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The Most Important Plan You Can Make To Protect Your Loved Ones Today

Protect your loved ones and ensure that your wishes are followed. Make sure that your estate plan contains your current will, establishes your Power of Attorney, and contains your current Health Care Directive today.

Why is this so important? An estate plan? A will? The recession was painful for many people. The recovery is still lukewarm. Millions filed bankruptcy or at least thought about it. I understand the situation all too well. While eking out a living, hoping to achieve financial recovery, who has time to worry about a will?

Aren’t Wills Just For Wealthy People?

Modern wills are important for people in all walks of life, especially with advances in modern medicine. Without proper estate planning, you could be kept alive in a state you don’t want to endure; kept in that state because you are unable to speak up and say, “I’ve had enough! Let me go!” Your assets could be distributed according to the decisions of total strangers, or be subject to taxation that leaves less than you hoped for your loved ones. Your burial wishes might not be known. The list of unintended consequences goes on.

While these issues are not the most pleasant to consider, they are very important, especially as we get older, if we have complicated estates to distribute, or if we have explicit wishes for property distribution to family members, charities, and other recipients. You can address these concerns with my expert help by either updating or creating your will. The average tax refund is more than enough to settle these questions and gain peace of mind.
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Is now the time to challenge defaulted Federal student loan debt?

Educational Credit Management Corporation, the main private entity hired by the U.S. Department of Education to pursue and collect defaulted student loans, is under fire for overly aggressive litigation tactics against debtors who seek to discharge student loans through bankruptcy proceedings, reported Natalie Kitroeff of the New York Times on Thursday, January 2, 2013.

The United States First Circuit Court of Appeals, The Honorable Norman H. Stahl presiding, sanctioned ECMC for abusive and aggressive collection tactics in 2012, stemming from a bankruptcy case filed in 2004 and completed in 2010.

Ms. Kitroeff also referenced the 2012 case of Karen Lynn Schaffer, age 54, who could no longer continue paying on student loans taken out to help her son through school when her Hepatitis C flared up and disabled her from working. ECMC claimed in court filings opposing her request to discharge the student loan obligation that she had overspent dining at restaurants. She had spent $12 at McDonalds to purchase a meal for both she and her husband.

ECMC came into being in 1994 after the main collector and backer of student loans at the time collapsed from too many defaulted student loans. ECMC was armed with new and powerful collection tools including the ability to easily garnish wages, social security income and intercept Federal tax refunds.

Default rates dropped from some 22% in 1990 to just 10% in 2011. However, bulldog tactics and endless litigation are part of the game.

Emory University’s Professor Rafael Pardo called the agency’s tactics a “war of attrition, death by a thousand cuts.”

ECMC has worked to try to “change the rules” on bankruptcy discharge of student loans. ECMC has pushed courts to adopt a standard that is stricter than the normal “undue hardship” test which utilized by many courts.

ECMC has adopted even new tactics to make it tough on borrowers. ECMC claims that if defaulted borrowers can qualify for an “income contingent repayment plan” acceptable to the standards of ECMC, then any bankruptcy student loan discharge requests should be denied. The problem is that such repayment plans stretch on forever with no light at the end of the tunnel and little hope of credit score recovery. The company goes to great lengths to ensure that almost everyone “qualifies” for so-called “income contingent repayment plans”. The result is almost life-time indebtedness for the borrower.

There’s another aspect to any student loan debt that might be forgiven. An “income contingent repayment plan” that forgives part of the debt may create taxable income for the debtor who receives the benefit. The larger the forgiven amount, the larger the problem for the debtor. While arguments supporting a request that the IRS not view the forgiven portion of the debt as taxable income could be made in some cases, even making these arguments through a costly professional could be expensive, difficult and have no guarantee of success. Points like these were raised by Ms. Schaeffer’s lawyer, according to the New York Times story.

While the Federal Court of Appeals for the 8th Circuit has signed off on the approach argued by ECMC, other circuit courts have not. The State of Washington is located in the 9th Circuit.

Want to get rid of some student loans? Having significant health and family problems? The spotlight on the ECMC could be the signal that today is your day to file a Chapter 7, and to seek a discharge of your student loans.

If you have any questions about student loans and how you might go about discharging them through bankruptcy, please contact me at your earliest convenience.

Four Ways Scammers Will Try To Ruin Your Holidays This Year

Obamacare Navigators, SIRF fraud, cyber squatters, and gift-card-gotchas head up this year’s list of holiday scams.

So why discuss scammers at Christmas time? Two good reasons:

Reason #1: The swindlers don’t take time off. They work overtime during the holiday Season in search of big payola at your expense. You must be wary. Keeping Seasonal scammers out of your billfold, and off of your permanent credit report, requires an extra level of caution during the holidays.

Woman Scammed

Don’t fall prey to holiday thieves!

Reason #2: Take it from me. Financial scams ruin way more New Years than you might think. As one of the area’s busiest bankruptcy attorneys, people share with me intimate histories of personal financial loss, and destructive scams. I see firsthand the catastrophic damage, and I don’t want it to happen to you.

If you would like my best advice in a nutshell? Be very cautious with your personal financial information this holiday season to avoid the pain and embarrassment of getting burned.

Obamacare Phishers

The looming sign-up deadlines for President Obama’s Affordable Care Act (ACA) have been a boon for identity thieves taking advantage of this historical turn of events. While identity theft phishing for private financial information is nothing new, the ACA offers scammers a chance to add a fresh twist to an old game.

