Tag Archives: financial crisis

5 Financial Scams That Target Your Money

Financial strain combined with busy lives can compromise the ability to make sound financial decisions. Are you a generous person with precious little time to research charities? Are you too busy to carefully monitor your online profile? If “yes” to any of these questions is your answer, then I caution you: be aware of these five financial scams.

The financial scams that we will review can be categorized as either “get ahead” scams or “help” scams.

In nearly 20 years of law practice emphasizing bankruptcy, I have been very impressed by the generosity of my clients. At the same time, my clients are generally hardworking people, and are exceptionally busy. They often provide substantial financial help to family as well as support to charitable causes like disaster relief, religious groups, or charitable organizations—sometimes in combinations. Balancing families, commitments to others, and workplace responsibilities, it is no wonder that my clients sometimes don’t take the time to investigate whether an opportunity or a request for help is truly legitimate, or whether it is an exploitative scam.

The “help” scams that touch the hearts of my generous clients make me sad. Unfortunately, the best of intentions and most generous of natures are exploited from time to time by unscrupulous shysters.

When it comes to “get ahead” scams, I sometimes sadly learn that their efforts, and drive to get ahead financially have been exploited by equally shady characters.

Both types of scammers are very active now. They know that many innocent, good-natured people may have a little extra cash this spring. The scammers step up their efforts in late February, March, and April because their targets may receive federal tax refunds.

Even if you aren’t expecting a tax refund this year, you may still be a target for the scammers. The “get ahead” variety will attack whatever funds you’re willing to part with in the hopes of investing in bettering your life in some way.

We all remember the old internet email scams of yesterday; clumsily written, and misspelled email come-ons offering huge windfalls in exchange for helping some long-lost offspring of exiled monarchs move a still larger fortune from some small country to ours with your help. All you need provide is a complete personal dossier that enables identity theft and a raid on your bank accounts.

Today’s newer scams are often better written, and sound more plausible, than the offers of a huge commission for helping someone move funds from overseas. These new scams are still every bit as dangerous to your family’s finances and identity as those that originated in the mid-90s.

Three Questions

Let me ask you three difficult questions:

If you are under either financial stress or have an unexpected need for income, would you consider an offer to “get ahead” quick?
Has your good nature and willingness to sacrifice a bit of your worldly goods—perhaps feelings of guilt for the conditions that you see the needy in when compared to your own—led you to consider doing something—anything—that could “help”. You may feel that you are either too busy or that it is rude to question the veracity of those who make such plaintive entreaties for urgent financial help?
Are you too preoccupied or does it seem too confusing to properly monitor your profiles on social media? Unprotected, open profiles provide scammers the best hunting grounds for opportunities and information.

If you don’t consider yourself at risk in any of the aforementioned areas, do you know of a friend or loved one who might be financially pressed or overly generous, and may more easily fall prey to one of the scams we described above? If under financial strain, you can always contact with us for a free and confidential consultation. If a friend or loved one is in need, we welcome you to accompany them so that you can provide moral support and encouragement. After all, that is why we have friends—for support and encouragement.

If you or a friend or loved one owes money on medical bills, taxes, credit cards, collections or court fines, by all means call us. If you or a friend or loved one is struggling under the weight of a costly mortgage or vehicle payment, then please come in for a consult. Don’t fall prey to the allure of a scammer’s “get ahead” story.

