Every day the headlines regarding the recession become a more confusing and convoluted.  The first big headline:  The economy is still hurting and won’t rebound until consumers begin spending more.  The second big headline:  America has too much debt.  The combination of the two concepts has all the makings of a bad sequel… getting consumers to spend themselves back into debt to make the economy healthier again.  The latest in the barrage of “spend more to help the economy” headlines is a study published conveniently by American Express.  According to their study, consumers are ready to shop again.  Two-thirds of the respondents to their survey said that they plan to increase clothing purchases, followed by dining out and travel.  It may be a little skeptical, but it seems odd that a credit card company is publishing a survey to get people to spend more, and interestingly enough, right before the holiday shopping season begins.  Before the holiday sales hit and more “official” studies are reported about how much better you should feel about spending, do a check of where you are financially and where you want to be at the beginning of the next year.    Pamela Codispoti, senior vice president and general manager of card-member services for American Express, did explain that the reason for consumers spending more is that they are making more distinctions between what the want and what they need.

Many people get into financial trouble because they fail to make the distinction between a want and a need.  Bankruptcy is a valuable tool for getting your financial health back in order.    If you are successfully discharged from a bankruptcy, remember the choices and events that lead to your bankruptcy… so that you don’t relapse financially.  Just because credit card companies are advertising that “consumers are ready spend,” doesn’t mean that you should.  Medical expenses and credit card debt are two of the main debt obligations that lead to financial distress.  Many times you can’t control medical expenses, but you do have more options when it comes to controlling your credit card.

If you are already struggling with debt, the general message of using your cards wisely is even more important.  As the economy struggles to rebound, many people are having the same trouble rebounding from their high credit card bills.  Depending on the types of debt obligations you have, you can work out effective repayment or discharge plans through bankruptcy.  A bankruptcy attorney can review the different options with you to see which type of bankruptcy best fits your situation.   Instead of racking up more debt this holiday season, considering giving yourself the gift of relief by getting your debt under control.

Sometimes people get the idea that they can file for their own bankruptcy.  This is perfectly legal, but it usually isn’t a smart idea.  Most, if not all, individuals make mistakes when going through the process.  In the book, Personal Bankruptcy For Dummies, it tells the story of Bill and the mistake he made when filing bankruptcy.

The book says:

“Bills’ bankruptcy documents showed that his monthly income exceeded expenses by $500.  As a result, the United States Trustee charged that his Chapter 7 case needed to be dismissed because he could repay a significant amount of his debts.  Bill then discovered that he’d underestimated some of his expenses and that actually he was barely making ends meet.  Uh-oh!  Although Bill amended his schedules, the court was skeptical because it looked like Bill had cooked up these additional expenses just to avoid having his case dismissed.”

As you can see, mistakes can be made, and they can be costly.  It would have served Bill well to hire a bankruptcy attorney that deals with these situations on a daily basis.  Bankruptcy is a great tool for people to get a second chance with their financial life, so make sure you are doing the right thing by having a bankruptcy attorney on your side.

Additionally, another lesson can be learned from this too.  Once you pick a bankruptcy attorney, make sure that you tell them everything about your financial life.  You can’t afford to hold back or sugar coat anything.  You must be honest and open about every detail.  This will allow the attorney to decide what the right choice for your situation is.

At any rate, if you are considering bankruptcy, take the time to contact a bankruptcy attorney.  There isn’t any obligation, and it could save you a lot of money and headaches.  You don’t want to make the same mistakes Bill did.

There are several terms, definitions, and procedures to understand when going through bankruptcy, and one of those is the means test.  To put it simply, a means test determines whether or not you have the “means” to pay for some or all of your debts.  Wikipedia describes the means test well.  It says, “The means test is perhaps best recognized in the United States as the test used by courts to determine eligibility for Title 11 of the United States Code Chapter 7 or Chapter 13 bankruptcy.”

If you are familiar at all with bankruptcy you will know that significant changes were made to United States bankruptcy laws in 2005.  One of the most noteworthy changes was in regards to means testing.  Wikipedia described the amendments by saying, “The amendments effectively subject most debtors who make above an income, as calculated by the Code, above the debtor’s state’s median income to an income based test.  This test is referred to as the means test.  The means test provides for a finding of abuse if the debtor’s income is higher than a specified portion of their debts.  If a presumption of abuse is found under the means test, it may only be rebutted in the case of special circumstances.  Debtors whose income is below the state’s median income are not subject to the means test.”

