Tag Archives: Tacoma Bankruptcy

Hollywood secrets: 7 big stars and their almost unknown bankruptcies and bonus: 8 best uses for the first $1,000 of your tax refund

Even after a long day of sympathizing with clients as they share financial troubles, I still have ample appetite to consume the latest news story of a celebrity’s financial train wreck.   I cannot pass up a headline announcing the latest financial woes of the famous and telegenic.  Even after a 20 client day, I will still pause to read about a celebrity debt default.   I sometimes ask myself:  How could all of that talent, fame and fortune leave one insolvent? How ever did it happen?

 The layout of this blog post is unique:  following every (ho-hum, yawn) financial inspiration tip of what one might do with the first $1,000 of any tax refund is a little tiny tidbit of irresistible celebrity financial muckraking.

 You will get seven celebrity financial crashes and eight financial advice tips about how you might spend the first $1,000 of your tax refund – all mixed in one package.  I think that is a square deal.

Enjoy!

The average tax refund is $2,913.00 – some of this is understandably might used for “catch-up” on household obligations or to repair aging vehicles.  But if you can spare $1,000.00 of the refund, consider using the $1,000.00 for the benefit of your financial future – so I present eight tips about how to best use $1,000.00 of your 2012 tax refund.

 But on to the crashing celebrities:  We almost all know about Mike Tyson’s 2003 filing for bankruptcy protection and Anna Nicole Smith’s two filings.   But did you know about Walt Disney’s bankruptcy filing?  After bankrupting at age 21, he went on to found a company that grossed $38 billion in revenue last year.

Some of our most loved and respected celebrity entertainers have faced financial woes and were able to reconstruct their lives and finances with the assistance of the US Bankruptcy Courts.

If you are besieged with bills and collectors (or know someone who is) – then reach out to us for a consult and let us open the door to a bright post-bankruptcy future.  Just consider Walt Disney…. he did just fine after bankruptcy.

1.   Tip:  Use $1,000 of your tax refund to open a Roth IRA for yourself, a child or a grandchild (or even a nephew or niece!).  If you, your child or grandchild had taxable income for the year (even if no tax was due or paid) you can usually contribute up to $5,000.00 into a Roth IRA for yourself or that child or grandchild.  But lets take it easy, as $1,000 would be more than a generous.  The Tax Code provides the rest of the generosity as this contribution will grow tax-free year after year, and it can be withdrawn tax-free after age 59.5 years.  What greater gift than to begin the creation of a nest egg for yourself, a loved child or a grandchild – so toss in $1,000.00 and watch it grow!  Even if you or your loved one has financial troubles in the future, the money in the Roth IRA is virtually unreachable by creditors.  Now on to the celebrity financial woes……

2. Celebrity bankruptcy:  Actor Sherman Hemsley “a/k/a George Jefferson” filed for bankruptcy protection in June 1999.  He was unable to repay a $1 million dollar loan and had IRS issues to boot.  After some time he did withdraw his bankruptcy petition after negotiating repayment arrangements with his creditors.

3. Tip: Use $1,000 of your tax refund to replenish your emergency fund – set up a separate savings account for this purpose at a bank where you don’t normally do business.  If you want to REALLY  go for it, set up a paycheck allotment or auto-deposit of $100 monthly into the same emergency fund.  In just two years, this fund will grow to nearly $5,000.00.

 4. Celebrity bankruptcy: Actress Kim Basinger filed in 1993 after a town she purchased in 1989 (at the encouragement of relatives) turned into a financial nightmare.  She had hoped to turn the whole town into a theme park of some sort, partnering with investment company Ameritech.  Also compounding her financial challenges was an $8.1 million dollar judgment against her for withdrawing from the film “Boxing Helena”.  Eventually Kim bounced back well, winning an Academy Award for her film role in “L.A. Confidential” and eventually settling the $8.1m lawsuit for about half of what she owed.

5. Tip:  Get a Professional Review of Your Finances from a fee-only non-commissioned financial advisor – which usually costs less than $1,000.00.  How is this different from calling Edward Jones or Charles Schwab?  There is a big difference, as your local stockbroker is a salesperson, not a truly neutral financial advisor.  Contact the National Association of Personal Financial Advisors for a local referral.  A note of caution: if you have not yet filed your own bankruptcy to be rid of burdensome debt, I doubt that your friendly financial advisor will be able to instantly resolve financial woes.  But once free of hopeless debt, you may have a little extra in the household budget – and this could be wisely invested  in mutual funds, IRAs, GETT educational credits or other funds to suit your family’s long-term needs as recommended by your professional (non-commissioned) Personal Financial Advisor.