Q: How does the scam work?

A: By offering assistance. Helpful fraudulent phishers now contact you as “ACA navigators”, offering to “help” you understand how the ACA might benefit you, your family, or loved ones.

The illicit phisher offers to educate, and prepare you for the “coming change in your health insurance”. Eventually the phisher will ask for personal information such as social security numbers, employer information, address, income figures, and occupation to conduct a (phony) comparison of your current health insurance to the ACA option.

Q: How does the scam spread to harm my loved ones?

A: Once you are “sold” on the change to the false ACA insurance option, the phisher collects even more personal financial data about you, your spouse, and children to “sign up your entire family for the better ACA health insurance option”. The real objective is not to help you at all – but rather to steal the identity of every household member. The bogus phisher then uses this accurate financial information to open up bogus lines of credit, falsely claim welfare benefits, or perhaps to steal Federal, or state income tax refunds through a practice called SIRF fraud.

Stolen Identity Refund Fraud, or SIRF fraud

The practice of SIRF fraud is now rampant at both the state and federal income tax levels. You should use your spare time during the holidays to prepare your 2013 tax return for quick filing in 2014.

Q: What is SIRF fraud?

A: Using stolen personal details, and made-up withholding forms, a SIRF fraudster applies online for dozens of tax refunds per day under your identity, and the identities of others, to be sent to addresses of his choosing. When the real taxpayer later tries to file a return, the IRS, or state income tax authority rejects the true taxpayer’s later honest tax return refund request, and the mess can take months to sort out.

Q: How big is SIRF fraud?

A: SIRF fraud is big criminal business. Georgia found that 160,000 out of 4 million state income tax returns were suspicious, and may have been prepared by SIRF fraudsters. This is 4%, or almost 1 in 20 of Georgia state income tax returns filed. Foreign and domestic criminal gangs are adding SIRF fraud to their agenda. One Armenian (former Soviet bloc area) gang filed 2,000 false returns claiming $7 million in false returns.

The “poster girl” of SIRF fraud is Tampa, Florida’s 27 year old Rashia Wilson, who suggestively (and unwisely) posed with fistfuls of cash on her personal Facebook page. The bundles of cash she clutched in her “selfie” Facebook photo represented only a small fraction of the estimated $11 – $20 million she and her gang netted in bogus refunds.

Ms. Wilson used some of her illicit millions to purchase a $90,000 Audi, and a custom gemstone encrusted necklace spelling out her name in diamonds. She also spent $30,000 on a birthday party.

The IRS has nearly 3,000 employees devoted to identity fraud issues like SIRF fraud, but the IRS admits it can’t keep up with this explosive new scam.

Q: How was Ms. Wilson caught?

A: The IRS did not catch Ms. Wilson, and her gang. She was caught by local police. Tampa police Major Ken Morman told ABC News last year that a decline in local drug dealing suggested that criminals had found a more lucrative business. Neighborhood Tampa detectives started to ask around. They eventually discovered Ms. Wilson and her gang of 13 co-conspirators, who at the time were also expanding their enterprise into stolen identity credit card fraud. The unrepentant Ms. Wilson received a 21 year prison sentence.

Q: How easy is SIRF fraud?

A: The SIRF fraud craze has spread like wildfire because it is so easy. For example, some 170,000 completely bogus Federal tax refund requests were filed by prison inmates alone between January and September 2012.

Q: How do I best defend against SIRF fraud?

A: There are two easy ways to beat SIRF fraud:

  • First, file your 2013 tax return(s) ASAP after January 1, 2014 so a SIRF fraudster doesn’t have time to beat you to the punch. The IRS will always accept, and recognize the first-to-arrive tax return.
  • Second, do not give out personal information to phishers like the phony “Affordable Care Act navigators” discussed above.

Cybersquatting

Crooks steal, or slightly alter the website address of a well-known company, and launch a bogus site that may be a nearly identical copy of the real thing. While these sites may have malware, they primarily function to collect your credit card information for the purchase of inferior counterfeit goods, assuming you actually receive them.

Q: How can I avoid the lure of cybersquatting copycat and counterfeit websites?

A: As the kids say, let’s “get real”. Do you really think a genuine $500 Louis Vuitton hand bag is on sale at a site with a bogus looking URL like “www.Lew.E.Viewton.net” for $75.00? Very unlikely. At best, you will get a phony bag. At worst, your credit card information will be circulated all over the Ukraine, and you may never even see even a phony bag.

Gift Card Scams

After taking gift cards from display racks, thieves peel and copy, or use a portable scanner, to get the code underneath the scratch-off strip. Then they put the cards back on the rack, and wait for the cards to be bought and activated. By dialing the card’s toll-free number, the thieves can find out exactly how much value is on the card. The way is clear now for them to make online purchases, or generate cloned copies for in-store use, leaving those who you intended to receive your gift cards with worthless cards.

Another angle on the gift card scam has an crooked store cashier pocketing the cash that you paid for the gift card without actually activating the card at the cashier’s check stand.

Q: How can I avoid the gift card scam?

A: Your best bet: Purchase gift cards from a store’s customer service counter, or website, rather than from untended display racks. If you do buy from a display rack, make sure the cashier scans and activates the card in your presence. You don’t want the cashier just pocketing the money, and make sure you get a receipt to give to the gift recipient in case there’s a problem.

