Many people have asked about the new Bankruptcy Law changes and how they would affect someone thinking about filing. The short answer: It will cost you more time and money in connection with the filing of a case, but that’s about it.

Here is a brief overview about Bankruptcy and the new law changes:

For the average consumer there are basically two types of Bankruptcies that are available to them. A Chapter 7 (straight Bankruptcy or referred to as a liquidation) and a Chapter 13 (often referred to as a reorganization). Below is a general overview and is not intended as legal advice. You should always consult with an attorney prior to making any type of legal decision. Filing for Bankruptcy is never pleasant and should always be considered as a last resort. Although your credit profile will be affected for 10 years, there are programs out there that are specifically designed to assist a post-discharged consumer with restoring and rebuilding his or her credit profile. Your attorney can discuss this as well as other options with you. Make sure they are in good standing with their Local Bar Association and shop around. Price isn’t as important as comfort in my opinion.

Chapter 7 bankruptcy is designed for …continue reading the article titled New Bankruptcy Law changes –

Read the entire article to understand why.

For over 8 years, congressional backers, banks and credit card companies pushed to get bankruptcy reform on the books. Who has this really helped?

Last year the new law went into effect. The pushers of this law said it was needed to help curb the massive abuse of people who filed for Chapter 7 bankruptcy as a way to simply walk away from their debt. Opponents said the changes would be especially hard on low-income working people, single mothers, minorities and the elderly and would remove a safety net for those who have lost their jobs or face mounting medical bills.

The law bars those with above-average income from Chapter 7 — where debts can be wiped out entirely — except under special circumstances. Those deemed by a new “means test” to have at least $100 a month left over after paying certain debts and expenses must file instead a 5-year repayment plan under the more restrictive Chapter 13.

In addition to this “means test”, an individual wishing to file for relief under Chapter 7 must first seek credit counseling services and receive a certificate of insolvency.

Basically, anyone seeking to file a Chapter 7 bankruptcy has to go to a credit counseling service that interviews the individual and conducts an analysis of their overall financial situation to determine if they truly can’t afford to pay back their debts.

As you well know, the credit counseling industry is funded by the credit card companies. How convenient. Fortunately, …continue reading the article titled If you find that you are in financial trouble, look at debt settlement as your first option.

A recent study by lawyers.com showed that nearly half of all Americans do not have enough in savings to live for three months if faced with an unexpected job loss or medical emergency.

For those people earning 35k or less, 19% of them said that they had no liquid savings, compared to only 4 percent of those who earned more than the 35k a year.

In addition, those who actually have some savings are increasingly more likely to spend it on daily living expenses, instead of paying down or eliminating their debts.

Of those people with savings, about 27% reported that their last savings withdrawal of $100 or more was to cover normal living expenses, while only 16% used it to pay off debt.

The survey shows that any change in gas prices, for example, or in any other market (an increase in interest rates from their adjustable mortgage, the new minimum credit card payment requirements with most credit card companies) can devastate those consumers financially.

If you find yourself scrambling to make ends meet or just want to learn more about your financial options, log onto www.debtreliefoptions.com.

Jon Noble
Staff writer
Debt Relief Options
asktheexperts@debtreliefoptions.com

In February, Maine became the twelfth State to pass legislation that allows consumers to freeze their credit information. This program has been floating under the radar for quite some time and I think that if more consumers were aware of it, they would be flocking in droves to sign up.

I know that I wrote eight States and reference Maine becoming the twelfth. There is a reason for this. But first, let me explain about the program. OK fine. For those of you that are impatient, 8 States allow any consumer to participate in freezing their account. The other 4 States and potentially on a National level, you must be a victim of identity theft before you can protect yourself in the future.

California was the first State to pass this type of law back in 2003. The vast majority of Californians have not signed on because they don’t know about it.

Here is the reason behind the law and how it works:

Nearly 10 million Americans fall victim each year to identity theft. Current statistics show that a victim will spend an average of 330 hours resolving problems as a result of identity theft and paid between $851 and $1378 in out of pocket expenses (excluding a median of $4000 per victim in lost wages in 2004).

Identity theft also costs U.S. …continue reading the article titled Freeze your credit, well in eight States anyway…….

Dear Mr. Smith, thank you for your response to my offer. You are approved and here is your money! Oh yah, here is what you agreed to by accepting such a generous offer made by me and my distinguished associates.

1. You can’t sue me or be included in any class action law suit against me.

2. If you miss a payment to someone else that you owe money to, even if you’ve made all of your payments to me on time, I can charge you a higher interest rate for that.