If you’re in a rough financial situation, don’t fear because the means test is generous in regards to which bankruptcy you qualify for.  Almost everyone seeking bankruptcy qualifies under the means test.  Anyway, the rules regarding the test are confusing to a newbie, so it would be best to speak with a bankruptcy attorney for help.  You can also use a means test calculator to help you determine if you qualify, but it won’t include all the details that you will need.

If you are struggling under the weight of mounting debts, bankruptcy can be your second chance.  Contact a great bankruptcy attorney.

Just a couple of years ago, people all over the world looked on in wonder at Dubai’s growth.  The country was booming, growing, and building, but they have fallen victim to the recent economic downturn just like everyone else.  The problem with living in Dubai though is that loan defaults are a crime.  An article on Minyanville.com, a money and life news outlet, talks about the situation in Dubai.

The article said of Dubai’s recent fall, “That renaissance has now ground to a virtual standstill, thanks to the same negative economic circumstances that have dragged down just about every other economy.  Foreigners are no longer swept up by the glitzy promise of Dubai.  An estimated 1,500 visas are being canceled each day in the city, and the total population is expected to decline by 8% this year by some estimates.”

As a reason for the population decline, the article went on to say, “Weakness in Dubai’s financial sector led to thousands of layoffs, which led to thousands of mortgage and loan defaults.  However, unlike the United States, defaulting in the Emirates is a crime, almost always leading to prison time.  It’s no wonder, then, that the suddenly unemployed tend to flee the country.  According to numerous published reports, approximately 3,000 cars that once belonged to foreign residents are now sitting abandoned at Dubai’s airport gathering dust, the Pompeii-like remnants of lives interrupted.”

Anyway, it is interesting how different things can be in other countries.  Hearing the stories of these unfortunate people losing their jobs can truly make you feel lucky.  In the United States there are long standing laws that give debtors and the unfortunate second chances.  It is proven that giving people second chances with their finances benefits everyone the most in the end.

If you are struggling financially, be thankful that you live in the United States, and then use the tools that are provided to you to get your second chance.  There is no better person to help you than a bankruptcy attorney, so contact one today.  You will be able to setup favorable repayment plans, or you can have debts completely wiped out.

One of the biggest benefits to filing for bankruptcy protection is the automatic stay.  This occurs upon the filing of a bankruptcy case, no matter which chapter it’s filed under, and forbids the continuance of any action by any creditor against the debtor or the debtor’s property.  The automatic stay protects the debtor from all creditors, under the supervision of the bankruptcy judge, and collects all of the debtor’s assets and creditors into the same forum, the bankruptcy court.  It is here where the rights of all parties will be balanced as best as possible.

Amendments to the Bankruptcy Code in 2005 placed limits on the duration of the automatic stay for those who are repeat filers: debtors with a prior case pending in the last year that was dismissed get a stay of 30 days; debtors with two or more cases pending in the past year but dismissed get no stay at all.  In these situations, the automatic stay isn’t automatic at all–the debtor must request a stay from the court in order to get that protection.

The following acts are prohibited under the automatic stay:

* Beginning or continuing law suits;

* Collection calls;

* Repossessions;

* Foreclosure sales; and

* Garnishment or levies;

The automatic stay will remain in effect until:

* A judge lifts the stay at the request of a creditor;

* The debtor gets a discharge; or

* The item of property is no longer property of the estate.

Once the debtor’s bankruptcy is discharged, the automatic stay is replaced by a permanent injunction prohibiting creditors from all of those actions relating to discharged pre-petition debts that the automatic stay previously prohibited.

The automatic stay is not a “get out of jail free” card and will not stop the following:

* Criminal proceedings;

* Actions for a family support order or the modification of such order; or

* Actions to collect support from property that is not property of the estate

* Tax audit, demand for tax returns or assessment of tax (actual collection of tax is still stayed).

