The Federal Trade Commission’s annual National Consumer Protection Week is upon us (March 6 – 12, 2011) and that means it’s a great time to brush up on information about money, credit and the consumer protections available to you – just because you happen to live in the United States.
You can get handy tips for personal finance and money management at the NCPW blog, which is updated regularly with tips for topics including these (and more!):
Avoiding foreclosure rescue and other mortgage-related scams;
Knowing how to spot employment opportunity scams;
Making the most of your money in the early stages of your career;
Building and maintaining a budget to improve financial stability;
Avoiding time-share and credit-card scams offered via text messages; and
Learning what steps to take to save your home from foreclosure.
In short, whether you’re rebuilding from a bankruptcy filing or just starting to establish yourself in the world of credit and wealth, there are excellent, free resources available for your enjoyment and education.
FTC Targets Scammers Preying on the Cash-Strapped
In other FTC news, the commission announced this week new efforts to halt scams that target people in need of work – in other words, those who can least afford to lose money to dishonest schemes.
According to the FTC’s web site, Operation Empty Promises has taken legal action against the following scammers:
Ivy Capital Inc., a company that allegedly bilked consumers out of more than $40 million with promises of helping them to establish lucrative, Internet-based businesses from their homes. The scam reportedly worked by first asking victims about their available credit and then pushing them to use that credit to buy worthless products and services.
National Sales Group, Executive Sales Network and Certified Sales Jobs, three names of the same company that allegedly posted fake sales jobs on job-search web sties including CareerBuilder.com. The group, it seems, falsely promised sales positions with Fortune 1000 companies and charged victims money for what they claimed were costs related to background checks – often, this company reportedly overcharged and charged unapproved recurring fees to victims’ credit cards.
Business Recovery Services LLC, a company that the FTC claims misrepresented the potential effectiveness of its work-at-home wealth recovery “kits,” which sold for $499 each. All told, the FTC reports that this group managed to snag $1.5 million from victims.
Take Advantage of FTC Protections!
The FTC is constantly patrolling for scammers and those violating existing consumer protection rules. If you’ve caught wind of a scam or have been victimized by a scammer, you may want to file a complaint with the FTC as well as consult with an attorney to see whether you might be entitled to any compensation.
Anyone struggling with debt or trying to rebuild after a bankruptcy filing probably knows how challenging credit card bills can be: though the plastic rectangles themselves may be highly convenient, the monthly payments we make on them often are not.
And, with the economy tighter than the lid on a pickle jar, posts like this one are useful. It outlines some ways to minimize the amount you owe on your credit card without significantly altering your lifestyle (which, for many of us, may be impossible at this juncture).
Steps Toward Less Credit Card Debt
Pay earlier than you have to: If you have a revolving balance on your credit card (meaning that you don’t pay the full amount you owe each month), interest is charged to that amount every day, so that the longer you wait to pay your bill, the more interest accrues. If you can pay even a few days before the due date, you can save yourself a little bit each month. And, if you know you have a revolving balance and have online payments set up, you don’t have to wait until you receive a bill to make a payment—if you get unexpected cash in the middle of the month, you can funnel it toward your credit card debt before it disappears into groceries.
Pay more than you have to: The Credit CARD Act requires credit card bills to indicate how long it will take you to pay off your entire debt by making only minimum payments, which is a nice feature. It reminds us that the minimum payment is not designed to ease our monthly burdens—it’s designed to make money for the credit card companies and stretch our payments out over a long period, over which we’ll pay plenty of interest. Whenever possible, send more than the minimum payment. Ideally, aim for paying your card in full each month.
Double check your bill: Next time you receive a bill, review all your purchases, especially regular monthly subscriptions and memberships. If you could conceivably do without any of them, cancel and save some money each month. Remember that most libraries carry lots of magazines and a lot of content is available online. Plus, memberships are designed to make companies a profit—so if you aren’t absolutely dependent on yours, snip them out.
Leave home without it: While it’s easy to justify carrying a credit card in case an “emergency” happens, having the card with you at all times can be dangerous financially. Try keeping it at home for a week and noting how different your buying habits are. If nothing else, this exercise should open your eyes to when and how you tend to use your card—and how you could limit or eliminate unnecessary purchases.
Rethink outings with groups: Eating out can get expensive—especially if you frequently put the group’s meal on your card and everyone gives you cash. It’s far too easy to use that cash for something other than paying your credit card bill, and meanwhile you could be paying interest for everyone’s dinner. Suggest a night in every once in a while, or arm yourself with cash.