The Five “Big Ones”: The Hottest Scams of 2012-2013

Over payment/Fake Check/Car Ad scams: – A “get ahead” scam. The online ad says: “Get Paid Just for Driving Around”—naming a prominent and reputable company offering $400 or more per week to drive around with the company’s logo on signage placed on your vehicle. The scammers are convincing; they even mail you a check with strict instructions to wire-transfer part of the money to the “appointed” graphic designer who will create, customize, and deliver the advertising banners which will be later mailed to you for placement upon your vehicle. When the check mailed to you bounces a week later, the “graphic designer” is long gone, you are out the money which you wired over to the “graphic designer”, and you have a nice overdraft situation to deal with at your local friendly bank or credit union. Exasperating!
Emergency Scam: Grandchild or friend in trouble overseas! Help! I am in London and lost my wallet so can’t even pay for a phone call to explain, so I am contacting you by text message or email to send me $500 (or more) by wire transfer. Some nice person lent me their computer or this text messaging capable cell phone which can’t make nor accept overseas calls. That’s why—and how—I am able to contact you only by text message or through this new email account I just set up at the local Internet cafe. I need to pay an overdue hotel bill, and to make travel arrangements, so if you could please wire $500.00… You get the picture of course.
Thanks to social media sites, the scammers can feed you back a more plausible story by extracting personal details from your social media profile. For example, you might receive a very factually specific “help” scam message like, “Yeah, remember the video camera Jane got me for Christmas? I was so excited to take that new video camera I received last Christmas on this spontaneous trip to Denmark. I am so bummed that just after arriving, I was mugged, lost my cash, credit cards, and phone, and I can’t even pay my hotel bill. By the way, not paying your hotel bill here in Denmark is punishable by imprisonment. They have given me two hours to get the funds to pay the hotel bill or else the Danes are going to imprison me along with a huge bail obligation I won’t ever be able to afford.”
“Emergency” is an old “help” scam, but the new twist is that real events and names are used in the communication to make it more believable. This information is skimmed from unguarded social networking profiles.
Mystery Shopping: a “get ahead” scam. Mystery shopping can be legitimate, but to learn how it really works, visit the Mystery Shopping Providers Association www.mysteryshop.org site. You might avoid falling prey to a scam.
The mystery shopping scam is really just a variation of the over payment fake check scam described above. As a scam, the mystery shopping “employer” hiring you first sends you a check. As your first project, you are assigned to “evaluate” the customer service quality of a money transfer wiring service. You are supposed to cash the check on your own bank account, then you are to wire back some significant portion of the proceeds to the mystery shopping “employer”. They toss in a legitimate sounding requirement to complete a questionnaire about the money transfer wiring service staff—whether they were professional and courteous, etc.
When the check you received from your mystery shopping “employer” bounces, and you are left holding the bag for a large overdraft obligation, you will realized that you are the victim of a scam. Good luck tracking down your mystery shopping “employer” to make good on the bounced check.
Advance Fee/Prepayment scam: a “get ahead” scam. We all need a little extra cash from time to time to provide for family or household needs. The fraudsters know this. Watch out for “no credit check” or “easy repayment terms” for a loan advertised online. You will find there is a catch to such a great deal in that you have to first send in a payment for a “loan insurance policy” or to “secure” or “process” your loan.
Of course, once you send in the payment for the “loan insurance policy” or to “secure” the loan or to “process” the loan, you learn that there was never any loan to be made, and you have lost the funds you paid.
Charitable contribution to help those who suffered through tragic events: a “help” scam. Now, this one is really sick. While not necessarily a financial benefit/gain scam, it is among the lowest of the low. Reports abound of entreaties through social media and email seeking donations which are (falsely) dedicated to the suffering victims and their families. There has allegedly been at least one FBI arrest related to one of the many scams preying upon national sympathy for the Sandy Hook Elementary School victims.
If you do wish to donate to Sandy Hook Elementary related causes, perhaps you should first review the Better Business Bureau’s Wise Giving Alliance site www.bbb.org/us/charity to help you confirm that a charitable organization that interests you is legitimate.

Incautious generosity, financial strain, and family/work time pressures can lead to scam vulnerability and potentially to a financial disaster. Take the time to think carefully. Am I or someone I know truly vulnerable to a “financial gain” or a “help” scam? You may still be confused about some aspect of these offers, or some other major financial decision that could have life changing consequences. If so, a free 30 minute consultation with me, consumer/small business bankruptcy attorney James H. MaGee may be of help. Every situation is different, and the options may vary according to the details of the case, but as it is a free 30 minute consultation, why not take advantage of my expertise with no obligation?

Rebuilding the financial foundation for your life after falling behind on bills, or after a life changing event, is complex, no two cases are exactly alike. I may be able to help you understand your situation more clearly; I can certainly help you by discussing certain trade-offs and options concerning your situation, including bankruptcy chapters and their applicability to your situation. You can email my scheduler through our website for your free 30 minute consultation at www.washingtonbankruptcy.com or e-mail directly at [email protected]. To schedule immediately, you can reach a member of our friendly staff by calling at (253) 383-1001. Our office hours are Mondays through Thursdays, 9 AM until 5:45 PM, and on Fridays from 9 AM until 12 PM.

Who is Robert Shiller and why are his recent comments on housing price recovery so important? What does he have to say?

Robert Shiller says that values in the housing market are not poised for an overall recovery, notwithstanding spring-summer 2012 housing price increases in a some cities. He says that today’s low interest rates alone are not enough to spur a housing price recovery.

Why should we care what Robert Shiller says?

Well, this guy is big – really big. In fact, he “invented” the perhaps most widely watched economic indicator of housing market price movement in the United States.

He is “Shiller” of the Standard & Poor’s Case-Shiller 20-City Housing Price Index. So, when Robert Shiller talks about housing price movements, people listen, and listen very closely.

Mr. Shiller notes that there was in fact a 9 percent increase in housing prices over the time period March – September 2012 in his eponymous Case-Shiller housing price index. Some optimistic pundits have said that this good news shows near certain promise that we are “turning the corner” in the housing price slump.

Strongly disagreeing with these optimists, Mr. Shiller says in so many words that this 2012 Spring-Summer uptick doesn’t mean a thing in terms of predicting a long term positive trend of housing price recovery.

Mr. Shiller is more than pleased to splash the optimists with a few buckets of cold water reality.

