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'No Scrubs' singer has no luck with recent Chapter 13 filing

2012-02-18T15:00:00Z

A Chapter 13 bankruptcy repayment plan can be tossed out by a judge if the person filing for protection fails to live up to their agreed upon schedule of payments. Celebrity singer T-Boz encountered this situation when her second Chapter 13 bankruptcy plan was tossed out by a judge.

Her bankruptcy case trustee requested this strong court action following apparently blatant moves by the singer to avoid making payments, not filing financial paperwork or attending required creditor meetings and not meeting other stipulations of her protection effort. The judge agreed, and now it looks like T-Boz will have to find another way to deal with her financial struggles.

]]> This dismissal of bankruptcy filing by the court means the celebrity no longer benefits from protection of assets or cessation of collection efforts by creditors under Chapter 13 bankruptcy laws. The court findings stated that the singer willfully failed to live up to her bankruptcy agreements. She also was barred from filing any new Chapter 13 bankruptcy for the next 180 days.

When a client works out a detailed financial repayment plan with their bankruptcy attorney under Chapter 13 rules, it is essential that each and every point be adhered to by the filer. Failure to meet any or all of the stipulations in a case can jeopardize the entire deal. Failing to do this multiple times is an affront to the court system and punishment generally means throwing out the bankruptcy protection.

Under a Chapter 13 bankruptcy, the debtor receives protection from harassment by creditors and seizure of contested assets. They work with their bankruptcy attorney to create a management debt repayment plan. It is of the utmost importance that the debtor meets all requirements of their Chapter 13 bankruptcy plan in order to benefit from the protection in the long run.

Source

The Wall Street Journal: "Judge Scrubs T-Boz's Bankruptcy," Jacqueline Palank, Feb. 13, 2012

What can Florida job applicants with credit blemishes do?

2012-02-17T19:28:11Z

In our last post, we discussed new laws on the books in several states that bar employers from checking the credit of prospective employees before making a job offer. Florida lawmakers are currently considering several different proposals that would also ban Florida employers from screening job applicants based on credit history and unemployment status.

But for now, Florida hiring managers can still ask permission from job seekers to review their credit histories. According to a recent report in the Sun Sentinel, many employers said that an outstanding judgment against an applicant, an account in collections, a bankruptcy or even a home foreclosure could prevent them from making a job offer.

]]> Human Resources executives say they are caught up with the times, though. They said they frequently discounted a blemish on a credit report when the situation was outside of the job seeker's control. And credit check screening may not be as widespread as many consumer advocates guess. Only about half of all hiring managers for positions in the financial services industry run credit checks on prospective employees. And only about one in six hiring managers runs credit checks for all job applicants.

Regardless, when you know that your credit history has suffered during the severe economic circumstances, you don't want to have one more hurdle to face when you're already facing an extremely competitive hiring market for job seekers. So what can you do if you are job-seeking with a bankruptcy, an account in collections, a home foreclosure or other credit issue in your recent past?

Executives from companies that complete credit background checks for employers advise job seekers not to focus on the credit score. Instead, check all three credit reports for mistakes and get the mistakes corrected immediately. If your credit report reveals some problems, like a pattern of not paying bills, you should go directly to the source -- the credit reporting agencies -- and indicate how you will pay bills in the future when you have income. Should you reach an agreement with a creditor to satisfy an outstanding debt, make sure that you ask each credit reporting agency to show the debt as satisfied on your credit report.

Experts disagree on whether to voluntarily disclose credit issues to prospective employers.

If the Florida Legislature enacts a law that bans employers from screening job applicants for credit issues, Florida job seekers will be able to breathe a little easier. Until then, job applicants may want to aggressively address debt issues revealed on their credit reports.

Source

SunSentinel.com, "How to handle a credit problem as a job seeker," Marcia Heroux Pounds, Feb. 10, 2012

New laws ban credit checks to help job applicants

2012-02-13T18:15:06Z

California became the seventh state in the union to ban credit checks on job seekers. For job applicants with bad credit scores, the credit checks have become the bar they cannot jump over in their pursuit of a new position. Many employers have stepped up credit checks on prospective hires in recent years. Formerly, credit checks were usually reserved for job applicants in positions of trust such as financial services or perhaps for company executives. But in recent years, employers in many other industries have begun screening job seekers using their credit history.