Those who willfully violate the stay can be held liable for actual damages caused by the violation and sometimes for punitive damages.  Courts can confine the right to damages to individual debtors and deny damages for stay violations as to corporate debtors in certain cases.  Since courts typically take several days or even weeks to mail creditors notice of the bankruptcy, the debtor or debtor’s counsel absolutely should give actual notice of the automatic stay to creditors to make sure they do not take any actions in the meantime.   Most creditor actions taken after the stay is in place are considered void or voidable, meaning any action the creditor takes in violation of the stay will have no legal effect on the debtor.

Since bankruptcy is such a complex proceeding, consumers may wish to consider consulting an experienced bankruptcy lawyer in order to discuss the ins and outs of bankruptcy protection and the automatic stay as pertains to their specific cases.

Unfortunately, sometimes small businesses have more trouble getting off the ground than they anticipate when their owners first start them.  Maybe the economy took a turn for the worse at the worst possible time.  Maybe certain markets are suffering temporary setbacks.  Ideally, the business owners will be able to hang on to things until business–and profits pick up.  But what if things go from bad to worse–or even worst–and it looks like the business is going to go completely belly-up?  It may well be time to consider filing for bankruptcy until things turn around again.

There are three basic times of bankruptcy businesses can file.  Sole proprietorships exist as legal extensions of their owners.  Thus, the owner is responsible for all assets and liabilities of the company.  These types of companies are eligible to file for Chapter 7, Chapter 11, or Chapter 13 bankruptcy protection.  Corporations and partnerships, on the other hand, exist as separate legal entities and their owners are not personally liable for company assets and liabilities.  These types of companies can file for either Chapter 7 or Chapter 11 bankruptcy.

Chapter 7 bankruptcy is typically the best choice in situations where you know the business just isn’t going to make it out of bankruptcy intact.  Usually referred to as liquidation, most companies only use this form of bankruptcy when the business debts are just so overwhelming that there is no feasible way to restructure the finances.  Chapter 7 is also a good idea in cases where the business lacks any substantial assets.  For instance, if the company is really just an extension of the owner’s skills or services, it usually isn’t worth it to reorganize so Chapter 7 just makes the most sense.

How does Chapter 7 bankruptcy protection work?  Simply enough.  The court appoints a trustee to oversee the distribution of the assets among the creditors.  Typically this involves selling off eligible assets and then paying as much as possible to the creditors.  However the trustee distributes the business assets, once they’re all divvied up and the trustee is paid, the business receives a “discharge” and the bankruptcy proceedings come to an end.  At that point, the business owner is releases from all obligations relating to those debts.  Partnerships and corporations, however, do not receive a discharge.

Chapter 11 is more appropriate for businesses that just need some breathing room to get things back on financial track.  Under Chapter 11 bankruptcy, the company is reorganized under a court-appointed trustee and remains in operation throughout.  The business files a reorganization plan detailing how it plans to handle its debts.  Creditors get the opportunity to vote on the plan.  Should the court find that the plan is fair and equitable, the plan will be approved.  Reorganization plans provide for payments to be made to creditors over a period of time which may exceed twenty years.  This type of bankruptcy protection is fairly complex and not always successful.

Chapter 13 bankruptcy is also a form of reorganization bankruptcy, although it is usually reserved for consumers.  Sole proprietorships can also take advantage of this type of protection.  You file a repayment plan with the bankruptcy court setting out how you plan to repay your debts.  The amount you’ll be required to repay depends upon how much you earn, the amount of your liabilities, as well as the value of your assets.  In situations where your personal assets are involved with your business assets–such as with sole proprietorships–you may be better able to avoid losing your home if you file Chapter 13 bankruptcy rather than Chapter 7.

The first step to take if you think you may need to file for small business bankruptcy is to find a good, reputable bankruptcy attorney with a proven track record to consult with.  Many of them offer free consultations and can advise you on whether it’s a worthwhile course for you to pursue.

