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Your credit report is one of the most important documents out there. As a financial resume of sorts, you should take care to watch it closely.
It drives me nuts when I find out my client hasn’t taken a look at his credit report for … well, in so long he can’t even remember when the last time was that he saw his credit report.
After all, this is a document that amounts to a financial resume – where you’ve been, how you’ve paid back debts, and what you’ve been doing with your life for the past decade or better.
It’s like getting your bills every month and shoving them into the sock drawer. All of your bills. For a decade.
Probably not a good idea. Here’s why.
Your Credit Report Could Uncover Identity Theft
When you look at your credit report, you can make sure there aren’t any questionable accounts listed.
If there’s an account you don’t recognize, you may be the victim of identity theft. Monitoring your accounts to be sure that there isn’t anyone playing fast-and-loose with your credit history is always a good idea.
Nip Credit Report Errors In the Bud
About 40 million Americans have errors on their credit reports, according to a 2013 study.
Mistakes happen – it’s a fact of life. When it comes to credit report errors that may be a bad account, an incorrect address, or even a wrong employer.
Getting those mistakes fixed can be easy or difficult depending on the nature of the mistake, but one thing’s for sure – you can’t take corrective measures if you don’t know about the issue.
Know Before You Apply
You never know when you’re going to need your credit report. Not only do potential creditors check your credit, so do employers, insurance companies and a landlords.
Checking your credit report gives you a window into what those folks are going to see. If there’s a problem, better to know in advance so you can take steps to explain the issue and get it resolved quickly.
How Often To Check Your Credit Reports
Under federal law, you can get a free credit report from each of the three nationwide credit reporting companies (Equifax, Experian and TransUnion) once every 12 months.
It’s your choice whether to get the reports all at once or one at a time, and different folks have different opinions on which way to go.
Some people say that you should get one credit report from each of the major bureaus every four months. In doing so, you can monitor your credit file at no cost more frequently throughout the year.
I usually get my own free credit reports once a year from all three bureaus because it’s easier to sit down and handle any errors all at once. I don’t need to think about sitting down every four months to worry about my credit.
Whichever way you handle the free reports, I recommend that you get the free ones whenever possible. You should also get your credit reports from all three major bureaus (and pay for them) whenever you:
- are looking for a new job;
- are looking for a new place to rent;
- are considering getting a new mortgage (purchase or refinance);
- get a strange phone call about an unpaid debt; or
- are thinking about a new car.
Keep your records clear, double-check for errors, and you’ll be less likely to suffer from needlessly difficult times in the future.
Image credit: AlphaTangoBravo / Adam Baker
Why Check Your Credit Report (And How Often) was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Many of my bankruptcy clients are in sales and are paid on commission. When you file bankruptcy it is important to understand how the bankruptcy code treats commission payments and how you can protect your commissions. The important thing to understand is that if you work with a good Seattle bankruptcy attorney you can protect your future commissions. You should not let the fear of losing your future commissions prevent you from filing bankruptcy.
The biggest area of misunderstanding and concern is how commissions are characterized. You probably think of them as a paycheck, which makes total sense. However, the Bankruptcy Code treats them as an asset. They are an asset because they are an interest in property that you are entitled to receive in the future. The good news is that assets can be protected.
The first thing you have to understand is when a commission becomes an asset. As you know, the sales pipeline is full of customers and potential customers. Just because you have someone in your sales pipeline doesn’t mean that you will get a commission from them or that the commission will be part of the bankruptcy estate. The commission only becomes an asset when you are legally entitled to receive that commission.
Your legal entitlement to the commission is determined by state law. Typically, it arises when the sales contract is signed. In some industries, your legal entitled to a commission only arises when a deal closes. As you know, contract signing and deal closing can sometimes be separated by days, weeks, or even months. During that time a deal can fall through. I am familiar with commission structures and the law governing commissions in real estate, insurance, lending, vehicle sales, outside sales, and inside sales. Additionally, I will work with you to understand your commission structure. The purpose of knowing the law relating to commission income and understanding commission structure is to set up a bankruptcy petition that protects your future commissions.