6. Celebrity bankruptcy: Crooner Wayne Newton  “a/k/a Mr. Las Vegas” filed for bankruptcy protection in 1992.  His woes then included $20 million in unpaid bills related to a libel lawsuit he had filed against ABC for claiming that organized crime was involved in some of his casino dealings.  By 1999, Mr. Newton was doing better, but again faced financial problems by 2005, including a $1.8 million IRS taxes and $60,000 in unpaid airplane storage bills.

 7.  Tip:  Improve your home’s curb appeal with a $1,000 tax refund trip to Home Depot.  Yes!  You get to go shopping!   $1,000 will buy a trip to Home Depot for some new landscaping shrubs, a stylish new front door with fancy door knocker, a gallon of paint and three pink yard flamingos.  There are two reasons for sprucing up your home: If you have to suddenly relocate and sell your home to chase a new job, you will be glad you took care of this “sprucing up” when you had the extra funds and time.  Plus, coming home to a pretty home after a long day of work or job hunting is truly gratifying.  Don’t own a home?  Then plan “B” for those not owning a home is a little weird – spend $500 on professional wardrobe items and save the other $500 for your emergency fund – because should you eventually want to purchase a home or change apartments,you are going to need that $500 you placed safely in your emergency fund!  Likewise, looking professional at work is never a poor investment.

8. Celebrity bankruptcy: Singer Vince Neil a/k/a Heavy metal band “Motley Crue” frontman.  Mr. Neil has actually filed for bankruptcy twice, the most recent time in 2010.  One of his creditors was his lawyer, to whom Mr. Neil owed $16,000.00, for getting him out of many a heavy metal jam.

 9. Tip: Hire a lawyer to write your will for $1,000.00 from your tax refund.  Yes, you can cheaply use an online form downloaded from the internet from legal zoom or worse and avoid the lawyer fee – but watch out!  There are many issues you might overlook, and legal situations are treated differently state to state, so your Florida oriented form might not work so hot in Washington.  Here are a few examples of subtle issues a lawyer might better address:  Nominations in your will of a guardian to care for minor children, care for pets upon your passing, “health care directives” which direct when the medical establishment should back-off providing medical care to you and finally, addressing confusion between the death division of “non-probate” assets such as life insurance policies, IRAs and 401k’s and “probate assets” such as homes and realty investments.  Special note: if you have not revised your will or changed financial asset beneficiary designations since completing a divorce, you had better get on it!

 10.  Celebrity bankruptcy:  Baseball player Jose Canseco walked away from his 7,300 square foot Encino, CA mansion in 2008.  While technically not a bankruptcy, abandoning your mansion seems pretty darn close to bankruptcy to me.  Jose retired from baseball in 2002 after a long and highly compensated career with the Oakland Athletics.  In 1988, he was the first player in major league history to steal 40 bases and hit 40 home runs in the same season.  Two costly divorces and a steroid scandal laid low Jose’s finances and his mansion was foreclosed.  He tried out for the L.A. Dodgers in 2004, but was passed over.

 11.  Tip:  Hire a personal fitness trainer and diet coach with $1,000.00 from your tax refund.  Try two sessions per week (one hour per session) at between $50 and $75 per hour to learn modern fitness technique.  This seven to ten week investment may be the best money you ever spend.  Fitness trainers and diet coaches are not just for movie stars any longer.   I know that trainers work: Before starting with my trainer, I had never heard of “short burst cardio” – “burpees” – “bosu balls” – “kettle bells” – “arnolds” or “skull crushers”.  With a richer vocabulary, a slimmer midsection and a much more positive mental attitude I strongly recommend a fitness coach.  I revolutionized my diet with the trainer’s help and went from 219 pounds down to 201, dropping six inches off of my waist from 38 to 32.  If not for the personal trainer, I would still been stuck in the same old unsuccessful exercise rut.  Try the trainers at the YMCA for economy – but if you want the best, then try “The Club at Gig Harbor”, where I meet my trainer.

 12. Celebrity bankruptcy: Mark Twain filed for bankruptcy in 1894 after a failed investment in an automatic typesetting device called the Paige Compositor.  The investment cost Mark Twain his fortune (and also cost much of the inherited fortune of his wife), but he bounced back after bankruptcy.  He went on to replace at least a portion of his fortune as a lecturer.  Ironically, the man who coined the phrase “the Gilded Age”, Mark Twain, went broke.

