankruptcy tourists” in the Republic of Ireland, Quinn apparently wanted to take advantage of the United Kingdom’s more lenient bankruptcy laws to make his case. He was thwarted, though, just recently, when a court ruled that he had misled the Northern Ireland bankruptcy authorities about the hub from which he conducted most of his business.

Now, filing for bankruptcy in the Republic of Ireland (which is independent of the U.K., unlike Northern Ireland, which is under the U.K.’s aegis), Quinn will have to wait about 12 years before the bankruptcy is cleared from his credit record. In the U.S. Chapter 7 bankruptcy remains on a person’s credit report for 10 years, but its impact diminishes with time.

“A Personal Vendetta”

In a move that does nothing to make him seem more sympathetic, Quinn has now reportedly accused Anglo-Irish Bank of holding a “personal vendetta” against him, and for that reason making his bankruptcy filing more troublesome.

Briefly, Quinn’s history with Anglo-Irish Bank (AIB) is this:

  • During the housing bubble, AIB extended itself beyond its means with ill-advised real estate loans.
  • Convinced the bank would rebound from its troubles, Quinn invested in its stock, gaining as much as a 28 percent stake in the company.
  • In addition to investing in the bank, Quinn also borrowed money to reinvest, putting himself largely at the bank’s mercy, should it collapse.
  • In 2008, AIB was forced to nationalize to avoid complete collapse. The process resulted in eliminating investments Quinn had with the bank worth about €2.8 billion.

Now Quinn owes AIB more than €2 billion. The now-nationalized bank has since received an order from a Dublin bankruptcy court to collect that money from Quinn. During the course of his bankruptcy, he will likely have to pay most or all of what he owes, or surrender assets to compensate the bank.

At present, it seems the bank is legally pursuing collection of the loan, though Quinn maintains that its officers pushed him into making unwise investments that led to the debt in the first place.

If there’s any kind of “lesson” we can take away from this tale of wealth and woe, it’s one of relief: it’s always refreshing to realize that our debts are not quite as overwhelming as they might be.

A joint statement from the Federal Trade Commission and the Federal Reserve Board released in late December announced new rules for lenders who offer some borrowers less favorable loan terms than others.

With active participation from the borrowers in question, this measure could provide an important safeguard against certain predatory lending practices.

Current Mortgage and Home Loan Requirements

As things now stand, lenders are not required to inform individual borrowers whether their loan terms are better or worse than those offered to others.

When the new rules take effect, though, borrowers will receive a notice if they are offered loans that are “materially less favorable” than a significant amount of loans offered to other customers.

Ideally, the new requirement will help people make better choices about their loans. Many people who originally got into subprime loans weren't fully aware how the loans worked or what their other options might be. What many thought were "regular deals" turned out to be trouble.

Facing foreclosure? Learn about your options with a bankruptcy attorney in your area.

Partly because of this current gap in rules - that is, because of the system that leaves borrowers in the dark about where they stand in relation to others - lenders were able to develop the lending “innovations” that led to the subprime lending boom - and eventual bust.

New Rules to Help Home Mortgages

Set to take effect in one year (January 1, 2011), the new rules require the following:

  • Compliance from mortgage lenders: All forms of consumer credit are included in the new regulations, which means that mortgage lenders, auto lenders, student loan issuers, credit card issuers, banks and financing firms will have to comply by notifying consumers when they’re offered unfavorable loan terms.
  • Action from borrowers: The new rules require lenders who offer borrowers less-than-stellar terms on a loan to provide a free copy of a credit report or credit score. Once you get the report, it’s up to you to check that the negative action that the lender claims appears there is, in fact, there. And, if it does appear on your report, you must determine whether it’s correct.

In other words, these rules are good news, but they’re not a cure-all: you must still take the initiative to monitor and correct (if necessary) your credit report.

The new rules are apparently designed to ensure compliance with the Fair and Accurate Credit Transactions Act of 2003, an amendment to the Fair Credit Reporting Act.

Saturday, September 19th, 2009

Senate Votes to Withhold Funding for ACORN

ACORN, the Association of Community Organizers for Reform Now, has gotten a significant amount of negative publicity in the last week. Here’s a summary of what’s happening with the group, which describes itself as a group that helps those who have historically been locked out become powerful players in our democratic system.

Background: ACORN & the Federal Government

According to The New York Times, the federal government has provided ACORN with $53 million dollars since 1994. On September 14th, the Senate voted 83–7 to withhold further funds.

Further, the Census Bureau has reportedly informed ACORN that its help will not be needed with the 2010 census—a change from earlier plans.

Voter Registration in 2008

According to sources, ACORN came under fire from some conservatives during the election season last year, when as many as 30% of new voter registrations the group gathered were shown to be fraudulent.

The Latest: Undercover Videos

This week, James O’Keefe, a self-named activist filmmaker released undercover films he made of certain facilities. In the films:

  • O’Keefe poses as a pimp with a woman posing as a prostitute.
  • They visit ACORN offices for advice on getting a loan to open a brothel.
  • The ACORN workers apparently offer advice for how the pair can get around certain laws to get loans.

Though conservative infotainment network Fox News has treated the videos as a scandal, most mainstream networks have taken a less aggressive stance. In a statement, ACORN’s chief organizer, Bertha Lewis, asserts that the video-taping was attempted in various cities and failed for months before the results we’ve all recently seen were achieved.

Lewis also insists that the videos were doctored or edited to make their content seem more objectionable than it actually was. She notes, too, that the workers shown in the video have since been let go.

ACORN has a decades-long history of helping underprivileged groups achieve equality, including helping people get fair credit after filing bankruptcy and advocating changes to the bankruptcy law to help homeowners.