Mr. Shiller offers well reasoned responses to the optimism of others. Mr. Shiller doubts that housing price optimism is well placed. Let’s examine three expressions of optimism and compare Mr. Shiller’s three down-to-earth responses:

1. Optimism: Concurrent with the housing price increase nemployment rates dropped from 8.2% to 7.8% March – September 2012
Mr. Shiller’s cautious response: No big deal; unemployment rate declines simply continued a trend inexistence since 2009 and unemployment tends to decline in the summer season anyway.
2. Optimism: Housing start permit applications have increased and the National Association of Homebuilders/Wells Fargo Index of traffic of prospective home buyers increased over the summer and fall of 2012.
Mr. Shiller’s pessimistic response: No big deal; the more important spring 2012 study/survey by Wellesley College’s Karl Case and McGraw-Hill Contruction’s Anne Thompson contradicts that there was no increased optimism or enthusiasm expressed by prospective homebuyers.
3. Optimism: Foreclosure activity decreased in 2012, thus presumably making less inventory available on the market.
Mr. Shiller’s discounting response: No big deal; this just continues a longer term trend in existence as reported by Realty Trac and thus should not by itself be seen as the kickoff of any long term trend of housing price increases.

Finally, Mr. Shiller presents five reasoned and discouraging response to optimism concerning housing price recovery:

1. Mr. Shiller says that the 86 percent increase in housing prices 1997 through 2006 was an historical anomaly, unlikely to be repeated by now wary investors. Such anomalies have eventually reverted to keep the long term growth in housing prices pegged to and indexed to an inflation adjusted consistent value says Mr. Shiller. The recent “housing price boom” was almost completely reversed by 2012, putting housing prices back on an inflation adjusted consistent value curve at just a point or two above ongoing inflation rates.
2. Mr. Shiller notes that there has only been one other major national housing price boom in the last century – 1942 to 1953 in which housing prices in real terms rose 68% nationally. It took 44 years (to 1997) for the next “boom” to kick in – and on that metric, the next boom is going to kick in at about the year 2050. Care to wait around for it? (Note: I, James MaGee will be 92 years of age when it starts to kick in….)
3. Mr. Shiller notes that home ownership is actually in decline, at 69% in the third quarter of 2006, down to 65.5% in the third quarter 2012.
4. Mr. Shiller notes that the wild lending that fueled the boom is more reigned in now by (a) new ability-to-pay standards announced by mortgage lenders and (b) the oversight of the new federal Consumer Financial Protection Bureau.
5. Finally, the Zillow-PulsenoicsHome Price Expectation Survey (involving the input of 100 housing price forecasters) was predicting very modest inflation adjusted housing price growth increases of only 1 to 2 percent per year over the next half-decade.

Mr. Shiller’s final word: Don’t expect an increase in your home price to bail you out of any problematic financial situation, and don’t do anything dramatic or difficult such as over-reaching financially to buy an expensive home or buy a home for short term use if you expect to have to move fairly soon, as there is too much uncertainty to justify any aggressive speculative moves right now.

Much thanks to the New York Times, Sunday, January 27, 2013 edition, page 1, Sunday Business Section: Economic View, by Robert J. Shiller; Titled, “A New Housing Boom? Don’t Count on It.”

World’s largest law firm files for bankruptcy

3 Harvard law school graduates founded the firm in 1909, and in 2007 it came to be known as Dewey and LeBoeuf. On February 27, 2013, a New York Federal Bankruptcy Judge formally dissolved the firm, putting an end to 103 years of business. The well known Dewey and LeBoeuf has ceased to exist. It is dead.

There are two important things to learn from the Dewey & LeBoeuf bankruptcy filing.

First, if 1,200 of the world’s smartest and highest paid lawyers (many of whom were bankruptcy, restructuring and workout experts!) cannot figure out how to avoid bankruptcy, then you should not denigrate yourself emotionally for being unable to avoid bankruptcy filing.

Second, you should not repay friends and relatives right before you file for bankruptcy – more on this later in the article – and this is perhaps the most important practical teaching from Dewey and LeBoeuf.

Dewey and LeBoeuf reported 2011 gross revenue of $935 million for its approximate 1,200 lawyers. The firm had a large bankruptcy and restructurings department with bankruptcy/restructuring experience dating back to the 1920s, yet the firm could not seem to save itself, despite its all-star lineup of Ivy League law school graduate partners and associates.

Even worse, a number of firm team leaders are now under criminal investigation for allegedly hiding the troubled finances of the firm. Steven H. Davis, the firm’s former chairman and Stephen DiCarmine, the firm’s former executive director, both face criminal probes and Mr. Davis has retained a defense lawyer, says the NY Times.

Sadly, the Dewey lawyers could not seem to work together to save their law firm – when the going looked rough in 2011 and early 2012, some 200 of the 300 equity partners jumped ship to other law firms. Perhaps even worse, one important law firm member, Martin J. Bienenstock (the former head of Dewey’s bankruptcy practice) was accused by two former partners Elizabeth B. Sandza and Andrew J. Fawbush of devising a scheme and plan to pay himself $6 million from Dewey funds in 2010 while the rank-and-file partners saw their 2010 pay deferred and then ultimately “clawed back” by the bankruptcy court for repayment to creditors.