3. I can change the terms of our agreement, anytime that I want to.

4. If you pay back all the money that you owe me, I can charge you an additional fee for that.

5. If you pay me back and you continue to not owe me money anymore, I can charge you a fee for that.

Being a “Shylock” with these terms and conditions….Illegal

Being a Credit Card company with these terms and conditions and having Congress in your back pocket….Priceless

Plain and simple. Over the past 15 years that I have been in the debt and credit industry, I have read countless articles and have met with thousands of people effected by the credit card industry that I am litterally sick and tired it. The credit card industry has been set up to take advantage of uneducated people who have been barraged day after day with ads and offers telling them that without credit, they can’t live like they should be. “Life takes Visa. You live life, we’ll help you” or some moronic statement like that I keep seeing while watching this year’s Olympics. Actually, I get to watch about 10 minutes of Olympic coverage and get to spend the next 5 minutes watching stupid pitches like this.

In this article, I am going to go over some real facts that are in these credit card company contracts and hopefully someone out there will see that this is one of the most underhanded, unregulated, profit mongering businesses out there today.

Here is some “did you know” that hopefully get’s you as angry as I am. Now on a positive note, so we don’t hurt some people’s feelings out there, credit cards are a tool that if used correctly can give you some advantages. Yah, about 5% of the American population falls into that category.

1. Chase Manhattan Bank’s cardholder agreement plainly and clearly makes you agree to give up your right to sue them: “the cardholder cannot take the issuer to court or be included in a class-action suit against the company.”

Wow, the tobacco companies should have had these lawyers on their team…Hmm, let’s see. Sorry Mr. Jones, it clearly states on the underside of the cigarette pack that you purchased, in size 3 font: “By purchasing these cigarettes, you agree that you cannot take the manufacturer of these cigarettes to court or be included in a class-action suit against the company.” I guess that was their big mistake. The warning label only states that you could die, it didn’t say anything about not being able to sue them….

2. Banks and credit card issuers spent millions, yes millions, of dollars lobbying Congress …continue reading the article titled Credit Card Companies are “Shylocks”

Consumer Credit Counseling companies are not always what they advertise to be. Be sure to check out the company and all of your options before enrolling into any type of Credit Counseling Service.

A Massachusetts credit counseling agency and its two owners must pay $4.2 million in penalties and consumer restitution to settle allegations that it misled thousands of consumers and funneled millions of dollars to related for-profit companies.

The consent judgment resolves a lawsuit filed by Massachusetts Attorney General Tom Reilly in April 2004. The suit charged that owners John and Richard Puccio violated Massachusetts charities laws by using Cambridge Credit Counseling to funnel millions of dollars to for-profit companies that they also owned.

The state also alleges that the company violated consumer protection laws by misleading thousands of consumers about the benefits of credit counseling offered by Cambridge Credit.

Under the consent judgment, both Cambridge Credit and the Puccio brothers will pay civil penalties and restitution to consumers.
The Puccios will pay a total of $2 million to the Commonwealth - including a $500,000 civil penalty, $500,000 restitution to consumers, and an additional $1 million in disgorgement of ill gotten gains from the charity.

Cambridge will pay $2.2 million — a $500,000 civil penalty and $1.7 million in restitution to consumers. The Puccios also are permanently barred from working with Cambridge, contracting with the charity, or receiving any money from the charity.

“What is clear is that the owners set up this charity primarily to enrich themselves …continue reading the article titled Non-For-Profit, not always the case

WASHINGTON — The Internal Revenue Service issued the 2006 “Dirty Dozen” — its latest annual tally of some of the most notorious tax scams — along with an alert to taxpayers this filing season to watch out for schemes that promise to reduce or eliminate taxes.

Two new schemes have worked their way onto the list in 2006. In recent months IRS personnel have noted the emergence of the two scams — “zero wages” and “Form 843 tax abatement” — in which filers use IRS forms to claim that their tax bills have been wrongly inflated.

Also high on the list in 2006 is “phishing,” a favorite ploy of identity thieves. Over the past few years, the IRS has observed criminals working through the Internet, posing even as representatives of the IRS itself, with the goal of tricking unsuspecting taxpayers into revealing private information that can be used to steal from their financial accounts
Several of the usual suspects from last year remain on the list. The IRS, for example, continues to see schemes designed to exploit charitable organizations. Some taxpayers, meanwhile, still use frivolous arguments to claim they do not owe taxes, despite the fact such reasoning has been thrown out of court time and again.