The Wall Street Journal ran a commentary by Alan Blinder today entitled, “The Economy has Hit bottom.”  He described the economic indicators which suggest once the recession does hit rock bottom, then, and only then, will it finally start climbing back.  In the meantime, small and big businesses continue to struggle with the recession and the decision to file bankruptcy.  CIT Group, one of the largest lenders for small and mid-sized businesses, has been struggling with the decision to file or not to file bankruptcy.  After being rejected for additional bailout funds, they have sought to restructure their debt obligations in order to avoid bankruptcy.  Even though they are struggling to avoid bankruptcy, many companies have emerged stronger and better from the bankruptcy process.  Some small business franchises have actually benefited from their parent company filing for bankruptcy.

One example is Cork and Olive, a small wine retail franchise chain located in Florida.  Owners of franchises had begun noticing issues with the parent company like not receiving requested inventory.  Eventually the parent company filed for bankruptcy.  At first the process was challenging because of public perceptions about bankruptcy and a slew of unanswered questions.    CNNMoney.com recommends that if you perceive that your franchisor is going towards liquidation then attempt to acquire the rights to the mark.  Richard Carlton, one of the owners of the Cork and Olive franchise, states that his store has actually become more profitable since the franchisor’s filing for bankruptcy.  He is able to make more decisions and implement changes with less franchisor oversight.  An added perk is that he no longer has to pay the monthly franchise fee.

Small businesses are feeling some of the tightest squeezing by this economy.  Companies, like CIT Group, that have historically helped small businesses are being forced to pull in the reigns on credit they previously allotted to small businesses.  When your franchisor files for bankruptcy, you don’t necessarily have to follow.  Regardless, your franchisor’s filing will have some type of affect on how you continue to operate.  Before you simply close up shop, get more information about your options and how restructuring debt can help you and your business.  Your financial situation may be such that it is better in the long run for you to also consider bankruptcy and restructuring.  More and more businesses, like Six Flags and Mrs. Fields, are using bankruptcy as a tool to emerge strong and more competitive to survive in this economy.  Deciding whether to file, is an important decision.  Contact a qualified bankruptcy attorney to explore all your options.  Bankruptcy doesn’t have to be rock bottom.  It can be a new beginning.

If you are planning to move sometime immediately following your bankruptcy, you may be faced with the question, “can I rent a place even though I just filed for bankruptcy?”  The good news is that, yes you can rent a place, but you can do a few things to make it a little easier.

In her book, Bounce Back From Bankruptcy, Paula Langguth Ryan gives the easiest way to find a place quickly.  “Your best bet when you’re ready to rent a new apartment or house is to find one that is for rent through a private landlord.  Your local classified ads will offer your best opportunity for finding people who want to rent out individual rental properties.  You can also ask friends who live in apartments for the name of the owner of their building.  That way, you have a good chance of approaching the owner directly.”

Ryan’s point is that if you are dealing with an individual as opposed to a corporation they will be more likely to work with you.  For instance, most corporation-owned apartment complexes have strict rules saying that they can’t rent to someone who has two bad accounts.  However, this shouldn’t be too much of a problem if you’ve worked to make sure credit report is updated.  Accounts that say “discharged under bankruptcy” aren’t bad, but accounts that show as late because they weren’t updated are bad.  You just need to make sure your credit report is fully up to date before approaching a leasing office or owner.

Also, show up prepared and be honest.  You don’t want to be caught off guard when the leasing agent runs your credit.  You want to know exactly what is on your report, and also bring a copy of your credit report if you have one.  It is important to be honest as well.  Many applications for leases ask about your bankruptcy history.  When someone runs your credit they will see the bankruptcy, so there isn’t a point in trying to hide it.

Anyway, don’t be afraid that you won’t be able to get a place after your bankruptcy.  You should just follow some of the steps that have been mentioned and you will be fine.  Don’t let any fears about bankruptcy keep you from getting a second chance with your financial life.  If you speak with a bankruptcy attorney they can show you how many of the fears people have are myths, and they will show you how easily you can bounce back from bankruptcy.  Call a bankruptcy attorney if you would like to find out more.

The unemployment rate is officially at 9.8%, just a couple points shy of the dreaded double digit unemployment.  This represents the highest unemployment rate since 1983.  With reports that the recession was ending soon, many had hoped to see better employment numbers.  However, the latest announcement punctuates the warnings of conservative economists that job recovery will lag behind economic recovery.  In the mean time, people have families to support and bills to pay.  In the fashion of true American ingenuity, many consumers are rising to the employment challenge with a new juggling routine.

