Health care costs and filing bankruptcy rates are more closely related than you might think. Check out this chart that shows the skyrocketing costs of health. These costs could be driving many people to file bankruptcy.
Filing bankruptcy and the influence of medical care costs
Skyrocketing health care costs have many people considering filing bankruptcy.
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This guest blog entry was written by David Chang of Chang & Carlin, LLP. Chang & Carlin offer bankruptcy and real estate legal services for Chicago and its suburbs. Read David Chang's blog at http://changandcarlin.blogspot.com/
Many debtors view Chapter 7 bankruptcy as the "better" type of bankruptcy to file, and that Chapter 13 is forced upon them by the courts. However, filing bankruptcy under Chapter 13 has many benefits.
Here are 5 major reasons why people may choose file for Chapter 13 bankruptcy:
Months after winning $1 million on a game show, Georgia’s state superintendent of schools and her husband reportedly filed Chapter 7 bankruptcy.
However, this isn’t a story of why they filed; it's a story about what happened afterward.
In fact, according to the Atlanta Journal-Constitution, Superintendent Kathy Cox was selected to appear on Fox’s “Are You Smarter than a Fifth Grader?” partly because she wanted to play to win money for Georgia schools.
Unfortunately, getting her prize money to the children of Georgia hasn’t been as easy as she hoped.
Sources indicate that Cox planned to donate her TV winnings to three state-run schools for children with vision and hearing impairment.
And, as the first person ever to win the top prize of one million dollars on “Fifth Grader,” it looked like the schools would be receiving some cash.
But, three months after her winning, Cox’s husband filed for Chapter 7 bankruptcy protection, largely because of debt his construction company accrued.
In a Chapter 7 bankruptcy:
In the Coxes’ situation, their trustee has reportedly sued the Coxes and Fox Broadcasting Corporation in an attempt to get the prize money paid to the Coxes’ creditors rather than the schools.
Indeed, most state bankruptcy laws consider cash above a certain amount to be a non-exempt asset and therefore destined for the filer’s creditors.
Naturally, a protest has been scheduled and people on both sides of the debate are fervently determined to fight for their cause.
Part of the reason for the hullabaloo and confusion is that the various parties can’t agree about whether Cox participated in the game show as a representative of the state schools or as an individual.
The check she received from Fox was allegedly made out to her, which complicates matters.
Ultimately, the judge who presides over the court case between the two parties will have to decide whether the money Cox earned on the show is legally hers or the state’s.
Learn more about filing bankruptcy...
If you can, please set aside the dog fighting, the jail time and the infuriating bad-boy behavior synonymous with his name—because Michael Vick’s got a new set of problems.
This fall, as the NFL reinstates him following a high profile, two-year hiatus during which Vick served time in federal prison, the former Atlanta Falcons quarterback finds himself $20 million in the hole.
On August 27, 2009, U.S. Bankruptcy Judge Frank J. Santoro approved Vick’s creditor repayment plan under one condition: that he retain a financial planner to ensure that he successfully emerges from his July 2008 Chapter 11 bankruptcy filing.
Vick has an estimated 100 creditors trying to collect from his past-due bills.
After the ruling, an elated Vick commented to reporters outside the courthouse in his home state of Virginia:
“I'm happy it's over. I can move on with my life. I think my lawyers did a great job. I commend the judge. I commend the creditors' committee, everybody. We finally got it all together. I'm just happy we can move forward.”
Following the court appearance, Vick and his fiancé were whisked away on a plane to Philadelphia for his debut in an Eagles’ preseason game.
Once the highest-paid player in the NFL, Vick now receives a $1.625 million salary for the 2009 season.
This amount may not even cover his legal fees, much less a solid portion of what he owes to creditors.
The three-time Pro Bowl pick will be forced to liquidate around $9 million in assets, including houses, luxury SUVs, boats and future NFL earnings.
He is allowed to keep only one of several homes, a luxury SUV and other possessions of minimal worth.
NFL Commissioner Roger Goodell has permitted Vick to play in the final two preseason games of his new team, the Philadelphia Eagles, but not in the regular season.
In his announcement, much to the dismay of some, Goodell also contended that he would consider Vick for full reinstatement before Week 6 of the season.
Despite not having to pay creditors during his first year with the Eagles, Vick and his financial planner are hopeful that all of his debt will be paid off in six years.
The financial obligations of his Chapter 11 bankruptcy reorganization plan coupled with the 18 months he served in prison for operating a dog-fighting ring sustain Michael Vick’s reputation as an controversial figure in the sports world.