Have other tips for cutting down credit card debt? Leave them in the comments!
As a consumer bankruptcy attorney, I am often asked: Can I save any money during my bankruptcy? Well, if you filed a Chapter 7 case, this really isn't an issue. If you filed a Chapter 13 plan of reorganization, you will probably be in the bankruptcy for three to five years. The simple answer is: No, you aren’t supposed to save money; however, that is not realistic. In a chapter 13 bankruptcy, a debtor must pay to the bankruptcy trustee all of his disposable income for 3 to 5 years. Continued reasonable 401K contributions are considered an acceptable expense, but most other forms of saving money is prohibited.
Clients frequently ask, “How am I going to get a fresh start without saving?” True. It is difficult. At the same time, however, a debtor can wipe out $250,000 of debt by simply paying $400 a month for 60 months. The fresh start comes with the ability to force your creditors to accept pennies on the dollar for debts. The fresh start comes at the end of the bankruptcy when a debtor emerges free from the stranglehold of debt.
“What if my car needs or I have an unexpected expense? I need to save to pay for it.” This is another common concern. Bankruptcy law has a mechanism to deal with this common occurrence. In many cases, the bankruptcy payment can be forgiven for a period of time to let a debtor deal with unexpected expenses. The key is to let your attorney know about it as quickly as possible.
As a Consumer Bankruptcy Attorney, I hear and read about what is going on with consumers who are on the front lines of economic issues. The latest twist on the Foreclosure Crisis is that inventory is hurting the real estate market. I don't know about your neck of the woods, but right here in Southwest Florida our real estate market has taken a beating. As a homeowner, I'm not too happy with the drop in prices, but I am more concerned about others who are facing multiple issues. For example, it is estimated that over 7 million homes in the United States are in trouble.
Likewise, it is estimated that we will see another 3.5 to 5.5 million foreclosures. Florida is expected to be one of the hardest hit areas. Why? My answer is that Loan Modifications are not working. Even if a person is able to get a loan modification and stay in their home, it may not be enough to deal with all of their debt problems.
On a daily basis I see people who are maxed out with debt. A loan modification for them would be the equivalent of putting a band aid on a broken arm. These are good people who have lost their jobs or have had their hours cut back, etc, etc. They are good, honest and hardworking people were not able to foresee this economic nightmare. Now, they are having to make very hard choices.
If Congress changed the Bankruptcy Laws to allow people to modify their first mortgages in the Bankruptcy Court, people would have an opportunity to save their homes, cut down their debts, modify their payments schedules and pay their debts in a fair and equitable manner.
Bankruptcy is an option for many people, yet for some reason, the bankruptcy process is still shunned by the many people.
As a Consumer Bankruptcy Attorney, I hear and read about what is going on with consumers who are on the front lines of economic issues. The latest twist on the Foreclosure Crisis is that inventory is hurting the real estate market. I don't know about your neck of the woods, but right here in Southwest Florida our real estate market has taken a beating. As a homeowner, I'm not too happy with the drop in prices, but I am more concerned about others who are facing multiple issues. For example, it is estimated that over 7 million homes in the United States are in trouble.
Likewise, it is estimated that we will see another 3.5 to 5.5 million foreclosures. Florida is expected to be one of the hardest hit areas. Why? My answer is that Loan Modifications are not working. Even if a person is able to get a loan modification and stay in their home, it may not be enough to deal with all of their debt problems.
On a daily basis I see people who are maxed out with debt. A loan modification for them would be the equivalent of putting a band aid on a broken arm. These are good people who have lost their jobs or have had their hours cut back, etc, etc. They are good, honest and hardworking people were not able to foresee this economic nightmare. Now, they are having to make very hard choices.
If Congress changed the Bankruptcy Laws to allow people to modify their first mortgages in the Bankruptcy Court, people would have an opportunity to save their homes, cut down their debts, modify their payments schedules and pay their debts in a fair and equitable manner.
Bankruptcy is an option for many people, yet for some reason, the bankruptcy process is still shunned by the many people.
I was really bothered by something that I heard on the news last night, and this morning I couldn't help but voice my opinion on Bankruptcy Law Network. I know that I shouldn't listen to the news before bed, but I heard the talking head make a comment about why people file for bankruptcy and why businesses file. The joker said that when a business files for bankruptcy, it is done for one reason, and that is because it is in the best interests of the business. When an individual files for bankruptcy protection, it is because they have made bad decisions. Nothing could be further from the truth in my opinion.