 13. Tip:  Spend $1,000.00 of your tax refund to beef up career skills.  Consider courses at community colleges or some on-line courses to strengthen the weaker portions of your resume and experience.  A stronger resume can ease a transition into a new position with your current employer, or provide you with a new classroom learned skill that will be a focal interview “talking point” if you are interested in reaching out to new potential employers.

 14. Tip:  If you have not yet paid off your debts in full, then invest $1,000.00 of your tax refund money in the bankruptcy services of James H. MaGee.  Each year that you toil along with debt means one less year to accumulate adequate retirement savings and one more year of hope-robbing and health-corroding stress.  A bankruptcy case can often mean quickly restored creditworthiness – call us for a consult, and I can explain how and why!  253-383-1001 www.washingtonbankruptcy.com

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 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 Three

This is t he third installation of Retirement But Not Totally, finishing off the Forbes.com list of top 25 places to retire, here are numbers 8-1.

  • 8. Oklahoma City, Oklahoma: Oklahoma has a top-rated tax climate and an unemployment rate of 5.5%.  Housing prices are an average of $143,000 and cost of living is cheap.
  • 7. Pittsburg, Pennsylvania: Unemployment is 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 doctors per capita ranks at one of the nations highest.
  • 6.  Provo, Utah:  Cost of living is average with homes going for $210,000 on average.  This town is Brigham Young University’s hometown and has a 5.5% unemployment rate and a favorable tax climate.
  • 5.  Rapid City, South Dakota: So close to Mount Rushmore, Rapid city has an excellent job growth track record and housing prices average $152,000.  Unemployment is down to 4.1%.
  • 4.  Salt Lake City, Utah:  This is Utah’s largest city and enjoys a 5.6% unemployment rate.  Ranking number six on Milkens Institute job and economic growth index, Salt Lake City’s cost of living is 5% below the national average.
  • 3.  San Angelo, Texas: Cost of living is far below the national average as is San Angelo’s unemployment rate.  Home prices average at barely $100,000 and this town’s diverse job base and colorful city make for a satisfying place to reside.
  • 2.  Shreveport, Louisiana:  With a 6% unemployment rate, Shreveport has a high job growth prospect.  Cost of living is below 4% the national average and this city sits close by a medical school ensuring plenty of doctors per capita.
  • 1.State College, Pennsylvania: 4.9% unemployment rate, $210,00 average housing prices and a high prospect for job growth, make this beautiful college town an ideal choice for living and enjoying the excitement and  economic advantages that Penn State provides.

Retirement should not be all about staying at home or going out and going on expensive trips.  With the right move and planning, everyday could be exciting and active.  But with debt holding you back from enjoying your retirement, bankruptcy may be your best option for a fun and fulfilling retirement.

With rising cost on just about everything, it is hard to go out and enjoy life, especially when burdened with debt.  But with bankruptcy, you are able to go back out and enjoy the things you may want to do.

 

The article can be found at:

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/

Does the bankruptcy double standard play a role in personal bankruptcy?

A recent article from The New Yorker highlights a troubling disparity in the way we view bankruptcy and loan restructuring in general in this country. As was evidenced in the recent bankruptcy filing of American Airlines, bankruptcy for corporate entities is generally considered part of an overall savvy approach to managing debts and investments.

While American Airlines could have continued paying its debts (it filed bankruptcy with more than $4 billion in the bank), it opted to take the bankruptcy route, which will allow it to restructure its debts into ones that make more financial sense. After the company filed its Chapter 11 bankruptcy petition, most analysts praised its decision, citing the success other airlines have had with reorganization bankruptcies in recent years.

However, for consumers interested in filing personal bankruptcy, the attitude of the general public is vastly different.

The current turmoil in the housing market highlights exactly how differently the general public views personal bankruptcy:

  • The housing bubble falsely inflated housing prices. Arguably, the analysts and economists who were equipped to recognize this bubble for what it was an attempt to prevent its burst did not. Also arguably, consumers might have recognized the bubble, but were less likely to do so than those trained in economic fields.
  • Lenders and homebuyers took on risky debts, betting on rising home prices to pay them off. We now know that those debts were not so good.
  • Many banks lost millions or billions of dollars on bad home loans. Some of those banks benefitted from taxpayer-funded bailouts. Others have staunchly refused to refinance (on a significant scale) mortgage loans that have become untenable for their borrowers.
  • Many homeowners are underwater on their homes. Sources note that many Americans owe up to 50 percent more than their home’s value on their loan. The “smart move” financially for these people would be to walk away from their mortgage, to abandon their homes and stop paying their mortgages. Most don’t, though.