If nothing else, one thing in Michael Vick’s future is certain; for the undeniably talented athlete, winning games will not prove to be nearly as challenging as winning back an extremely contemptuous crowd.
Are you tired of debt and curious as to how Vick may be resolving his old bills? Learn more about how filing bankruptcy works.
Three men have been indicted for what seems to be the largest data breach and identity theft case ever prosecuted.
More than 130 million credit and debit card numbers were compromised by the hackers, according to Reuters.
It's probably a good idea to check your records to ensure you haven't been robbed of your hard-earned money.
Of the men indicted, one (Albert Gonzalez) was reportedly already in jail for prior hacking-related charges.
Sources indicate that the other two men who were indicted were also responsible for five serious data breaches from 2006 to 2008.
With this crime in the news, it's probably good to go over what identity theft is and how you can protect your assets.
Identity theft can be a devastating crime for its victims, leaving their credit ruined and causing them to lose serious amounts of money and, in some extreme cases, filing bankruptcy.
So how does this crime work?
This particular incident involved data breaches at the card processor Heartland Payment Systems and the retail chains 7-Eleven and Hannaford Brothers, Inc.
Information crimes have risen with the popularity of computers and the Internet – but so have protections against them.
For example, the security code on the back of your credit cards can prevent fraudsters from using your info by creating a clay imprint copy of your credit card number (at the checkout, say).
Here are some actions you can take to keep you and your personal information safe:
Ok, ok, maybe it's not that dramatic... but a new study shows that high testosterone may lead to reckless spending.
A recent study by researchers at the University of Chicago and Northwestern University has discovered that men and women may shop differently for biological reasons – and those reasons could also determine how you execute all major financial decisions.
Scientists have known for some time that testosterone, the male sex hormone, is linked to risky behavior.
And, when the economy collapsed after what can be considered very risky behavior in speculative financial markets, researchers began to wonder whether financial behavior had any specific link to testosterone levels.
The researchers noted that, while about 57% of male MBA students choose high-risk financial careers after graduation, only about 36% of female MBA students do.
Researchers chose about 500 male and female students pursuing their Masters in Business Administration (MBA) for their experiments.
After measuring testosterone levels in everyone, researchers found that about 90% of women and 31% of men had relatively low testosterone.
Researchers then offered participants a choice between a guaranteed monetary award and a high-risk lottery option with a potential for higher payoffs.
Perhaps unsurprisingly, the researchers found that those with higher levels of testosterone (10% of women and 69% of men) tended to choose the higher-risk financial options.
So what does all this teach you as a consumer? A few lessons.
... purchase the full study
Are you reading this and nodding your head?
If you've been overspending thanks to high testosterone, or if you've just fallen behind on the bills, it may be time to examine whether filing bankruptcy could help you.
The past seven days have been fairly significant for the United States, economy-wise.
Here’s a brief summary of three major stories you should know about.
President Obama took a break from his vacation on Tuesday to announce his re-nomination of Benjamin Bernanke as Federal Reserve Chairman.
If approved by the Senate, Bernanke will serve his second four-year term.
Since the economy hit the skids in 2007, Bernanke has:
Bernanke is a Republican. Read his statement of acceptance.
The Conference Board published numbers showing that consumer confidence in August is up substantially from July. Specifically:
Economists look to these numbers in part because the United States has a very consumer-driven economy, meaning that long-term recovery will depend largely on the behavior of the average shopper.
The latest report from the S&P/Case-Schiller Home Price Index shows a 2.9% increase of housing prices in the first three months of the year.
Though a small gain, the move is an important landmark: the first increase in home prices in three years.
This is good news, but not great: home prices are still down 14.9 percent from the second quarter of 2008, but that’s better than where they stood three months ago, at 19.1 percent below.
The rise could be a sign that bad times are over, but may just be a temporary upswing.
--Even though there's some good economic news to report, many Americans are still hurting. If you're having trouble making ends meet, it may be time to think about filing bankruptcy.
Bankruptcy in its simplest form is a recovery and relief task meant to heal and reprise a business or person back to a baseline stable for success.
The problem is it carries such an emblem of failure that the term is most often uttered with lowered eyes and sunken shoulders.
This is by no means is a final destination or label which should be branded on one’s forehead for life.
It is a sign for redirection, and a chance to start over- or move on.
Even those we idolize have filed bankruptcy.
In glancing at a recent article on Bloomberg.com, there in black-and-white is news that shows even the bright lights of Hollywood, the loud cheers of Shea Stadium or the brotherly love of Phillies fans can't save our stars from having to file for bankruptcy.