“When it comes to taxes, everyone has to pay their fair share,” IRS Commissioner Mark W. Everson said. “I urge taxpayers not to be taken in by hucksters who promise to lower or eliminate taxes. Getting caught up in the Dirty Dozen or similar schemes can lead to big headaches.”

Namely, involvement with tax schemes can lead to imprisonment and fines. The IRS pursues and shuts down promoters of these and numerous other scams. Anyone pulled into these schemes can also face repayment of taxes plus interest and penalties.

The IRS urges people to avoid these common schemes: …continue reading the article titled IRS - Releases 2006 “Dirty Dozen”

Being deep in debt seems to have all too many people chained to jobs they don’t want to be at. This is a question from one of my readers in that situation.

Q. I’m currently at a crossroad in my life. I have a full time job that I’m not happy at and I feel like I don’t have enough time to spend with my family. The problem is that I don’t see a way out as I have a lot of debt that needs to be paid off. I’d like to create an internet business for myself that will allow me to have more time with my family, help pay off my debts and create more financial freedom in my life. How can I create more confidence to be able to do this?

A. This is a challenge that seems to be on the minds of many. I have been asked this question numerous times by people who are either facing downsizing in their current position or simply wanting to create an additional source of income. The first and most important step is to get clear on your current financial situation so that you can develop an action plan. Often, when you feel “stuck” and unable to see the forest through the trees, it’s easy to lose perspective on what’s real. In order to gain clarity, you will need to list not only your total debts owing but the money you’ve got coming in as well as going out each month. This will allow you to see your numbers in black and white so you can determine if there’s any room to restructure your current financial situation. It’s when we don’t write the numbers down that it’s easy to get vague about how much money we actually have or don’t have available to us. With regards to your debts, if you haven’t already, you will need to put a debt elimination plan in place. Depending on the amount of debt you’re carrying and whether you are behind in payments, there are a number of debt relief options to consider. These include debt consolidation loans (mortgage refinance, home equity line of credit or unsecured personal loan), consumer credit counseling and debt settlement. If you are experiencing difficulty in staying current with your debt repayments, you can research these options to see which one would be the best fit.
With regards to starting an internet business, you need to ask yourself the following questions:
• What interest or hobby do I want to turn into a business?
• What kind of need is there for the product or service I want to offer?
• What are my skills for starting such a business?
• Who do I know that can help me launch this business?
• How much will it cost me to start and run this internet business?
• How much additional income do I think I can generate?
• Will this provide me with the freedom to spend more time with my family?

As you can well imagine, starting a new business will consume your time, energy and resources, especially up front. However, the rewards can be many and if it will allow you to spend more quality time with your family and allow you to perhaps enjoy your current job more, it may well be worth your efforts!

DON’T let the buden of overwhelming debt keep you from doing what you want to do in life - it’s just not worth it. If you have debt you know you need and want to get rid of, it’s time to look at your options on how to get this done. Go to www.debtreliefoptions .com to find out what’s available to you.

Be sure to email me your questions on getting out of debt and building great credit at coach@debtfreediva.com

Knowledge is power and it’s important that you have all the facts so you can make educated decisions around your finances!

Dee Dee Sung
Founder, Debt Free Divas, Inc.
From Self Worth to Net Worth
www.debtfreediva.com

coach@debtfreediva.com

Over the next several publications, I am going to take a look at some of the most common misconceptions about credit and debt. Hope it helps….

The amount of money you make determines how good your credit is: False

An impressive salary doesn’t translate into a good credit report or good credit score. It’s true that a lender will look at the amount of money you make to determine your ability to make your monthly payments on the loan but, that’s as far as it goes.

Your credit worthiness is based upon your credit history, not your salary. Creditors use a FICO score to determine if you are qualified to get a loan, and at what interest rate that loan needs to be paid back at.

FICO scores range from 400 to 850 points. The higher your score, …continue reading the article titled Demystifying the Myths about credit:

It’s that time of year again; soon you will have many sources popping up suggesting ways to spend your upcoming tax refund. Let’s put this in perspective.

First, tax refunds are not “found” money, but a return of money YOU overpaid into the tax system! The average refund check is somewhere around $2,200 and $2,400.

One of the first things that you should do, if you had no abnormal deductions for the year and anticipate that those deductions will remain the same in the future, is to change your withholdings so you don’t overpay in 2006. I have no idea why you would want to give someone (even the government) money to hold onto for a year with no interest being made off of that money.

An easy way to calculate this adjustment is to take your refund amount, divide it by twelve and adjust your withholdings accordingly. Your company’s payroll department can assist you in this process. By doing this, it could give you several hundred dollars …continue reading the article titled Tax refunds a good way to get out of debt