Once I have analyzed your commission structure, we can setup a bankruptcy filing plan that protects those commissions. The first step is to look at all of your assets and determine how much future commissions can be protected. The second step is to time the bankruptcy petition so that you minimize the future commissions that are actually assets. I work very closely with my clients to determine when to file the case.
The other thing to keep in mind is that your exemptions come first. This is important, because you may not be able to collect all of the commissions that you list on your bankruptcy petition. For example, a sale may not close. The fact that a sale doesn’t close does not reduce your exemption, it reduces the amount available to the trustee.
The bottom line is that sales commissions and sales income can be protected in bankruptcy. If you are concerned about your financial situation contact David Fuller – an experienced Seattle bankruptcy attorney – about how bankruptcy can give you a fresh start and who can protect your future commissions.
The post Sales Commissions In Bankruptcy appeared first on Bankruptcy Attorney Seattle and Kent.
Bringing you the most up-to-date news, tips and blogs throughout the web. Here’s your Bankruptcy Update for June 04, 2013 AMR gets approval to have creditors vote on bankruptcy exit plan In Bankruptcy, Detroit Could Sell Off Its Art Collection Four years after bankruptcy, GM set to rejoin S&P 500
When you file bankruptcy protection you are required to report household income to determine eligibility of the chapter you wish to file. The same is true for married couples who file a joint bankruptcy or a married person filing an individual petition. In other words, you are required to report income of your spouse even [...]
Cash out your equity, get money to pay debts, and live happily ever after. Better watch out.
Last week I spoke with a wonderful woman with $50,000 in credit card debt, medical debts approaching six figures, and no equity in her home. She’s retired, 74 years old, and looking to file for bankruptcy.
We talked about the debts, her assets and, ultimately, the mortgage. Turns out, this was no ordinary mortgage.
Rather, it was a reverse mortgage. And as the name implies, it had gotten her turned upside down.
Reverse Mortgage Basics
A reverse mortgage allows you to borrow against the value of your house, just like a regular mortgage.
The difference is that you don’t have to pay back any of the money until you die or the house is sold.
To qualify for a reverse mortgage, you must be at least 62 years old and live in the property as your primary residence. Any mortgage you have on the property must be paid off with the reverse mortgage proceeds, and the limit on the loan is $625,500 as of this writing in 2013.
There’s usually no minimum income or credit requirement to get a reverse mortgage because s because no payments are required on the mortgage.
How You Get The Money
Once you’re approved, you can choose to either get the money all at once as a lump sum, fixed monthly payments either for a set term or for as long as you live in the home, as a line of credit, or a combination of those options.
The choice is entirely yours, and most reverse mortgages will give you the option and freedom of choice.
Beware The Dangers Of Reverse Mortgages
It all sounds good on paper, especially if you’re strapped for cash. But a reverse mortgage isn’t all wine and roses.
First, realize that you’re probably going to be paying more in fees and interest. This loan isn’t based on your credit, after all; as such, it’s not too far off from those subprime loans that pose such a threat to homeowners.
In addition, the loan’s got to be paid off when you die – often in a short period of time. So if you’re thinking of leaving the house to your children or other heirs, this may pose a problem for them. They’ll need to either sell the house or scramble to get a mortgage to pay off the reverse mortgage. If they’ve got bad credit, this may prove to be difficult.
The Danger Of The Debt Spiral
My client at the beginning of this article came to me with medical debts and no equity in her home. She’d gotten over $250,000 in a lump-sum payment on the reverse mortgage but that was a few years ago – the money went to pay off her old debts.
Now the money was gone, she’d drained her equity and her ability to leave an inheritance, and she was up to her eyeballs in new debt.
There was nowhere for her to turn except bankruptcy.
This is the same problem many other people have when they refinance. The difference here is that my client was elderly and didn’t have the ability to refinance her existing loan again.
That’s not to say that a reverse mortgage is always a bad idea, however. If you can use the funds to get out of debt, understand the risks and costs, and remain debt free then it’s a viable option.
Be sure to remain vigilant and informed.