According to a recent report in the Sun Sentinel, two of every three employers admitted that they would be influenced in their hiring decision by a creditor lawsuit or outstanding judgment against an applicant. Other red flags in a job seeker's credit history, from order of most to least likely to influence a job offer, include an account sent to collections, a bankruptcy, high debt-to-income ratio and a home foreclosure. Back taxes, large school loans or medical debt occasionally affected a hiring decision.

]]> SmartMoney.com reports that employers may feel somewhat justified in screening prospective employees with issues such as credit card debt in their past. According to a 2008 study, employees who admitted to credit issues also were slightly more likely to exhibit similar behavior on the job such as theft, accepting bribes or other breaches of financial trust.

But consumer advocates argue that the credit check litmus test has lost its reliability. Since the recession began in 2008, millions of job seekers have suffered financial setbacks that had nothing to do with their financial actions, including job loss or medical catastrophes leading to missed bill payments, home foreclosure and bankruptcy.

Several employment-related bills were recently introduced in the Florida Legislature in 2012. Several competing proposals have been introduced in both houses that -- similar to California's new law and those of other states -- would ban employers from considering credit history while making a hiring decision. On a related note, bills have also been introduced to ban employers from considering a prospective hire's unemployed status in the hiring decision.

Given the fundamental shifts in the national economy and Florida's economic landscape in particular, these bills seem to be grounded in fundamental fairness and an understanding of exactly what Florida job applicants have been through during the recession. In our next post, we will talk about what Florida job seekers with credit blemishes can do to aid their job searches.

Source

SmartMoney.com, "Hire Hopes for Job Seekers With Dodgy Credit?," Annamaria Andriotis, Feb. 3, 2012

New year-end report: Orlando foreclosures down in 2011

2012-02-11T16:02:27Z

A new report from RealtyTrac Inc. shows that foreclosures in the Orlando area were down in 2011 for the third year in a row. Compared to 2010, when foreclosures were filed on 61,674 homes, Osceola, Orange, Lake and Seminole counties saw approximately 68 percent fewer foreclosure filings in 2011. There was a 72 percent drop in foreclosures from the 72,141 filed in 2009.

Although home foreclosure numbers were down for 2011, many Orlando residents are still deep in the grips of the housing crisis. One in every 46 homes in the Orlando area was subject to a foreclosure filing last year -- all told, 19,844 residences.

]]> Orlando did fare reasonably well compared to state and national averages for foreclosure filings. Among the nation's largest metropolitan areas, Orlando ranked 38th for foreclosure filings in 2011. Orlando homeowners had a somewhat better footing than other Floridians: foreclosure filings for the state as a whole dropped 62.5 percent, almost ten full percentage points lower than Orlando numbers. Nationally, foreclosures dropped off by 34 percent, reaching their lowest levels since 2007. Just shy of two million American homes were subject to a foreclosure in 2011.

It is good news for Orlando residents that the area saw such a steep decline in foreclosures, evidence of a slow but significant economic recovery. Yet, thousands of homeowners are still struggling to make payments and searching for a financial solution. Hopefully, they will continue to get the help they need, and 2012 will prove to be an even better year in terms of keeping Floridians in their homes.

Source

Orlando Business Journal, "Orlando foreclosures fall nearly 68% in 2011," Jan. 12, 2012

How are your financial resolutions going?

2012-02-09T18:19:55Z

It's been a month since you made the resolution to reduce your debt and improve your finances, but you should be careful so you don't put yourself into a situation where you could become worse off and have to file for bankruptcy.

Families seem to get into trouble when they think their situation can be done with a quick fix. While on the surface, it may help your situation temporarily, in the long run, it could hurt you. Making the decision to improve your finances is not easy. It takes discipline, determination and hard work.