What does “clawed back” mean? Well, in this context it might mean that Sandza and Fawbush (and other partners) had to refund their 2010 paychecks back to the law firm for whom they worked upon the filing of the bankruptcy, meaning much of their 2010 work may end up having been done for free and perhaps was ultimately not compensated.

How did Sandza and Fawbush end up having to refund some or all of their 2010 paychecks/compensation, along with a number of other partners?

While the news accounts I can readily find are sparse and I rely mostly on one NY Times article referenced below, here is my hunch: When Sandza and Fawbush agreed to defer some of their 2010 pay to be received later than when it was normally due to them, their ultimate receipt of pay fell into a “preference period” pre-bankruptcy, wherein in the year or so leading up to the bankruptcy, funds they received as compensation were deemed returnable to the bankruptcy court for distribution to creditors as what is known as a “preference” or “preferential transfer”. The concept might be that Sandza and Fawbush as equity partners and thus are presumed to have known what was going on with the law firm’s finances yet took pay out anyway in a time period that was too close to the bankruptcy, presumably knowing that the pay should have gone to reimburse and pay law firm creditors instead of going to pay Sandza and Fawbush their partnership share.

Why would Sandza and Fawbush be upset with Bienenstock – as Bienenstock seems not to have had his 2010 pay “clawed back” into the bankruptcy? (Beinenstock, according to the New York Times, may have been paid earlier than were Sandza and Fawbush, who saw their 2010 compensation payments deferred) Well, one can only speculate that if Bienenstock saw the trouble on the horizon he might have pushed for being paid sooner than others because he knew that if he didn’t get paid quickly and ahead of others that his $6 million payment could fall into the “preference period” prior to the eventual May 2012 bankruptcy filing. Since he was an expert on bankruptcy issues, perhaps Sandza and Fawbush believe that Bienenstock might have taken advantage of that expertise to push for his $6 million in pay sooner so that it would not fall into the suspected “preference period” and be subject to a “clawback” into the bankruptcy court for distribution to creditors.

Why blog about the failed mega-law firm Dewey & LeBoeuf? How are Sandza, Fawbush and Bienenstock relevant to a consumer mom and pop bankruptcy filing? Good questions – there are two answers:

First, I meet with so many people who are down on themselves for having to file for bankruptcy, even though they had perfectly good reasons for falling into financial hardship. These reasons include job loss, illness, falling home values, large family size and crazy home loans with “exploding arm” sudden interest rate increases. So I ask this important question: If one of the biggest law firms in the world which was chock-full of Harvard and other Ivy League law school graduates could not figure out how to pay the bills and stay solvent, then how on earth are my well-meaning clients supposed to do much better? Remember, these brainiac lawyers went through a bankruptcy filing and went on to live their lives and care for their families – why should my clients not grant themselves the same emotional luxury? Think about it: Dewey and LeBoeuf had a 103 year track record and were EXPERTS at keeping businesses out of bankruptcy and helping businesses who ran into financial trouble – yet these 1,200 experts could not muster a plan of action to save themselves, despite enjoying some of the highest pay and billings in the entire legal world. The world was their oyster – and they still couldn’t figure out how to make ends meet.

Second, the “preference” and “claw back” issues. There is a lesson here for everyone considering a bankruptcy filing. If you are facing trouble and think you may need to file for bankruptcy relief, then DO NOT, I repeat DO NOT repay friends and relative or transfer assets or property to friends or relatives right before the bankruptcy filing until after you have secured competent legal advice from a knowledgeable bankruptcy lawyer and asked the question about how much you should pay back or what you should transfer to mom. For if you repay mom that $10,000 right before the bankruptcy, then mom might find herself being sued by the bankruptcy court trustee in your bankruptcy case with a demand to pay into the bankruptcy court some or all of the $10,000. Better to just wait until after the bankruptcy is over and then voluntarily repay mother that $10,000. Plenty of people mess this one up – don’t you be one of them.

Now, there may be some times that you would want to pay mother right before bankruptcy or transfer something to a friend or relative, but these are few and far between, so before you decide to repay mom or transfer an asset to a friend or relative, make sure you consult with a competent bankruptcy lawyer before making the repayment if you think that you could potentially be facing a bankruptcy filing in the future – even the distant future.

How about repaying other creditors other than friends or family right before a bankruptcy? This blog post is already too long, so I will just say that before you make any such payments you should first consult with competent, experienced and qualified bankruptcy counsel to make sure you do not run afoul – and end up like Sandza and Fawbush. Sandza and Fawbush would essentially argue that Bienenstock knew what he was doing and that he executed it well – The result: Bienenstock will probably get to keep his $6 million, Sandza and Fawbush get nothing. Knowledge is king, my friend!