Why discuss a gloomy topic like financial scammers during the holidays?

We care about you, that’s why. I sometimes see the effects of financial fraud that are so devastating that the scam was the “tipping point” of cascade of debt default. All too often, the fraud capped the person’s struggle to stay current on bills, and rent, mortgage, and car loan payments fell delinquent. Perhaps this event, through no fault of your own other than your innocent trust, may lead you to financial catastrophe.

These fraudsters look to financially victimize everyone they can, resulting in a disproportionate impact on elderly people and struggling households. If anything, the scammers find even bigger opportunities for fraud every holiday season.

Join us in fighting back. Keep the holiday scammers at bay, and enjoy the holidays with your loved ones by passing on this newsletter to those you know. If they like this type of info, they can subscribe to the newsletter by entering their email address in the subscription form on any interior page on this web site like this one.

Think Of Us, and Get a Jump On 2014

If a friend or relative confides in you that he or she has been with their finances, we may be able to help. If your friend or relative calls us at 253-383-1001, we will treat them in the same courteous, calm, no blame/no shame fashion that we treat all of our clients, whether they decide to move forward with a bankruptcy filing or not. If your friend or relative feels more comfortable with you at their side during their free 30 minute consultation with me, you are most welcome to accompany them to their appointment.

Right now would be a great time to get the jump on a late 2013, or early 2014 bankruptcy filing. Delay does nothing except prolong the worry and stress of financial problems over the holidays. Don’t wait, contact us now for a free 30 minute consultation.

My Special Request To You On Behalf Of Those Less Fortunate

If you should find that you and your family have some spare resources as 2013 draws to a close, please consider sharing some of your blessings with others. A cash, or nonperishable food donation to your local food bank, will not only help someone in need, it will also start your 2014 with a warm feeling of what the holiday season means, and a great opportunity to teach those younger members of your family a valuable lesson about the gifts that givers receive by helping others in need.

We hope that the links that we’ve provided below will help you identify a community food bank that is near to you:

Looking for a wonderful feel-good charity that provides gifts and food to needy families with children? Please consider my personal favorite: www.forgottenchildrensfund.org.

Blessings to you, and all those close to you this holiday Season,

James, Ray, Lisa, Mary, and Tina
The Law Offices of James H. MaGee
Washington Bankruptcy Attorney

Can “Thinking Young” Help You Get Ahead Financially in 2014?

Stick with me here. I want to share some ideas and a great website with you. I am going to give you three great reasons why you should start “thinking young”—or better said, “think like you were young’, during the Holidays, even if you are not under 30.
Couple Working on Finances

Couple Working on Finances

Reason #1: Broke as a 20 year old? Then strategize like a 20 year old—think young.

Many of us were battered and bruised financially by the Great Recession of the past decade. Some of us went back to school with the assistance of student loans when employers cut back or vanished. Others drained 401ks and relied upon credit cards just to get by. Many homeowners became renters once again as they lost homes to foreclosure.

Now the Holiday season begins with messages across virtually all media encouraging conspicuous consumption while some of us try to cope with reduced hours at work, smaller or non-existent year-end bonuses, and 5-10 years of flat wages.

The Holidays might not offer much more than stress with everyone under so much pressure to spend, spend, spend and put on a brave face for family and friends. If you can’t keep up the “doing just fine” image, you might feel really alone and disconnected this Holiday season.

2004-2013 may have been a “lost decade” in financial terms for many of us. Really, are you much better off this Holiday season than in Christmas 2003? How much progress towards financial security have you made since January 1, 2004? Do you feel much better off than you did during Christmases past when you were 20? Or when you were 30?

The “lost decade” may have led to a bankruptcy filing. Sometimes the choice was bleak: (1) file bankruptcy or (2) lose your sanity and ruin your health over financial stress.

So as the financial “lost decade” draws to a close, what to do?

There’s an alternative to the financial rat race. If you are 40 or 50 years old but not much financially better off than when age 29, doesn’t it make simple good sense to visit the financial advice columns and blogs read by financially savvy and well-informed 29 year olds?

I suggest survive the the Holiday season with a goal and a purpose to begin the new year with a new point of view, and with the support and shared wisdom of a group of forward thinking individuals just like you. How? Where? Read on.

Reason #2: Pass on the wisdom

If you are in your 30s, 40s or whatever, some younger person is going to look up to you for direction and help. Over the spiked punch bowl this Holiday season, your nephew may just spill the beans that he is struggling financially and is very unhappy. What better way to help lead someone else to greater financial literacy and better decisions than to introduce your nephew to the supportive and interesting on-line community found at moneyunder30.com.

David Weliver started moneyunder30.com  after he found himself $80,000 in debt at age 25 with nothing much to show for it. David writes, “I started moneyunder30.com in 2006 for [a] singular reason: to provide simple, honest and relatable financial advice for starting out. By the way, it is fine if you are over 30, too. It is never too late to get right with your money! Whatever your goal, I want to help you get there.”

The articles on the site are great. Staying informed is easy. You can either sign up to receive a free email newsletter on the site, or can follow David’s Twitter account there so that you’ll automatically be notified of new posts and comments on the site.