One of the major reasons more homeowners aren’t walking away from their unaffordable homes, even though such a move would be financially logical, is that nonpayment of loans has been morally stigmatized in the media.

Figures including the head of the Mortgage Bankers Association have reportedly noted that defaults on home loans “send the wrong messages” to community and family members. Others have hinted that we would do well to bring back debtors’ prisons. The total effect, in other words, is that personal bankruptcy and similar moves (even when they’re financially savvy) have been labeled as morally deleterious.

The New Yorker article summarizes the problem in its closing paragraphs, noting that the prevailing attitude in the U.S. runs that individuals ought to “do the right thing” by honoring their debts, but that large businesses, banks, and corporations—who usually have much more capital at their disposal—can do whatever earns them the greatest profits.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. 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, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

How can I avoid bankruptcy fraud allegations?

Every so often, there’s a local news story about someone who has been convicted of bankruptcy fraud. This week, the case belongs to one George Raynor, of Baileyville, Maine. While the case itself isn’t exceptional in any way, it highlights an important precaution for potential bankruptcy filers to note in order to avoid a fraud conviction.

Bankruptcy fraud is exactly what it sounds like: a bankruptcy filer’s provision of false information to the court that alters the outcome of his or her bankruptcy case. In some cases, bankruptcy fraud can be unintentional, but its penalties are steep: those convicted of bankruptcy fraud might face up to five years in jail and up to $250,000 in fines.

Common examples of bankruptcy fraud include an attempt to shield property from the court; a filer might attempt to transfer property from his or her name to the name of a friend or family member or might simply fail to report ownership of a piece of property or sum of money.

But bankruptcy fraud can also occur when a filer fails to mention income he or she is expected to receive in the future. Raynor’s case falls into this category.

According to the Bangor Daily News, Raynor and his wife filed a bankruptcy petition in 2006 but, in their list of assets, did not mention:

  • A savings account in a bank;
  • A deferred compensation retirement account valued at roughly $150,000;
  • A lump sum payment from his retirement account in the amount of $97,000; and
  • A payment from his former employer of $12,000 as compensation for unused sick and vacation days.

Now convicted of the charges, Raynor could see as much as five years behind bars and fines of up to a quarter of a million dollars. To date, Raynor’s sentencing has apparently not been scheduled. Often, the amount of the fine assessed on a bankruptcy fraud conviction roughly equals the amount of money or value of property that the filer attempted to withhold from the court.

One of the easiest ways to avoid bankruptcy fraud is to work with a bankruptcy lawyer. Working with someone who is familiar with state bankruptcy laws and the procedures of the bankruptcy court can go a long way toward avoiding mishaps that could delay or derail a case.

Lawyers can also advise filers about which of their assets they must list, whether gifts or property transfers will be considered legal by the court, and what outcomes they can expect from their bankruptcy case.

In cases where a filer may have future income due to him or her, a lawyer can help determine how to calculate the value of that income and how to report it on bankruptcy filing paperwork.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. 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, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

Is student loan debt a bigger problem than credit card debt?

USA Today recently reported that student loan debt in the United States, which totals $850 billion, now exceeds outstanding credit card debt in the U.S., which totals $828 billion.

USA Today gets its numbers from a web site publisher named Mark Kantrowitz, who publishes two scholarship matching services called FinAid.org and FastWeb.com.

A more interesting element of this issue has to do with the monthly repayment numbers facing borrowers. The USA Today article suggests that $30,000 of student loans, payable at 6.8% interest over ten years would amount to $350 per month. At this level of debt, the average person would need to earn at least $42,000 per year.

In a bankruptcy context, student loan debt is not dischargeable except in cases of “undue hardship.” In most cases, “extreme hardship” has essentially been limited to student loan debtors who have a medical issue that prevents them from working. At this point in time, debtors have not been successful in arguing for hardship discharge on the grounds that they cannot find a job in this economy that pays enough to support their student loan obligations. There was a recent Supreme Court decision involving student loans and bankruptcy, but that case did not address the substantive issue of what constitutes “undue hardship.”

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. 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, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.