]]> To help you continue to improve your financial outlook you should consider the following:

Work from a detailed budget.
Find areas where you can cut more spending and put that money towards an unpaid bill.
Once you have paid off a credit card, keep the account open, but don't charge it up again.
Beware of short-term loans. According to the Consumer Federation of America, you could pay triple digit interest rates, and still struggle to pay back the loan, putting yourself at risk of falling more behind.
Considering taking on a second job to help pay down those debts.
If you need to borrow money, consider borrowing from family or a friend.
It might be tempting to apply for a new line of credit, but don't do it. It will only increase your debt over time and you may not be able to afford the monthly payments long-term.
If you are struggling with monthly credit card payments, call the credit card company and work out a payback program. In some instances, they may be able to reduce your interest rate, eliminate fees or postpone your payment due dates.

If you find yourself in the situation that bankruptcy may be your only alternative, your best bet is to speak to a qualified bankruptcy attorney. They can help you figure out what your options are and layout a plan that will best fit your needs. You could give yourself a fresh start by filing for bankruptcy, but you still need to follow a disciplined approach when it comes to your finances so that you can continue to rebuild a healthy financial future.

Source: Fox Business, "5 financial Band-Aids that can make the bleeding worse," Doresa Banning, Jan. 29, 2012

Very educated = very poor

2012-02-07T17:27:52Z

Did you know that law students are borrowing approximately $106,000 for private schools or $70,000 for public schools? Furthermore, all of this is occurring at a time when there are practically no legal jobs. Many Florida residents understand that the economy is steadily rising; nevertheless, people continue to suffer from the terrible job market. A recent story discusses the financial woes of a Maryland law graduate. She has recently filed for liquidation.

Right before her law school graduation, the law student realized that she was burdened with $150,000 in student debt. With no job prospects on the horizon, she decided to file for Chapter 7 personal bankruptcy. Filing Chapter 7 bankruptcy allows individuals to discharge debts such as credit card bills, lawsuit judgments and medical debts. Like many recent law graduates, this woman thought it would be easier to obtain a job. However, the former student currently lives with her mother as she scraps for sporadic contract positions.

]]> Unfortunately, this new lawyer found out that federal law prohibits courts from discharging student-loan debt. There is an exception in situations where repayment would be an "undue hardship." Nevertheless, this is a very difficult legal standard to fulfill.

While there are no statistics that report exactly how many law students are declaring bankruptcy, sources say that the average law-school debt has increased 50 percent between 2001 and 2010. Additionally, the debt is now exceeding a graduate's typical earning potential.

While a recent study suggests that consumer bankruptcies were actually down by 11 percent in 2011, student-loan default rates show that law graduates have not benefited from the trend. Also, filings increased among college graduates by 20 percent between 2005 and 2010.

As one can see, the recent economy has hampered a lot of students. In the face of such a serious financial crisis, many people are opting for bankruptcy. If you are considering liquidation as a debt-reducing remedy, you may want to speak to an attorney about the various filing possibilities.

Source: Reuters, "Law grads go to court for bankruptcy protection," Leigh Jones and Moira Herbst, Feb. 3, 2012

Breaking an addiction to credit cards is possible

2012-02-03T15:00:00Z

Credit card use can easily slip into the category of an addiction. Credit accounts can be an "easy way out" for some consumers, but the time to pay the piper always arrives. Ask any bankruptcy attorney about credit card debt, and they will likely tell you that credit card debt is one of the top causes of personal bankruptcies, with medical bills often leading the pack of bills owed by consumers.

One problem that occurs with credit card debt is the insidious way that the total amount owed can creep up to a rather staggering amount. This can happen over a few months or years, as the debtor continues to charge while only paying the monthly minimum amounts due.

]]> Habitual use of credit cards for everyday expenses, food, dining out, games and other expenses that should be paid for in cash causes balances to accumulate quickly. The spender often does not keep track of their expenses and has no clue how much they owe overall. Keeping track of spending is an essential task for breaking credit card addiction. Vowing to pay cash or forget it is another good tactic to use when trying to stop the debt train.

There are many great suggestions for breaking an addiction to credit cards. A basic change in behavior is called for, along with reduced expectations and altering attitudes about desirable lifestyles. Being debt free is an excellent goal. Some consumers have to turn to bankruptcy in order to get a fresh start. This is not a bad thing; it can be the drastic measure that finally does break this damaging cycle of excessive debt.

If you have unmanageable credit card debts, it is wise to consult with a bankruptcy attorney to review your situation and find an acceptable solution. Do not delay. Stop charging and call your lawyer today.