What sets this site apart from the rest is that by participating, you’ll join an active community of likeminded people. You can leave comments on articles to share your experiences or expand on the content, too. The article comments are surprisingly numerous. By participating on topics on the site relevant to your situation, you may soon learn that you are not alone in your stress over finances. But this is not just a community of complainers. It is a group working to proactively change their current financial status and share ideas and comments to that end.

The site does look at bankruptcy as an option, but not as a panacea or an end without epilogue. I think that participation in the moneyunder30.com community will help you to realize when it is too late for anything but bankruptcy, it makes perfect sense as a positive alternative to years unnecessarily and hopelessly wasted, toiling with debt to no avail. The site is balanced and mature in that sense. Sometimes no amount of smart shopping or expenditure trimming can avert the need to consider bankruptcy.

There are millions of people just starting out or just starting over at the end of this ”lost decade”, or perhaps recovering after a bankruptcy or other financial shock. Stress over finances can feel isolating and embarrassing, but as a countermeasure, moneyunder30.com offers a welcoming online community you can join to fight back. This community welcomes you to make contributions by commenting on nearly every article.

David’s website features the contributions of a number of knowledgeable guest posts about consumer, home, auto, educational, and investment finance as well as timely and entertaining feature articles on topics like saving during the Holiday season.

Many of the moneyunder30.com articles seemed to echo what clients ask me every day, such as: “How to build credit (for the first time)”, “Should you save or pay off your student loans”, “Top Financial iPhone Apps” and ”Why it is ok to rent”.

The deeper financial advice articles are balanced with shorter, action oriented one, including: ”Cut back on spending: 10 painless money-saving tips for the upcoming holidays”, ”Free budget spreadsheet”, and “10 best cities for the young, broke and single—where to live if you are 18-44 years of age”.

I also note that the moneyunder30.com site appears to vet some credit offers, saying in effect that “if you need credit, we took a look at this credit product/offering and as far as we can till, it seems to be the least of all possible evils”.

Reason #3: Excellent Holiday savings!

The moneyunder30.com website has some great gift ideas that are economical. Speaking of which: want to save a truckload on last minute Christmas shopping? Who doesn’t! In next week’s post, we will review some low-cost gift ideas suggested by a recent moneyunder30.com article.

What Can Eike Batista’s Story Teach Everyday Washingtonians About Financial Planning?

Brazil is a really big country generally recognized for its spectacular economic growth over the past 10 years.

In this steamy and exotic country, things happen in a big way. It is now the home of Latin America’s largest ever bankruptcy—the consequences of a huge gamble that didn’t quite pay off. The man at the center of this whirlwind is the flashy and self-assured promoter, Eike Batista.

What is interesting is that nearly everyone—even the Brazilian government—had astounding confidence in the charismatic and handsome Brazilian. There is no doubt that Mr. Batista also believed in himself and his plan. Not long ago, Forbes magazine ranked him as one of the world’s wealthiest people with an estimated $30 billion net worth.

The Choices Get Tough Once the Frying Pan Gets Hot

The Choices Get Tough Once the Frying Pan Gets Hot

 

Brazil is known as one of the BRICs, the term that economists use for Brazil, Russia, India, and China. For much of the past 5 years or so, Brazil has been a darling of global investors. Investment flowed into Brazil at a floodwater’s pace, and Mr. Batista had little trouble finding investors to provide credit, which he used abundantly to help build his empire.

Much of Brazil’s economy is based upon its natural resources such as timber, foodstuffs, oil, and gas. As demand and prices for these commodities increased around the world, Brazil’s abundance in most of those categories attracted large amounts of new investment. Consequently, as prices and demand for these commodities increased around the world, Brazil prospered even further as money from the sale of Brazilian commodities fueled a domestic consumption boom for consumer goods as more of Brazil’s once poorer citizens were able to afford cars, televisions, appliances, better housing, and nicer furniture.

Many global investors wanted a piece of the Brazilian investment action, and Mr. Batista’s companies provided ready opportunities for them. Mr. Batista started an oil company, OGX, followed by OSX1, a ship building company, followed by LLX, a logistics/shipping company, and by MMX, a mining company.

The idea was that LLX would buy oil transport ships and offshore oil drilling platforms from OSX1. OGX would then pay LLX to transport the oil in the ships that OSX1 built and sold to LLX. LLX would in turn lease offshore oil drilling platforms to OGX. LLX would also operate the ports where OGX oil and ore mined by MMX would be transported and exported.

But there was one problem, and it turned out to be a big one.

There wasn’t much extractable oil in the oilfields controlled by OGX. OGX had raised $4.1 billion in a 2008 public offering to acquire money to tap offshore oil field reserves then estimated at 10.8 billion barrels. In the ensuing years, OSX burned through much of its cash in a failed effort to develop those fields. In July 2013, OSX finally disclosed that it was incapable of extracting oil from most of the oil fields, triggering a fire sale on its shares.

The Brazilian government loaned Mr. Batista’s companies about $4.5 billion, making the Brazilian people likely losers to some extent in this disaster.

Things can happen explosively in Brazil, and Mr. Big can suddenly find himself as Mr. Nobody. While Eike Batista is a long way from a nobody, he could be on his way if his fortunes don’t improve.