As a footnote, the NY Times reports that, all in all, about 450 Dewey partners and former partners will end up returning about $450 million to the law firm in return for insulating themselves from future lawsuits connected to Dewey’s demise.

Many thanks to Peter Lattman of the New York Times, who provided information contained herein, including details on the Sandza, Fawbush & Bienenstock dispute in his article “With a Judge’s Decision, Dewey is Officially Dissolved”, NY Times, page B5, February 28, 2013.

Can you reach the max?

Retirement is coming, if it is not already here for you. If you have income for which to fund a 401k or to contribute to an IRA, I would like you to think about these three questions I answered in this article, and the list of tips I also present in this article.

If you already have a 401k or IRA for retirement savings, you should read carefully, because a “game plan” concerning how you are going to use your retirement savings- or not use your retirement savings- is a very important foundational building block when it comes to retirement savings. Decisions about your 401k and decisions about bankruptcy are intertwined for many people.

Question 1: Should I file for chapter 7 bankruptcy to wipe out debts? Or in the alternative should I not file for bankruptcy but instead cash out my 401k to pay off debts?

Answer: With only a few exceptions, I strongly recommend a bankruptcy filing over 401k withdrawals.

Question 2: Should I file for Chapter 13 bankruptcy reorganization over cashing out a 401k account with the purpose of staving off a foreclosure or preventing vehicle repossession?

Answer: With few exceptions, I strongly recommend a Chapter 13 bankruptcy reorganization over cashing out a 401k account with the purpose of staving off a foreclosure or preventing vehicle repossession.

Question 3: Should I take out a loan or cash out a 401k or IRA in order to pay Federal Income Tax debt?

Answer: You can almost always pay back the federal income tax debt interest and penalty free through a Chapter 13 bankruptcy reorganization, or alternatively you often can enter into a very reasonable tax repayment plan with the IRS. Sometimes, very old Federal Income Tax debt is even erased by bankruptcy. Thus, for many people tax repayment though chapter 13 plan can make more sense than a 401k loan or IRA cash out. There is an additional benefit: although most people don’t realize it, if your income is not super-high, you still can often wipe out credit card debts, eliminate second mortgage obligation and write off medical bills without any repayment of these debts by filing a chapter 13 case, so in many regards, a chapter 13 case can wipe out debt much like a chapter 7 case, with the added benefit of an easy cheesy Federal Income Tax repayment plan- and state tax can be repaid easily though chapter 13 too!

These are some more very important tips about how to handle your 401k, IRA, VIP, TSP or other tax deferred retirement savings, courtesy of a great article from Forbes.com which you can find here:

http://www.forbes.com/pictures/lmf45ekmg/can-you-reach-the-max/

Can You Reach The Max Part 2

Should I file for chapter 13 bankruptcy to save my house from foreclosure or my car from repossession or should I cash out my 401k to get the money to pay the mortgage or car payment? People ask me this question all the time. Here is my answer: With few exceptions, I strongly recommend a chapter 13 bankruptcy reorganization over cashing out a 401k account with the purpose of staving off a foreclosure or preventing a vehicle repossession.

Here are the next five Forbes.com steps to help you boost your 401k:

5. Taking loans out of you 401k is hard because many times you have to pay the money back. But hardship withdrawals can be allowed. If you are behind on payments such as your mortgage that would be a loan you would have to pay back but if your house was foreclosing you could be able to take out a hardship withdrawal. Not everything is a hardship though so just make sure you know the rules.
4. Many times if you make a lot of money you can only contribute a certain amount to your 401k as to prevent discrimination. If your spouse has access to a 401k, they should be saving as much as they can as well. If you or your spouse have access to saving for a 401k, take advantage of that especially if one of you has limitations on your savings part.
3. If you have an old 401k account, you should combine the two in most cases. Add the old account to the new; it is much easier to keep track of one account.
2. When you first sign up for a 401k you pick investments and many times don’t get around to changing, or revising it to make the best choice for your savings. For example don’t just choose company stock because it’s there, don’t forget to revise your 401k and choose your best options.
1.Don’t cash out your 401k as soon as it is available to you. Leave it as long as it is still invested in good options. Just because it reaches the penalty free mark or you retire, doesn’t mean that’s the best time to cash out for you.

I might also add that under most circumstances you should not take a 401k loan or cash out a 401k or IRA to pay off federal income tax debt because you can almost always pay back the federal income tax debt interest and penalty fee though Chapter 13 bankruptcy reorganization, or often enter into a very reasonable tax repayment plan with the IRS.

If you have already taken out a big 401k loan or cashed out an IRA (or taken a large withdrawal or fully or partially cashed out a 401k) you really need to begin to rebuild.

Dating, Marriage and Credit Scores: A New Twist in the Road To A Happy Life

He was tall, religious, well employed in finance and had great teeth. Even better, he came from a nice family background, and was brought up similarly to her. She was attractive, peppy and fully employed as a flight attendant.