Source

MSN Money: "How to break addiction to credit cards," Jan. 26, 2012

Orlando bankruptcy filings fall in 2011, but problems remain

2012-02-02T15:55:07Z

Residents of central Florida have endured a rough stretch of years recently. The housing bust hit the state particularly hard, leaving many mortgages underwater and many people out of a job or on a reduced income. From 2007 to 2010, central Florida saw an annual increase in the number of bankruptcy filings. But 2011 reversed that trend. Through the first 11 months of last year, there was a 16 percent decrease in bankruptcy filings compared to 2010. This result mirrors a national downward trend in bankruptcies.

These numbers may offer hope of a recovery that economists have seemingly promised for years. But experts caution that a one-year decrease in bankruptcy filings does not necessarily indicate that the financial picture for many Floridians is getting any rosier. Experts say that they have seen an increase in the efforts people have made to pay down credit card debt. Unfortunately, many people have resorted to exhausting their savings and 401(k) plans in order to pay down debt. When that cash runs out, times can get tough.

]]> The reality is that many people are still facing trouble paying their debts, whether a mortgage, an automobile loan, or credit card bills. The prospect of facing home foreclosure or repossession of goods can be an extremely stressful experience.

Bankruptcy can offer consumers in serious debt trouble the opportunity for a fresh start. The two relevant chapters for consumers are Chapter 7 and Chapter 13. Each provides a different solution to debt issues, but you have to pass certain tests to enter one or the other. The bankruptcy process is full of rules, and since consumers are often concerned about how those rules will affect their home, car, and other possessions, the advice of an experienced attorney is essential.

Source: Orlando Sentinel, "Orlando-area bankruptcies on pace to dip for 1st time in 5 years," Richard Burnett, Dec. 15, 2011.

Potential government deal to settle unfair mortgage foreclosures

2012-01-27T18:04:16Z

Losing your home is a heart-breaking situation with many repercussions for the homeowner. When taken by surprise because a mortgage loan is sold off to another lender without notification of the homeowner, it causes an unfair advantage to the lender. A homeowner who is already in arrears on mortgage payments could become a home foreclosure target just because they do not know where to send their payment.

Most foreclosure situations are more drastic than this scenario, but the unfairness of deceptive home foreclosure practices has caused evictions, home sales, and other damages to homeowners, according to government officials. A measure to halt this trend has finally come to light, as five of the largest mortgage lenders have made an agreement to stop this practice.

]]> Major banks included in this agreement are Citibank, Wells Fargo, Bank of America, JPMorgan Chase and Ally Financial. This settlement applies to private mortgages made between 2008 and 2011, but not government-controlled home loans. Deceptive practices include "robo-signing" of documents, failure to verify information, and signing off foreclosures with fake signatures.

The settlement agreement was made between those lenders and U.S. States, resulting in a sizeable deal that will eventually amount to billions of dollars in benefits to affected homeowners. Up to $25 billion could be returned to Americans in this deal. Approximately three-quarters of a million homeowners will receive checks of $1,800 each under this deal.

Another 750,000 Americans will also be affected by having restructured loans and reduced mortgages. Those who have already lost their residences to home foreclosure actions will benefit less or not at all from this deal. If you are having a foreclosure dilemma, contact your attorney to determine if you might be included in this relief effort.

Source

USA Today: "States review $25B mortgage settlement offer," Derek Kravitz, Jan. 24, 2012

There is hope for improving credit scores after divorce

2012-01-26T15:41:20Z

Credit card debt and other money problems are prime factors leading to many divorces as spouses struggle financially in a poor economy. Some couples turn to bankruptcy as a solution to their money problems. But that can be a daunting step that leaves people with a low credit score after a divorce, when finding financial stability feels extremely important.

The financial situation following a divorce may be even more crushing to individuals than debt problems were during their marriage. Even without bankruptcy, exes will often discover that their former spouse put them in extreme debt and failed to pay bills on time. Or someone will have a low credit score simply because she never has opened her own line of credit. These are all reasons why it can be important to focus on one's credit score after divorce.

]]> Despite all obstacles, remember that credit scores that are already harmfully low can be improved before, during and after divorce. Fox Business shares some tips for the newly single about how to improve their credit rating.