Is Mr. Batista gone and forgotten? Not quite yet. Under Brazilian bankruptcy law, the debtor is granted quite a bit of leeway to propose and attempt to complete a reorganization plan. So Mr. Batista may have quite a long leash, but with new oil discoveries elsewhere, including in the U.S.A. thanks to new technologies like hydraulic fracking and applying data mining techniques to locating promising drilling sites, and with other Brazil’s other commodity prices stagnating, it may be very difficult for Mr. Batista to assemble a feasible reorganization plan.

Had the oil fields turned out better, perhaps Mr. Batista’s story would have turned out differently.

What Can We Learn From The Eike Batista Story About Financial Planning?

At first glance, the story reminds us to not borrow and spend future revenues that are not assured, particularly if the business venture involves high risk and is subject to intense competition like drilling for oil in unproven fields offshore.

Playwright William Shakespeare reminded us of irrational exuberance when he wrote of the unfortunate farmer in Macbeth, Act 2, Scene 3, “Here’s a farmer that hanged himself on the expectation of plenty.”

Another lesson is that just because we can borrow more money to get more stuff, it doesn’t always mean that we should. Mr. Batista borrowed from everyone to buy more stuff, including borrowing from his own country, the government of Brazil.

If you or someone you know bought too much stuff and now confronts a struggle with excessive debt due to poor financial planning, give us a call. A bankruptcy filing may help you out, as it may Mr. Batista. If you bought a reasonable amount of stuff, but an illness, or job loss, or some other life event has left you struggling with debt, please give us a call for a compassionate, non-judgmental and understanding consultation about your bankruptcy options.

Serve Others While Bettering Yourself and Your Family: A Thought During The Thanksgiving Holiday Week

During Thanksgiving, we think about how we have been blessed, and perhaps also how we could provide a blessing and serve others who are more in need than ourselves.

We all may remember the telephone pole placards “Work from home and make $5,000 a month: call 555-1212”. Most were frauds or multi-level marketing come-ons designed to feed on our innate nature and lower instinct to get something for not much of nothing.

But can you really make a living—and maybe even a fortune—helping the poor? There are 3 billion desperately poor people in the world. Is it really possible to bless the desperately poor while still providing for yourself? Can you help the billions of poor while still working from home?

Paul Polak and Mal Warwick say “yes” in their new book entitled, “The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers.” Berrett-Koehler, publisher; 264 pages; $27.95. The book is available in various formats on Amazon.com.

Thanksgiving Blessing

Can Your Idea Bring Thanksgiving Blessings To The World?



In the early 1980s, Paul Polak invented a donkey cart for Somalian refugees and started a project jokingly called “Ass Haul International”. But it ended up being no joke. Aid agencies bought the carts for about $450 each and provided them to refugees. The refugees turned the carts into small businesses, and some earned up to $200 monthly—a tidy sum in areas like Somalia. The carts were unique. They could be flexibly configured, and were much more comfortable for the donkeys that pulled them.

In the 1980s, Mr. Polak’s “new” idea was nearly heretical to the charitable aid community. His idea that business could play a role in undeveloped/developing nations to help lift people out of poverty met with plenty of cold shoulders. The view in the 1980s was that people needed charity in the form of food, sanitation, electricity, and medicine rather than simpler innovations that might lead to skills, jobs, and work. The old idea was that once the desperately poor of the world were provided adequate nutrition, health, and safety that the poor would eventually figure out how to support themselves and lift themselves out of poverty. The old view: it would be unseemly for anyone to make a profit while helping the world’s poorest citizens.

The new view is that so-called charitable food and medicine hand-out schemes are subject to criticism because the organizers of the charities see the needy as victims who are unable to ever support themselves, and who need perpetual care. Critics say that the emphasis on free aid in the developing world results in victims who are “made”, and the self-images that the free aid recipients develop breeds feelings of dependency and inability to help themselves. In contrast, the newer view is that business will treat poor people as workers and customers, empowering them to stand on their own two feet and provide for themselves.

Mr. Polak and Mr. Warwick’s book focuses on the particular challenge of trying to reduce poverty by building businesses that have products or innovations that might serve the 3 billion poorest people in the world—products and services which those people might buy with their own incomes. Polak and Warwick join other thinkers in this idea including a well-known work entitled “The Fortune at the Bottom of the Pyramid” by C.K. Prahalad. Mr. Prahalad’s book also examined the idea of larger businesses making money while helping the poorest people of the world.

Mr. Polak’s innovations include concepts he calls “zero-based design” and “radical affordability” to appeal to people earning only a couple of dollars a day. The product or service sold need to be deliverable locally, as potential purchasers are unlikely to be on a postal route, let alone in an area with FedEx service. Polak also emphasizes that not only multinational corporations can play a role, but even individual entrepreneurs may have a place in helping the neediest people in the world.

Are You Called To Serve? Will You Act On Your Calling?

So what have you dreamed up that might be useful for the third world? An innovative and portable water filtration/purification method? A “super shoe” that is durable, comfortable, and long lasting? A smartphone application that teaches English? A solar food dehydrator? An affordable drip irrigation system for the small home-garden plot? An efficient, affordable, and durable light fencing material to keep marauding animals out of the subsistence farmer’s family food growing plot upon which the farmer’s family depends upon for much needed income?

If you believe that your idea is more than just an idle thought, and you want to try realize your dream as a real product or service, then one approach that you could take is to present your idea on “kickstarter.com“ in hopes of attracting sufficient “crowdfunding” from people interested in helping bring innovations to aid the world’s poor. I wrote a blog post about kickstarter.com not long ago that may interest you. Simply type “kickstarter” into this website’s search box to find it.