For more information and resources, check out the following:
- Top 10 Things To Know About Reverse Mortgages (HUD)
- Reverse Mortgages For Seniors (HUD)
- Reverse Mortgages (AARP)
- Reverse Mortgage Information (FTC)
Image credit: Rusty Clark
Reverse Mortgages – Tool For Getting Out Of Debt, Or Recipe For More Trouble? was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Most often when you think about filing bankruptcy the process is completed by the debtor seeking protection. Yet, there are special circumstances in which a debtor may not be able to file a petition due to mental, physical, or financial challenges. It may actually make sense for them to file bankruptcy, but they are unable [...]
Courts have largely rejected a restrictive definition of the term debt allowing coverage of a broad spectrum of “consumer debts” beyond what you might normally expect including such diverse obligation as rent, student loans, utility and insurance bills,condo and attorney fees, judgements, debts already discharged in bankruptcy, car rental agreements and even campground memberships.
Some debts are just not debts for FDCPA purposes including some debts that you might expect to be covered such as taxes, shoplifting civil claims, fines, license fees, car accidents and child support. If a collector is harassing you for any of these non-FDCPA debts, relief still might be found under either Washington or Oregon state collection laws or under the Bankruptcy code, but you cannot seek assistance under the FDCPA
If you are getting harassed by any creditor or collector give us a call today. We can discuss your situation over the phone or, even better, set up an appointment for you to come in either of our Washington offices in Seattle or Vancouver or one of our Oregon offices in Salem or Portland. We will look forward to hearing from you.
The original post is titled Consumer Debts Covered Under the Fair Debt Collection Practices Act , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
Written by: Robert DeMarco
The Fifth Circuit has confirmed that the absolute priority rule remains intact for an individual filing a chapter 11 bankruptcy petition. Judge Edith Jones, writing for the Court, in In re Lively, 12-20277, 2013 WL 2347045 (5th Cir. May 29, 2013), concluded that section 1129(b)(2)(B), as amended by the Bankruptcy Abuse Prevention & Consumer Protection Act of 2005 (Pub.L. No. 109-8, 119 Stat. 23 (2005)) applies to individual debtor cases.
The scenario that Philip Lively [“Lively”] faced is nothing remarkable. To the contrary, it is rather commonplace. Lively initially filed a chapter 13 bankruptcy petition. However, Lively’s bankruptcy case had to be converted to on under chapter 11 once it was learned that the debtor’s claims exceeded the chapter 13 debt ceiling. See 11 U.S.C. § 109(e).
Lively proposed a chapter 11 plan that permitted him to retain all of his property, including the beneficial interest in a mortgage and none railroad tank cars that were being leased. The unsecured creditors’ class voted against confirmation, thereby putting into play the question of whether the absolute priority rule applies to an individual chapter 11 debtor.
The absolute priority rule provides that a Chapter 11 reorganization plan is “fair and equitable” with respect to a dissenting class of unsecured claims, if
(i) the plan provides that each holder of a claim of such class receive or retain on account of such claim property of a value, as of the effective date of the plan, equal to the allowed amount of such claim; or
(ii) the holder of any claim or interest that is junior to the claims of such class will not receive or retain under the plan on account of such junior claim or interest any property; except that in a case in which the debtor is an individual, the debtor may retain property included in the estate under section 1115, subject to the requirements of subsection (a)(14) of this section.
In re Lively, 12-20277, 2013 WL 2347045, pages 1-2 (5th Cir. May 29, 2013) (citations omitted) (emphasis in original). There was no dispute that the subject chapter 11 bankruptcy plan failed to comply with the absolute priority rule. Instead, Lively relied upon the minority position which, in reliance upon the above italicized language, holds that individuals are exempt from the rule’s application.
Judge Jones, in discussing why Lively’s position was in error, stated thusly:
Before the BAPCPA amendments, however, an individual Chapter 11 debtor would only have to satisfy the absolute priority rule with assets that were “property of the estate” at the date of filing for relief; the individual debtor’s personal post-petition earnings were not subject to liability to satisfy his creditors. In § 1115, Congress remedied this potential inequity in Chapter 11 by adding to the § 541 definition the individual debtor’s post-petition earnings and property acquisitions.
Id. at page 2. The Court then continued, quoting from In re Kanell, 451 B.R. 505, 511 (Bankr. C.D.Cal. 2011):
the property included in the estate under § 1115 includes all post-petition earnings, not limited by deduction for monthly expenses [as in Chapter 13] … [s]o, if the ‘absolute priority rule’ persisted after BAPCPA, it would have prevented the debtor from keeping any of his post-petition earnings as the price for cram down; thus enters the necessary amelioration in § 1129(b)(2)(B)(ii)…. But this is as far as one needs to go to make sense of the new statutory scheme.