To get those credit scores into an improved state, it is essential to look at and understand the entire financial picture. You may have to contact debt collectors and work with creditors to solve difficult financial stresses that cause a low credit score. By using the help of a bankruptcy attorney, ex-spouses can often work out good arrangements with their creditors and avoid the continued stress of excessive debt.

Divorce can accelerate low scores, especially if angry spouses refuse to pay bills in a timely manner. Ultimately, this can hurt both divorced parties' credit scores because marital debt continues to be shared on credit reports. If your spouse exhibits negative behavior like this, you should not continue to share any joint accounts or financial obligations with him.

These are just a couple of tips related to credit scores and divorce. To find out more, visit Fox Business or contact a divorce attorney and/or financial professional with experience in this important matter.

Source

Fox Business: "Square One: How to Build Credit After Divorce," Lynette Khalfani-Cox, Jan. 25, 2012

Justice for wrongful foreclosures is put on hold

2012-01-20T17:02:37Z

Was your house foreclosed in error? Regulators ordered hundreds of thousands of mortgage foreclosures to be reviewed for errors, so many that the backlog is now more than several months.

The delay insults injured parties for a second time, who are waiting to receive potential damages from aggressive home foreclosure tactics. Many Florida homeowners have been fighting in the past few years to correct this injustice that cost them their homes.

]]> Florida law uses a judicial foreclosure procedure which means a lender must take the documents to the court to be reviewed. If the lender's claim is found to be correct, the court allows the foreclosure. However, errors have occurred in mass quantity. And redemption is the goal.

The bank consultants responsible for reviewing possible wrongful foreclosures were initially supposed to have completed the awaited reviews by this month. But they explain the cases are more complex than originally thought, and the reviews may not be done until the end of the year.

People who have been waiting for months, facing many more months of waiting now, and seeing potentially four million more reviews on the horizon, are not in the mood to wait. Or maybe cynicism has set in and they are becoming numb to the never-ending trouble that is the foreclosure crisis.

The good news is that the foreclosure rate reportedly has slowed down as a result of reviews. Fewer families are losing their homes because of the faltering housing market and economy in general. Banks have decided to take a more cautious approach to foreclosure.

Source

USA Today: "Foreclosure reviews to take longer than expected," Julie Schmidt, Jan. 13, 2012

From 'Show me the money,' to 'Show me a fresh start!'

2012-01-20T01:26:51Z

Chapter 7 bankruptcy: it can be a chilling idea to those hesitant to ask for help. Some high profile people choose this path to redemption when their lives, and then finances, spin out of control.

Recently, a very successful sports management figure (the man who reportedly inspired the character from "Jerry Maguire") declared bankruptcy after years of fighting alcoholism and the business debts that his addiction contributed to. His cautionary tale teaches two lessons: focus on the important when things are going well and find a way to amend the costly errors.

]]> After years of trying to resolve legal and financial issues, Steinberg decided to ask the courts to help sort out the mess. Bankruptcy is the legal pathway to cleaning up or restructuring your personal finances. The process considers all debts and claims against all assets and income, and then settles out the accounts in an equitable decision.

Bruised pride and disappointments may linger, but economic and business issues resolve more quickly than they would otherwise through bankruptcy court. Steinberg wants to move on with his life and begin making up for the past.

The common financial advice makes perfect sense. Work a job, pay your bills, save some money, put away for retirement, etc. But sometimes we just don't have control of events or what might ail us. When the unexpected or tragic hits, we may find our reputation sullied and a financial disaster thrust upon us.

Bankruptcy is a chilling term, yes, but it's also method to redeem our economic lives and repair our reputations.

Source

The Associated Press: "Sports agent Leigh Steinberg files for bankruptcy," Bernie Wilson, Jan. 12, 2012

Foreclosed houses may soon be up for rent

2012-01-16T18:40:43Z

In case you haven't heard, renting is the new buying. With more and more houses being lost to foreclosure, fewer Americans capable of qualifying for new mortgages and many who do may be wary of investing in a new home that might be difficult to sell down the road.