I remember from childhood Sunday School that in Mark 14:7 Jesus said “For ye have the poor with you always, and whensoever ye will ye may do them good: but me ye have not always.”

There are 3 billion really poor people on the planet. Do you have an idea or innovation that might improve their lives? Today might be your day to “do good” for some of the world’s poorest citizens.

The Thanksgiving Holiday week is a special week to remember how we have been blessed. And also to think about how we might share our blessings with others.

Is It Too Late To Invest In Pierce County Real Estate?

Blackstone Homes’ subsidiary Invitation Homes, American Homes for Rent, and FREO Washington are three large institutional investors scooping up a significant share of the vacant foreclosed homes in Pierce County, Washington. The purchases that these companies are making might artificially inflate local home prices, say some. Others believe that the area is poised for a housing price comeback.

Blackstone Homes and the other corporate investors that are purchasing large numbers of homes claim that they are in the business to serve as a long-term landlords, but local experts are skeptical. They think that the institutional investors are really planning to wait for prices to rise a bit before dumping the houses for a tidy net profit, according to Kathleen Cooper’s article in the real estate section of the Tacoma News Tribune on October 27, 2013 “This is no different from institutional investors being bullish in other commodities,” says Jody McNamer, a Gig Harbor-based real estate investor who has focused on the South Puget Sound region for 20 years. “They run those commodities up and dump their holdings after they make their profits. And little guys are all, um, what happened?”

Business Meeting depicted by The Law Offices of James H. MaGee, Washington Bankruptcy Attorney

Are big investors bidding Pierce County real estate prices up?



 

What does this mean for the rest of us?

It could signal that these well-informed corporate investors are confident that the Pierce County housing market is likely at its price low point now, and that they expect prices and rents to rise soon. If the big corporate investors are correct, then it means that those pondering whether to buy a home can trust that some well-informed corporate investors also believe that now is a good time to buy.

How many houses are these big investment companies purchasing? Between September 2012 and October 2013, almost 1,000 homes were purchased by Invitation Homes, American Homes for Rent, and FREO Washington. There are also additional regional and local companies making investment purchases, so at least 1 in 12 homes purchased in Pierce County over the past year was purchased by a big investor.

Some people think that these institutional big investors have miscalculated and are skewing the market upwards, and that the temporary upswing in housing prices will decline again once the big investors quit pumping money into local purchases. The skeptics could point out that the median home price in Pierce County peaked at $285,000 in August 2007, then plummeted to about $160,000 in February 2012. Since big firms moved into the area as early as October 2012 to buy homes, the median price has risen to $220,000 as of September 2013. These naysayers could claim that housing prices are moving up too fast, given the otherwise generally flat or low-growth local and national economies.

Substantial numbers of purchases by large real estate investment firms are being made all over the country. In Washington, investors are concentrating on properties in Snohomish, King and Pierce counties, according to the Tacoma News Tribune. Is the present house price increase another housing price “mini-bubble”, or are these price increases here to stay? Only time will tell.

So, What Can I Do To Prepare To Invest In Pierce County Real Estate?

If you want to buy a home, but you either have rocky credit or perhaps you had a your home foreclosed upon in the recent Great Recession, then preparing to buy another home soon to avoid potential steep increases in housing prices could be timely. In some cases, filing bankruptcy is a prudent step towards eventual home ownership. Bankruptcy can eradicate debt and improve your debt to income ratio, making it clear to home mortgage lenders that you do not owe any further debts and you are a safe bet for a new home loan.

You or someone you know may want to turn over a new leaf, and get started towards a brighter financial future now. Call us at (253) 383-1001, or contact us through the form on our web site, in order to schedule a free, no obligation, personal consultation with me. During our meeting, I will listen to your situation, examine your options with you, and explain how and why bankruptcy may be the right choice for you. Don’t wait; stop procrastinating! Act now to regain your peace of mind right away.

What Insurance Companies Don’t Want You To Know

Receiving proper compensation from an insurance company due to injuries to you or a loved one is important for your family’s ongoing financial security.

You can recover lost wages, medical bills,  future reduced income as well as both temporary and permanent physical limitations.

Selecting the right attorney is crucial when dealing with highly specialized fields like bankruptcy and personal injury. Mr. Matt Van Giesen is my injury attorney of choice, and he is the guest author of this post on our site.

Matt Van Gieson, Attorney

As we all know, insurance companies want to make billions and billions of dollars. I mean, who doesn’t? What we don’t know is just how they do it. Yes; charge more in premiums and pay less in claims is the trick. But just how do they do that?

Tactic #1: Settle Fast and Cheap.

They push hard and fast—go to your home, take you to lunch, offer you $500 bucks—whatever. Just get a signature and then sit back and enjoy that you just saved them thousands, if not tens of thousands of dollars.

But if that doesn’t work, well then, welcome to 3D land!

Now I wish I could tell you that this is some sort of fun attraction like an IMAX 3D movie, but no! It’s a notorious way insurance companies wear out injured people and get them to settle their claim for sometimes pennies on the dollar.

Tactic #2: The 3Ds: Delay, Deny, Defend.

You’ve successfully resisted the “shock and awe”, “sign your life away” blitz of the insurance company. You’re feeling pretty good, but now the more devious of practices awaits—delay, delay, delay.