Id. at page 3.
Be it good news or bad news, the issue is now resolved. An individual chapter 11 debtor, like any other chapter 11 debtor, must comply with the absolute priority rule in the Fifth Circuit.
DATED: May 31, 2013
Halsey Minor, founder of CNET, filed for bankruptcy in Los Angeles on May 24, 2013. What’s the lesson for the small business owner?
Let’s say you’ve hit on a grand business idea. You take a risk, throw a bunch of money at the venture, and dive deeply.
A few years later, you’re deep in the red.
Rather than fight an uphill battle against creditors, you do what the capitalist system allows.
You cut your losses, file for bankruptcy, and move onto the next big thing.
That’s what Halsey Minor did. And beneath the surface of his perceived excess, it makes perfect sense.
A Grand Opportunity
CNET was launched in 1994 as a production company for television programs dealing with the then-nascent technology industry. Riding the wave of the technology boom, CNET became a one-stop source for tech news and information, eventually expanding into radio and a series of web properties.
Those web properties are familiar to those who download software online (download.com) and look for the latest information about cutting edge technology. Some of the now-valuable domain named owned by CNET were:
- download.com
- downloads.com
- upload.com
- news.com
- search.com
- TV.com
- mp3.com
- chat.com
- computers.com
- help.com
- shopper.com
- radio.com
In 2008, CNET was bought by CBS Corporation for $1.8 billion. And with that sale, Halsey Minor did what every entrepreneur dreams of.
He cashed out.
Waking Up From The American Dream
From there, Minor embarked on a series of business transactions. He bought art. He bought real estate. He invested in companies such as Grand Central, the precursor to Google Voice.
Some made money (Grand Central was a big win) and others lost money (the real estate venture was a notable bust).
In the end, Minor was left with $100 million in debt and only $50 in assets.
The Bankruptcy Bargain
Minor chose to file for Chapter 7 bankruptcy, turning over his assets in exchange for a discharge of his debts.
For the American business person, it’s a fair trade: you gamble with the house’s money and, if you lose, you cash in your chips.
Minor clearly realizes this, and says, “if you win some you are going to lose some too.”
It’s no cavalier attitude, despite what the press may think. It’s the reality of the business world. You bet, you lose, you go home.
But that’s not the full story.
In the time after you begin your business dealings and before you file for bankruptcy, you employ people to help realize your dream. You pay them money and they, in turn, spend that money back into the economy.
That doesn’t make it easy or fun for the person filing for bankruptcy, of course. Losing hurts, after all.
You lose your business, your belongings, and a piece of your ego. It’s a harsh price to pay, but a fair one.
That’s What Makes The Country Move Forward
Without bankruptcy as a means for the business person to cut their losses, no risk or innovation happens.
The guy with the great idea doesn’t take a chance because he knows that if he loses, he’s got nowhere to turn.
That new technology never sees the light of day because nobody’s willing to put their neck on the line.
Those employees are never hired. They never buy homes and cars.
The wheels of commerce grind to a halt.
Next time you see a business fail, think about all the good that came out of it before the fall.
Image credit: jdlasica
Halsey Minor And The Bargain Of Business And Bankruptcy was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Not all debts are covered by the Fair Debt Collection Practices Act. Consumer debts are the only debts that fall within the ambit of the Act. Though a collector may violate Washington or Oregon state collections laws by engaging in collections activity that would normally violate the FDCPA, if the debt itself is commercial rather than consumer, there is no violation of the Fair Debt Collection Practices Act.
The original purpose of the debt determines whether the debt is consumer or comercial. This is not an all or nothing approach. If the business purpose was a small part of an otherwise personal loan, the FDCPA likely applies. Moreover, personal checks made out to retain businesses create a rebuttable presumption that the debt was made for consumer purposes. It has been found that where personal debts incurred with a business credit card, the actual use of the card ultimately won out over the business label on the card.
The original post is titled Consumer and Business Debts and the FDCPA , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
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