In an age of disappearing pensions and rapidly shrinking Social Security funds, individual retirement accounts are more important than ever – but many Americans have no official retirement accounts, connected to their jobs or otherwise. The Associated Press reports that President Obama is launching a plan to change that.
The plan has at its center one serious statistic: almost half of American workers have no retirement savings option through their jobs. That’s frightening, considering that, as a nation, we don’t have a great track record of saving money.
Four Main Points for Retirement Savings
The retirement savings legislation, still in the drafting phase, at this point includes four main parts to improve Americans’ chances of living comfortably after they stop working. The four prongs are:
Automatic IRAs at work: Employers who do not already offer Individual Retirement Accounts (IRAs) to their workers would be required to do so. All employees would be automatically enrolled in such programs, with a chance to opt out. Studies have shown that participation in retirement savings plans is much higher when it’s automatic. To ease the administrative costs associated with the program, employers would reportedly be offered tax breaks for introducing the IRA plans.
“Saver’s credit” for contributions: Sources indicate that the Obama Administration wants to include a provision that would incentivize retirement savings for lower-wage workers by introducing tax breaks and potentially including government-sponsored matches for initial contributions. Some critics suggest that this measure will face too many obstacles because of the potentially high cost to the government.
Lifetime income: One aspect of the retirement measures that has been proposed would introduce investment products into retirement accounts that work on annuities and guarantee income for an investor’s lifetime. This measure would be intended to eliminate the possibility of a person’s money running out before their life, but could face challenges since accounts that offer such returns are often laden with fees. This might even include stronger retirement account protections in bankruptcy.
Heightened 401 (k) regulations: Lastly, the administration has mentioned introducing more transparency into the regulations governing 401(k) plans, so that investors would be better informed about the fees and costs of their accounts and avoid unnecessary expenses.
Remember: it’s never too early to start saving for your retirement, and with fewer guaranteed income sources for the elderly, it’s more important than ever to plan to support yourself financially after you stop working.
As a Board Certified Consumer Bankruptcy Attorney, I speak with many people about filing for bankruptcy and their debts. Medical Bill bankruptcies are a very real and growing problem. Don't get me wrong, this is not a new phenomena that suddenly came to rise like the epidemic or pandemic known as swine flu. People have always had to deal with medical bills when either they or a loved one became sick or were injured. However, it seems that over the last few years, medical bill bankruptcies have been on the rise.
I define a medical bill bankruptcy as a consumer bankruptcy where the medical bills incurred either directly or indirectly caused the individual to seek bankruptcy protection. Many people are forced to file for bankruptcy protection just for one illness or an injury that occurred after they lost their health insurance. Alternatively, other people file for bankruptcy after a long series of financial issues which started after a job related injury or medical problem and over time the financial hole became deeper and deeper.
Sometimes these medical bills are paid by health insurance or worker's compensation insurance, but, when a person is out of work because of a medical issue, how are they going to pay their other monthly obligations, like the mortgage, car payment, insurances, etc. What about the Dr. visits, co-pays, and prescriptions? What about the procedures that are not covered under the insurance policy? Can you imagine making a medical decision based upon whether your health insurer will cover the procedure because you cannot afford it? What if you cannot afford the procedure?
What about consumers who lose time from work because their spouse or child is sick? The stress of the illness alone will cause that person to become sick. Usually, that same individual may lose their job if they miss too much time from work. If you lose your job, you may also lose your health insurance. Even though health insurance isn't what it used to be, any health insurance is better than no health insurance. Still, many of our clients are incurring a significant amount of medical bills despite having private health insurance. They still face co-payments, sky high deductibles and non-covered procedures.
If we can learn one thing from medical bankruptcies, it should be that the health care system is broken, and it needs to be fixed. I don't know how to fix the problem, but I wish I could. I can only see how it changes people's lives forever.
Let's face it, bankruptcy is a very emotional issue. When you tack on medical bills, debt collectors hired by the medical providers, and the stress of knowing you cannot pay your doctor, it gets a bit overwhelming. Families on the brink of destruction often come into my office to discuss their horrifying experiences. No one wants to file for bankruptcy protection; however, bankruptcy provides the only glimmer of hope for many families. Bankruptcy can provide that fresh start that people need . I believe people are resilient and can bounce back from unbelievable circumstances.