Life happens and the more the insurance company can delay, the tougher it is for you, the injured person, to resist settling for whatever the insurance company will offer. Work is missed, medical bills pile up, and collection notices arrive—all giving the insurance companies leverage to get you to sign on the dotted line.

But you persist, and make it past the delay phase. You’ve been valiant so far—only to find out that the next turn brings you into denial. Yep, they won’t pay your claim! They make up some ridiculous excuse of how you are at fault or were not hurt in the collision and then politely—or not so politely—deny your claim.

They’ve got you where they want you. You’re hurting and your only options are take the insurance companies low ball offer or bring a lawsuit. Yep, the billion dollar insurance company with its legions of lawyers is inviting, tempting you into its playground—the courtroom. “Come fight me, but beware I fight here every day. I know how to defend and defeat you.” This is where many cave and sign on the dotted line.

But that doesn’t have to be you. You don’t have to add to the insurance companies bottom line. When tragedy strikes, seek out a well-qualified injury lawyer and let your attorney take the fight to insurance company and get you what you deserve.

A professional athlete doesn’t go to bat and personally negotiate his own contract. The serious athlete hires a professional, as do musicians and artists, because they know that having a professional fighter on their side against a billion dollar industry is essential.

At the Law Offices of Harold D. Carr, P.S., we have been fighting insurance companies for over 25 years, and have handled more than 10,000 claims. We hold insurance companies responsible, and get injured people what they deserve.

If you are involved in a collision, call us at 800-700-8082 and let us even the playing field for you.


You or someone you know may want to turn over a new leaf, and get started towards a brighter financial future now. Call us at (253) 383-1001, or contact us through our web site in order to schedule a free, no obligation, personal consultation with me. During our meeting, I will listen to your situation, examine your options with you, and explain how and why bankruptcy may be the right choice for you. Don’t wait; stop procrastinating! Act now to regain your peace of mind right away.

Will Obamacare Free You From Job Lock?

“Job lock” is a phenomenon wherein people remain in jobs or positions for which they are not suited because of the downsides of leaving. While the uncertainty of income contributes to “job lock”, the risk of losing access to affordable employer-provided healthcare insurance coverage may also contribute.

“With the new law, job lock goes away,” says John Arensmeyer, who heads the advocacy group Small Business Majority, “[With Obamacare] [a]nyone who wants to start a business can do so independent of the health-care costs.”

Mr. Arensmeyer claims studies show that people who are freed from job lock (for instance, when they are old enough to start qualifying for Medicare) are more likely to undertake something entrepreneurial, and he says that one recent study projects that Obamacare could enable 1.5 million people to become self-employed.

Obamacare makes employer-provided insurance coverage mandatory at the 50 employee level—employers smaller than that are exempt. Fewer than half the companies with under 50 employees insure their employees, and half of uninsured workers work for small businesses or are self-employed. In fact, a full quarter of small-business owners are uninsured, too, according to an article by James Surowiecki that appeared in the October 14, 2013 edition of The New Yorker magazine.

Mr. Surowiecki writes that the rise of employer-provided healthcare insurance coverage was somewhat of a historical accident stemming from the Second World War. During the war, wages were frozen so companies began offering healthcare coverage insurance instead. After the war, attempts to create universal health care were stymied by politicians and doctors, and Congress gave companies tax incentives to continue to provide healthcare coverage, according to Mr. Surowiecki.

The employer-provided healthcare coverage system has worked well enough for large employers who can pool the risks that any large healthcare insurance company might face, according to Mr. Surowiecki. However, small businesses trying to provide healthcare coverage insurance run into “experience factor” problems that on the average can cause small business healthcare insurance coverage to cost 18% more than it does for larger organizations. A business with a large percentage of women or older workers faces high premiums. Even a single employee who runs up high healthcare costs can spell disaster for future premiums which are tied to the “experience factor”.

Obamacare may assist many small business employees and employers. If a small business employer truly cannot afford to provide health insurance, at least there will be somewhere for the employee to secure insurance coverage on a health care insurance exchange. Next, for those small companies who wish to provide insurance coverage there will be some tax credits available to help offset costs. The legislation also proposes to require “community rating” for small businesses, just as it does for individuals, sharply restricting insurers’ ability to charge a company more because it has employees with higher health costs. One additional aspect is that small-business exchanges will in effect allow companies to pool their risks to get better rates, writes Mr. Surowiecki.

“You’re really taking the benefits that big companies enjoy, and letting small businesses tap into that,” says Arensmeyer. This may lower costs, and it will insure that small businesses can hire the best person for a job rather than worry about health issues, according to Mr. Surowiecki, who reports that a 2009 study by economists John Schmitt and Nathan Lane documented that the US small-business sector is among the smallest in the developed world, and has one of the lowest rates of self-employment. The absence of a national health insurance option contributes to this low rate of self-employment, according to Mr. Surowiecki.

Obamacare may also have some provisions that seek to protect employees in 50+ employee firms from suffering from onerous healthcare insurance premium paycheck deductions. Companies offering insurance has to cover at least sixty percent of costs and can’t cost more than 9.5% of employees’ income, according to Mr. Surowiecki.

The potential downside of Obamacare for employees is that companies below the 50 employee threshold may quit hiring and contract operations to avoid the healthcare mandate, and that employers having 50+ employees may cut jobs or employment hours to get below the 50 employee threshold.