According the Wall Street Journal, more people are taking on multiple part-time jobs and gigs to make up their lost wages.  Ken Hall, for example, took on several part-time positions and bartending on the side.  Handling one job can be stressful, but some are actually enjoying a new lifestyle that is absent the usual office politics.  Regardless, makings ends meat on your own is stressful and scary.  Despite their best efforts, some are still having difficulty making the mortgage and paying all the credit cards on time.  To cope, many are tapping every possible cash asset and savings source to make the minimum payments.  When you’re financially stressed and you feel you’re down to your last options, it is extremely tempting to take a slash and burn approach to debt resolution:  sell everything of value and deplete every other source of cash.  Essentially, do anything but file bankruptcy.

One of the worst pre-filing mistakes is not talking to a bankruptcy attorney.  If you have a large debt burden, talk to a qualified bankruptcy attorney who can explain the advantages and disadvantages of different debt management techniques.  They can help you head off problems before they backfire. Another major pre-filing mistake is liquidating the tools of your trade, especially in this economy.  Liquidation might make sense at first blush—pay everything off and then starting over.  But the question then becomes, what do you start over with.  With the slow rebound in the job market, you may be your best opportunity for employment.  If you liquidate your tools, you won’t have the items you need to make money.  Also, make sure that your bankruptcy attorney knows your profession and the tools that you need for that profession.  Your bankruptcy attorney can then work with you through the bankruptcy process to resolve your debt issues, improve your cash flow, and help you keep your trade tools.  Tools of the trade are protected during the bankruptcy process.  What is considered a “tool of the trade” depends on your occupation.  For example, a transcriptionist needs word processing equipment.  Mechanics need shop tools.  A promoter might need power point equipment.  Don’t be stuck in the mind set that “tools of the trade” only apply to certain occupations.  Protecting one of your last avenues of livelihood is an extremely important goal during the bankruptcy process, so don’t neglect identifying what items you need towards your occupation.

This is a rough economy.  Some analysts are dreading and predicting double digit unemployment by next year.  Fortunately, there are still options and opportunities available for you get back on your feet.  Contact a bankruptcy attorney in your area today to learn which type of bankruptcy is best for your financial situation.

According to a new study in Health Day News, more than half of the babies born since 2000 will live to be 100 years old if current trends continue.  Even though this is considered a “new” study, the information isn’t that startling.  Concerns about an increasing older population have floated around for several years.  The stress over accumulating retirement funds grows every year.  The recession hasn’t helped with this stress level.  More and more people are struggling with high credit card and medical debts, while still trying to tuck a few dollars away for retirement.  Even if you are only in your thirties or forties, planning for retirement should still be a priority, especially with more statistics regarding higher life expectancies.  It is taking Americans much longer to save and plan for retirement.

In addition to developing a basic savings plan to pay for retirement, a second major component to your retirement planning needs to be reduction of debt obligations so that you can eventually afford to retire.  If you have high debt balances from credit card debts or medical expenses, talk to a bankruptcy attorney before making drastic financial changes in your debt strategy.  Many people are tempted to pay off their credit card debts by tapping into their retirement funds.  Some people are even tempted to do the quit and get re-hired trick…. This is where they resign from their job, use the qualifying event to pull out all of their retirement savings from a 401K, and then get re-hired by the same employer, but with a loss of seniority and possibly benefits.  Using your retirement proceeds to pay debts is an unnecessary risk of your current benefits and future retirement.  Depending on where you are at in your retirement planning, you may not be able to recoup the savings that you accumulated through your retirement plan and the accompanying, accrued interest. Bankruptcy is a better option when you need to protect your future retirement and control current debt obligations.

Bankruptcy also helps keep aggressive creditors in check.  Do not be pressured by a collector that is harassing you and threatening to “garnish” your retirement funds.  Funds in 401K and similar retirement accounts are protected in bankruptcy.  This means that creditors cannot access these funds, unless you authorize them to do so.    Talk to a bankruptcy attorney first.  They can help you develop a bankruptcy plan where you can resolve your debt issues without sacrificing your retirement funds.