But Chicago’s Jessica LaShawn was dumped after a first date when somewhere between salad and dessert Jessica truthfully answered a question about her credit score. Jessica’s FICO score was subprime (below 660), as she had paid late on some bills and had some lingering unresolved debts. A couple of days later, Jessica received an apologetic text message from her potential prince charming – no second date – it wasn’t Jessica, it was Jessica’s credit score which caused him to decline a second date with her. Good bye prince charming. Good bye, white picket fence…

Credit Scores are newly becoming a relationship metric, as many people are deciding who to consider and who not to consider for marriage based in part upon credit scores. Dating site executives report that they are receiving more inquiries and interest about when and how to bring up the issue of credit scores when deciding whether to date or pursue a relationship with a potential suitor.

Similarly, many marriage counselors relate that improving credit scores is a frequent topic of discussion with marital and relationship counseling clients. Dissimilar levels of concerns about maintaining an acceptable credit score can lead to significant friction in a long term relationship.

So how does bankruptcy fit into the universe of dating, marriage and credit scores?

Credit scores affect us all. Credit scores are kept on about 200 million Americans by FICO. More than 34% of these Americans (68.6 million) tracked by FICO have subprime credit scores of less than 660. FICO is short for Fair Isaac Corporation.

About 18.5% of Americans (37 million) enjoy the highest credit score range of 850-900, another 19.0% (38 million) enjoy very good credit scores of 750-800. About 16.0% of Americans (32 million) enjoy “good” credit scores of 700 – 750 and 12.2% of Americans (24.4 million) have borderline FICO credit scores of 650-700.

If unpaid bills, high credit card balances, lingering tax debts, old foreclosures and unresolved vehicle repossession deficiency obligations are keeping you in the “below 700” catagory with respect to FICO scores, what can you do?

How about a bankruptcy? What? Doesn’t bankruptcy ruin your credit, you ask?

Well, sometimes you have to go down before you can go up.

Many experts recite that a bankruptcy will temporarily dump your credit score down to 550, but then in many circumatances you will automatically start a very steady and sure climb back to a level of 700 (good), 750 (very good) or maybe even higher.

The New York Time (April 12, 2012) reports that the car loan or credit card for which you were unable to qualify right before bankruptcy can very likely immediately be yours right after a bankruptcy filing. This might suprise you, but after bankruptcy, many creditors will actively and very aggressively again solicit your business. This sounds very counterintuitive and maybe even a bit crazy, but strangely it is true.

After almost 19 years, I keep thinking that some day I will have seen it all when it comes to Creditors. However, the Creditors keep suprising me with new ideas and schemes, and these are often to your benefit, so check out this new shocking twist: I have had a few Chapter 7 clients show up at Court bearing letters that recite in essece the following:

“Dear Newly Bankrupt Potentially Valued Client: We have reviewed that you have a vehicle financed with another lender. We want you talk to your lawyer at court about giving up that old financed car in a voluntary repossession, thus giving the car back to your lender. If you do this, then on your way home from bankruptcy court just stop by our car lot and secure quick financing for a newer and better car.”

How does that grab you? Stop by the car lot on the way home from bankruptcy court and pick up a new car? Strange, but often true.

If your marriage relationship is suffering the stress of not meeting financial and mateiral goals due to chronically low credit scores, then consider a bankruptcy filing to charge up the material needs which, face it, are an important part of living with some contentedness in a long term relationship.

We all like to say that love is enough, but we all know that every marriage has material needs and material aspirations. Even if such material goals are modest, such as replacing that aging car, starting to save for retirement or college, moving up to a more suitably sized home, getting on a cell phone data plan instead of being stuck with an expensive “prepaid phone” or maybe even renting a little nicer place to live – we all have needs and aspirations. Chronically low credit scores can take away some of the material comforts that we look forward to enjoying with our mate in a long term relationship, and these disappointments can take a little of the joy out of your daily walk of relationship and marriage.

And in Jessica’s LaShawn’s date with Mr. Right, he had her at hello…but it was quickly goodbye due to Jessica’s chronically low credit score. If Jessica had filed for bankruptcy well before her dream date appeared and had thus already started the amazingly quick post-bankruptcy credit score recovery process, she would probably have received that offer of a second date. But she was not proactive and did not file for bankruptcy. Jessica just ignored her declining credit situation because it was too uncomfortable to face. The result? Sadly, for Jessica the story is “white picket fence postponed”.

Get on with your life and start living now: Consider bankruptcy as a strategic tool for your long term dating, relationship and marital hapiness. You will be shocked at how quickly your creditworthiness is restored post-bankruptcy.

And while you are at it, spread the good news that there is hope for the future through bankruptcy- people need to know, and if you won’t tell them, they will never learn.

[Special thanks to Jessica Silver-Greenberg, for writing “Perfect 10? Never Mind That. Ask Her for Her Credit Score.” NY Times, Page A1, Wednesday, December 26, 2012.]