How big might the Obamacare impact be on employers overall? For sure, some will be significantly impacted, but it might be a very small minority. Mr. Surowiecki writes that only 3 percent of companies are in the “zone” of potential Obamacare impact, having between 40 and 75 employees. Of companies with more than 50 employees, 90% of these companies already offer some form of employer-provided healthcare. Moreover, 96% of American businesses have fewer than 50 employees and these under-50 employee businesses would face no impacts at all.

My office has no political position on Obamacare. I avoid discussions of politics in my professional blog. Frankly, I love my country dearly, but I have strong concerns that maybe we are headed in the wrong direction and have been doing so for decades! This post is not the beginning of a political critique about this administration, the last one, or even the last two or three administrations before that.

I have a number of clients who are miserable in their current jobs and are suffering from so-called “job lock”. I thought I would write about a potential escape from the salt mine of current employment. Many of my clients have great ideas and vision for opening their own businesses, but they are so worried about the loss of health care benefits that they cannot ever seem to launch their new life as a small business owner. Whether it be good, bad or ugly, I have no opinion. I just point out that Obamacare might help loosen the bonds of “job lock” for these would be business owners.

However, before venturing out on your own, it might be a good thing to erase troublesome debts with a bankruptcy filing. Many famous business and political figures from the past got a fresh start on their financial lives by filing bankruptcy, including Abraham Lincoln, Henry Ford, Walt Disney, H. J. Heinz, and Milton Hershey. What a different country we would live in today without the courageous acts that Lincoln, Ford, Disney, Heinz, and Hershey took—not only the ones that made them famous, but the acts that cleared away the unrelenting pressure of debt, and enabled them to lift their spirits and thoughts to greater pursuits that are such major parts of American life and culture today. Take stock of your own financial situation. If you see that it is time to clear your financial decks, then we are here to help—contact us today. Then you too will be free to pursue your dreams, whatever they may be, for you and your family.

Cities Weigh Use of “Eminent Domain” Powers to Help Underwater Homeowners

City of North Las Vegas city hall
Richmond, California is considering helping its underwater homeowners. Underwater homeowners are those who owe more on their homes than the homes are presently worth.

The proposal would involve the city using its powers of “eminent domain”. This power is usually employed to take property away from an owner—while paying the fair present market value for the property—in order to use the property for some public good or use, such as the widening of a highway or the establishment of a park.

Richmond proposes to seize the underwater homes by paying the mortgage lender the fair market value of the parcel, which in these cases would result in the mortgage holder receiving far less than the mortgage balance.

Then the city would recoup its payoff to the mortgage holder who received the payoff by “selling” the parcel to the homeowner at 15-20% more than what the city paid the mortgage holder in the eminent domain proceeding.
The transaction would be completed when the homeowner secured financing to buy their property back from the city by paying 15-20% more than what the city paid for the property in the eminent domain proceeding. The 15-20% differential would be split between the city and an investment group called Mortgage Resolution Partners both to compensate the city for its troubles and to make a tidy profit for Mortgage Resolution Partners (MRP).

If Richmond follows up on the proposal, then it will be the first in the nation to use its power to seize private property as a means of addressing lingering fallout from the foreclosure crisis.

Sensing an issue, Wells Fargo and Deutsche Bank, acting on behalf of investors who hold homeowner loans in the form of mortgage-backed securities, filed suit. The banks contend that the plan is an illegal scheme to reap windfall profits for Mortgage Resolution Partners, while the city of Richmond takes a small cut as its “fee for renting out its eminent domain powers.”

However, U.S. District Court Judge Charles Breyer of San Francisco tossed out the lawsuit, saying it was premature because Richmond was only investigating the proposal and had not yet moved to use its powers of eminent domain to seize any property.

As quoted by Hudson Sangree of The Sacramento Bee, Richmond mayor Gayle McLaughlin says that the city must step in because the banks that contributed to the crisis haven’t acted to help communities recover, “These bankers have caused so much harm; a lot of them should be sitting in jail,” says McLaughlin, a Green Party member.

The city may be considering that as more and more houses are abandoned, it is losing its population of owners dwelling in their own homes as investors scoop up the homes and turn them into rentals.

Another city, North Las Vegas, Nevada considered a similar proposal from Mortgage Resolution Partners, as reported in the public policy blog of the American Enterprise Institute. The North Las Vegas, Nevada city council voted in June 2013 to enter into a 60-day advisory services agreement with Mortgage Resolution Partners. The idea was to consult with MRP over the next two months on how the process might work.

City elections in June may have changed the balance of power on the city council, leading to the rejection of the proposal. Two of those bullish about the proposal—former Mayor Shari Buck and term-limited Councilman Robert Eliason—both departed after June’s election, leaving Anita Wood and Pamela Goynes-Brown as the only two sitting council members to vote in favor of the proposal’s reintroduction this week.

By the date of a council meeting in early September, both council members had backed away from the effort, according to a story in the Las Vegas Review-Journal. Anita Wood commented on her change of heart in the story.

“There are still a lot of questions,” she said. “There are still issues over whether tax abatements will continue after the end of this year at the federal level. There are legal proceedings in the state of California that still need to be resolved and I think they need to be resolved in California, or at the federal level, before the City of North Las Vegas gets involved in this.”

To date, I am not aware of any Washington cities considering this proposal. Stay tuned…