With foreclosure rates staying high, and many of those homes sitting empty, the Obama administration, Fannie Mae and Freddie Mac are reportedly hoping for a different solution. The new program allows management companies to buy large quantities of homes that have been foreclosed upon and rent them out.

]]> In many ways this program mimics multi-family rentals, such as apartments, that are commonly run by large management companies. However, owning several houses poses various differences versus having the same number of homes located in closer proximity of one another.

With the uncertain economy, there are many people who hesitate to put down the firm roots that come with home ownership, but many have not given up their dream of living in a house. Rental contracts under this program may allow more families to be able to raise their families in a house, and give those who have already faced foreclosure the opportunity to continue to live in a house, rather than downsizing into an apartment.

The other hope for the program is that overall, housing prices would begin to stabilize. With fewer homes sitting vacant, home prices could start to creep back up, which is good news for homeowners who long for their own home values to increase as well. Of course, how well the program actually works can only be determined once it has had a chance to be around for a while.

Source

cnbc.com: "White House wants to convert foreclosed houses to rentals," Diana Olick, Jan. 9. 2012

Consumer credit numbers bode well for U.S. economy

2012-01-13T03:08:56Z

U.S. residents may be saddled with too much credit card debt, but the way they are spending money today, you wouldn't know it.

According to recent financial reports, outstanding U.S. consumer credit rose by $20.37 billion during November of 2011. That's the biggest gain in a month since way back in November of 2001, according to a Reuters story.

]]> The Federal Reserve reports that revolving credit, which mostly measures consumers' credit-card use, rose $5.6 billion in November. This marks the third consecutive month in which revolving credit rose.

Reuters quotes an economist who says that credit growth is a positive sign for the economy. This potentially makes sense. Consumers spend more when they are more confident. They are more confident when they feel that the economy is improving.

And the U.S. economy depends upon confident consumers. When consumers spend more, the nation's economy thrives. When they're too nervous to open their wallets, the U.S. economy suffers, as it has in recent years.

The credit numbers are the second bit of possible good news that the U.S. economy has recently received. The country's unemployment rate recently fell to 8.5 percent, the lowest that figure has been at in three years.

Unfortunately, the economy isn't robust yet. There is still a long way to go before a full recovery. But the news regarding credit-card use and unemployment could mean that we are in the midst of a steady, if slow, recovery.

It is important to note, however, that there is a danger that comes with credit card use. Hopefully, consumers are not relying more heavily on credit in irresponsible ways or out of desperation. It will take future research on debt levels to verify whether the recent credit trend is positive or a step backwards.

Source

Reuters: "Consumer credit surges by most since 2001," Jason Lange, Jan. 9, 2012

Creditors going too far in debt collection efforts, part 2

2012-01-07T20:33:00Z

In our last post, we explored some of the forms of creditor harassment that some people have had to face and many collectors have been forced to dish out. Many of the practices are illegal, and there is one major reason why creditors engage in harassing behavior. Desperation.

So how does this desperation get so bad that it leads so many into creditor harassment? Selling debts. Consumers' debts will be sold to various parties at various times. Chances are, if someone keeps calling you about the credit card that was closed three years ago it isn't the bank that issued it.

]]> With large amounts of accounts, and continued efforts to make more, most original creditors will only spend a small amount of time and resources into doing their own collections. Once they feel their own efforts aren't worth it, they will sell the debt.

A typical transaction may be $1 million dollars of debt for $50,000. The more of that debt they collect the bigger profit they make. Often, if the buyers find collecting too challenging they sell the debt again. The bill collector that winds up calling you might be four times removed from the original debt. These buyers assume they can recover a certain amount, and when they can't, they resort to creditor harassment. And the more times that bill changes hands, the worse and more confusing things can get.

Ironically, the more severe the creditor harassment is the more power that a consumer can have. When collectors start hitting below the belt, chances are they are desperate enough to negotiate a lower payment. Getting names, callback numbers and even times when you can assure you can talk to the same person about settling the debt can prompt a more civilized exchange and help get creditors off your back once and for all.

Of course, it is the responsible thing to do to discuss decisions regarding debt and creditor harassment with an attorney who specializes in that field.

Source

Newsweek, The Daily Beast: "America's Abusive Debt Collectors," Gary Rivlin, Jan. 1, 2012