Considering the need for a bankruptcy filing to get your credit back on track? Contact us at 253-383-1001 for an appointment in Tacoma, Puyallup, Olympia, Chehalis, Renton or Bremerton.

Retirement But Not Totally Overview

The economy has had a great impact upon those people facing retirement. Many have lost jobs, or been forced to take jobs paying much less then pre-recession employment. In addition, many people have lost homes due to foreclosure, feeling compelled to walk away because of mortgages balances which greatly exceed their home’s value. Bankruptcy filings in the pre-retirement demographic are skyrocketing, and have been high for many years.

With rising medical costs, rising food costs and expensive gasoline, many people are worried whether social security and perhaps a small pension will provide a comfortable retirement.

One way to improve the quality of life in retirement is to continue to work, and some places in the country offer better working opportunities for retirement age people than do other locations.

Is retirement on the horizon for you? Are you worried whether your retirement income will stretch to provide a quality lifestyle? If these are concerns for you, consider relocating to one of these 25 havens for retirees who might wish to continue to work past retirement age.

Forbes magazine compiled a list of places to where a retiree or a person facing retirement might want to consider relocating if there is a need or desire to work past retirement age. Below is the “James Magee short list” of the top three places for a quality retirement.

1. Iowa City, Iowa: With Iowa Medical School in its midst, Iowa City’s doctor count is six times above the national average. Also unemployment is at 3.8% and job opportunities are growing.
2. Corvallis, Oregon: Corvallis is a college town which helps the strong economy, this city has a 5.8% unemployment rate and room for even more economic growth. There’s no state sales tax, and has plenty of doctors and a low violent crime rate.
3. Pittsburg, Pennsylvania: Unemployment is at 6.6%. Although the winters here are extremely cold, the cost of living is 6% below the national average and homes are going for $121,000. Also the doctors per capita ranks at one of the nations highest.

Retirement is a lot different then it was many years ago. In this country’s current economy, it is much harder to retire and retirement occurs at an older age. A wonderful alternative is to pursue a working retirement, keeping a job but still enjoying the retired life. Any of the 25 cities on Forbes.com’s list are wonderful alternative cities to relocate to. If you are so far in debt but you have bankruptcy as an option, it may be your best option. Your debt can be taken care of by filing for bankruptcy and once debt free you can easily relocate and start a fresh retirement in one of these cities with low unemployment rates, nice climates and so many other perks.

The Forbes.com article can be found here:

http://www.forbes.com/pictures/mjd45idmk/retirement-but-not-totally/

Retirement But Not Totally Part Two

The second installation to Retirement But Not Totally cities numbered 17-9, is packed with nine more favorable options for a working retirement.

17. Fort Collins, Colorado: Cost of living and homes are at a national average in Fort Collins, and with Colorado State close by the economy is flourishing. The cold winters here are easily bearable with the 6.2% unemployment rate.

16. Great Falls, Montana: With an above average tax climate this small town enjoys many doctors and a small crime rate. The job and economic growth are outstanding and the unemployment rate is at a below average 5.6%

15. Harrisonburg, Virginia: Near two colleges, Harrisonburg rank high on the Milken Institute job and economy rating. With and unemployment rate of 5.3% this quaint town has one of the lowest crime rate on the list.

14. Huntsville, Alabama: Alabama has a very favorable tax climate with an average economy, housing prices and unemployment rate and below average cost of living.

13. Iowa City, Iowa: With Iowa medical school in its midst, the doctor count is six times above the national average. Also unemployment is at 3.8% and job opportunities are growing.

12. Jonesboro, Arkansas: An average home in Jonesboro sells for below $100,00 and the unemployment rate is at 6.4%. Also cost of living is dirt-cheap and 13% below the national average.

11. Knoxville, Tennessee: Knoxville has plenty of doctors, an unemployment rate of 6.6%, wonderful economic growth. And best of all the Smoky Mountains provide a pretty scenic aspect to this town. One downside to Knoxville is that it has the highest crime rate on the list.

10. La Cruces, New Mexico: Just $116,000 on average housing prices, La Cruces is another college town with wonderful economic growth. 40 miles from Mexico, La Cruces has an excellent tax climate, but the doctors per capita are sparse.

9. Lexington, Kentucky: Cost of living is 11% below the national average, and housing prices are at an average of $144,000. Kentucky has a favorable tax climate, and a lot of doctors.

Is retirement on the horizon for you? Are you worried whether your retirement income will stretch to provide a quality lifestyle? If these are some concerns that have popped into your head, you may want to consider relocating to one of these 25 havens for retirees who might wish to continue to work past retirement age.

Look out for the next post, which will continue with the next 1-8 cities. Whether you are looking for a place to relocate with a warm climate, plenty of doctors, or a cheap housing, this list has many options to choose from.

The article can be found here:
http://www.forbes.com/pictures/mjd45idmk/retirement-but-not-totally/

Retirement But Not Totally

The economy has had a great impact on those facing retirement. Many have lost jobs or have been forced to take jobs that pay much less than pre-recession employment. In addition, many people have lost homes due to foreclosure and high mortgages that greatly exceed their home’s value. Bankruptcy fillings in the pre-retirement demographic are skyrocketing, and have been high for many years.