In the article, All-Star baseball great Lenny Dykstra is recorded to be filing bankruptcy under chapter 11 due to owing $10 to $50 million.
Then there is Stephen Baldwin, whose failed apprenticeship trials and inability to use his celebrity status to get him “out of here” has led him to filing bankruptcy.
Times are tough, even for our idols and it seems as though they will not be getting easier any time soon.
This economic blunder is even affecting such major banking institutions as JP Morgan Chase.
Bloomberg’s article mentions that “steeply rising filings by consumers are hurting commercial banks. JPMorgan Chase & Co., the second-largest U.S. bank, predicted more losses on consumer loans last month.”
In the same article JPMorgan’s CEO Jamie Dimon was resound in his thoughts of the current state of affairs.
Dimon doesn’t expect the credit card business to formulate a profit in 2009 or 2010.
In fact, the company augmented its loss projection for prime and subprime mortgages.
Not good news for those who lean on such institutions for stability in an otherwise unstable time.
Truthfully, examples of filings by celebrity figures, major business institutions and those who appear to have it all are interchangeable.
Just ask Donald Trump and M.C. Hammer.
The difference now is that more of the country is bound by these ties which otherwise were seen to connect only "the less" than rather than "the more of".
All those who think the economy is on the mend and those in jeopardy of bankruptcy can take a breath of relief, please raise your hands … no one?
Well, you would be correct.
Even though there are statements by our current administration that the economy is showing clear signs of recovery, there is still the malignant fact that both personal and business bankruptcy filings are on the rise.
In fact, in a recent article by USAToday and Bloomberg News there is a gargantuan estimation at just how large these figures will reach by the end of the year:
“Bankruptcy filings may hit 1.4 million” by the year’s end.
1.4 million, that’s more than the population of San Antonio, Texas and roughly the population of Philadelphia, PA - the city of brotherly love.
It seems there will be significant love lost as the toll of bankruptcies continues to rise.
As loans continue to remain hard to acquire, jobs continue to be lost and personal debt finds no relief, more folks will be filing bankruptcy.
To underscore this point, the ABI (American Bankruptcy Institute) released a statement which many news wires have used in their articles surrounding these facts:
“Personal bankruptcies show no sign of abating after rising more than a third this year and may hit 1.4 million by Dec. 31 as jobs are lost and loans are harder to get.”
When the facts are reviewed, there is a clear sign that relief is far from in sight.
Consider that during the first six months of 2009 the total number of U.S. bankruptcies filed increased 36% year over year.
That’s over 189,000 new personal bankruptcy cases filed in just six months from the previous year. Why is this?
According to ABI Executive Director Samuel Gerdano, it’s because of the increasing unemployment coupled with pre-existing debt.
“Rising unemployment on top of high pre-existing debt burdens is a formula for higher bankruptcies through the end of this year," Gerdano said in a statement.
Although these figures seemingly take the air out of our nation’s sails, the even more frightening thing is that they don’t even touch on our country’s business related bankruptcies.
For the same time period, business filings totaled 30,333. This represents a 64% increase over the first-half 2008 which totaled 18,456 cases.
Segmenting this figure, it was found that chapter 11 business reorganizations increased by 113% (7,396 compared to the 3,470 from 2008), and Chapter 7 bankruptcy business liquidations increased to 20,375 which was a 57% increase over the 13,002 filings from the same 2008 time period.
So it seems while certain figures can be released in an effort to cast a more favorable light on our current economic plight, possibly in an effort to prod consumers to spend more, maybe to encourage employers to get back on the hiring wagon or simply to offer a glimmer of hope for those close to the edge, it cannot hide the facts.
What is failed to be considered in these veiled attempts is that numbers don’t lie and we as a nation are far from separated from the disastrous financial uncertainty which will define this period in our nation’s history.
The United States Department of Labor recently released economic indicators for June, which show, among other things, a jump of about .7 percent in prices for consumer goods from May.
Here’s a boiled-down look at the latest figures:
Though economists predicted a slightly lower rise of .1 percent in core inflation (which does not take into account food or energy), the .2 percent rise is considered reasonable by most standards.
Since last year, inflation has risen 1.7 percent, a number that jibes with downward pressure on prices typical of a recession.
The Labor Department’s numbers for last month show a current unemployment rate of 9.5 percent, up only slightly from May (9.4 percent).
This number translates to about 14.7 million Americans currently out of work.
If you've suffered a job loss and are considering filing bankruptcy, check out www.TotalBankruptcy.com for bankruptcy information and lawyers.
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