With the growing costs of necessities such as food, gas, and medical care, many people worry whether or not social security can provide a comfortable retirement.

One way to help ensure quality of life in retirement is to keep working. And there are many places in the country that can provide better working opportunities than others.

A recent Forbes.com article, highlights the 25 top cities for a working requirement. What ever your preferences may be location, culture and climate wise, this article may help you choose a top location to enjoy a comfortable retirement.

Cities 18-25

25. Athens, Georgia: This beautiful college town sits at a high-ranking on the Milken Institute’s Job and Economic Growth Index with a 6.9% unemployment rate which is a refreshingly low percent compared to the country’s average of 8.5%. Not to mention that this town enjoys very favorable climate and weather, house pricing is an average of just $130,000.
24. Austin, Texas: Perks to living in this city include low crime rate, a cost of living 7% below the country’s average, and no state income tax. House pricing is a little above the national average at $950,000, but still reasonable.
23. Bismarck, North Dakota: Doctors per capita are at an amazing 50%, which is above the country’s norm. Winters here may be cold, but unemployment rates are at only 2.8%.
22. Bloomington, Illinois: This city is the head of State Farm, which results in a steady economy. Cost of living sits on the national average and unemployment is at 6.8%.
21. Cheyenne, Wyoming: Crime rates are low and physicians are plenty. It’s one of the least populated cities on this list and has a 6.5% unemployment rate. Winters here are cold, however.
20. College Station, Texas: This is a college town, and is leading in job and economic growth. 5.8% unemployment, plenty of doctors and a warm and sunny climate also make up this town.
19. Columbia, Missouri: The physician per capita rate in this city is more than three times higher than the national average. The unemployment rate is 5.0% and this city is known for having great job and economic growth.
18. Corvallis, Oregon: Yet another college town, Corvallis has 5.8% unemployment rate and room for strong economic growth. There’s no state sales tax, plenty of doctors and low violent crime rate.

These are the top 18-25 finishers for cities offering a working retirement, so if you are looking for an economy that is more impressive than just “so-so” maybe one of these cities should be considered for your comfortable working retirement. Stay tuned for a follow-up post detailing the next 9-17 cities .

Relocation may be a great retirement planning tool. Discharging or reorganizing your debt, as seen as possible through a bankruptcy proceeding, may also be a prudent step towards retirement planning.

After bankruptcy, you may well have funds to fortify your saving accounts and 401k/IRA account. This can help ease the financial crunch which often accompanies retirement. Call us if you or a friend might like to invest in a bankruptcy filing.

Follow the link below to read the article in whole:

http://www.forbes.com/pictures/mjd45idmk/retirement-but-not-totally/

If the recession hasn’t nuked you, here is an “off-topic” post on how to survive a real nuking

I warned earlier of two “off topic” posts. The earlier was a post about the historical origin of the Lady Justice Figure (you know, the sword, blindfold, and balance scale figure). This is the second “off topic” post for those of us old enough to remember any Soviet leader prior to Gorbachev.

The New York Times reported on how to survive a nuclear terrorist attack or other true meltdown.

First, if you are in a concrete underground parking garage – stay put! You will be generally well sheltered from radioactive fallout.

Second, if you are in a home, head for the basement, if you have one.

Third, if you are in a car and can’t readily and very quickly leave it to move to an underground location, stay put.

Fourth, don’t flee – get inside.

This is all wisdom quite to the contrary of advice of an earlier time to flee the area.

The second or lower level of an underground concrete parking garage is the best place to take refuge and strangely enough, the core of a large office building about three stories off of the ground takes a second place.

Even staying put for a few hours after the “blast” in such an underground location will make a huge difference in long-term survival rates.

Here is the latest thinking from Brooke Buddemeier, a Livermore health scientist, as quoted in the NY Times Article of Thursday, December 16, 2010, as reported by William J. Broad:

“The big surprise was how taking shelter for as little as several hours made a huge difference in survival rates. ‘This has been a game changer,’ Brooke Buddemeier, a Livermore health physicist, told a Los Angeles conference. He showed a slide labeled ‘How Many Lives Can Sheltering Save?’ If people in Los Angeles a mile or more from ground zero of an attack took no shelter, Mr. Buddemeier said, there would be 285,000 casualties from fallout in that region. Taking shelter in place with minimal protection, like a car, would cut that figure to 125,000 deaths or injuries, he said. A shallow basement would further reduce it to 45,000 casualties. And the core of a big office building or an underground garage would provide the best shelter of all. ‘We’d have no significant exposures,’ Mr. Buddemeier told the conference, and thus virtually no casualties from fallout.”

Part of the “don’t flee” idea came from the expectation that the initial flash would blind many drivers on the road, resulting in so many accidents that the road infrastructure would become impassable.