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Credit Card Balances Reach Highest Levels Since 2008, TransUnion Reports
According to an article in ACC International (an Association of Credit and Collection Professionals) “On the heels of a strong holiday shopping season, our data show that consumers are charging more of their purchases, a positive sign for the credit card industry,” said Nidhi Verma, director of research and consulting in TransUnion’s financial services business unit. “With a stabilized delinquency environment reflected by essentially the same delinquency rate as in Q4 2013, credit card balance growth generally reflects a healthy market with more consumers gaining access to credit—and using that credit to make purchases.”
What does this quote above really mean? It means that more people are charging their purchases rather than paying out right. This may be a “positive sign for the credit card industry”, but it is troubling sign for the consumer. Of course new debt is great for the credit card industry, but what does it really mean for the consumer?
Couple that with “(n)ew entrants into the credit card market also impacted total balances. The number of consumers with access to credit grew to 157 million in the fourth quarter of last year, an increase of nearly 7 million from the fourth quarter of 2013. However, the average credit card balance per consumer remained flat, declining only $3 from $5,330 in the fourth quarter of 2013 to $5,327 in the fourth quarter of 2014.”
What is disturbing about this last paragraph? Two things. First, the use of credit is growing, most likely by the young who do not know how to handle credit. Second, the average of every credit card is approximately $5,330. Since more consumers have at least 2 cards, that means they are carrying approximately $10,660 of debt. This amount would be almost impossible for most consumers to pay in the next six months.
Riskiness of U.S. home loans continued to rise in Q4
According to an article in Scotsman’s Guide (publication for mortgage originators) “U.S. loans got riskier at the end of last year as the federal government encouraged looser credit and nonbanks continued their rise in mortgage lending, according to American Enterprise Institute’s (AEI’s) International Center on Housing Risk.
AEI’s National Mortgage Index increased to 11.97 percent in January, up 0.4 percent for the quarter and 0.8 percent from a year ago. Meanwhile, the index that tracks Federal Housing Administration-backed loans jumped to 24.41 percent, up 1.5 percent year over year. This means that AEI estimates that nearly 12 percent of all loans that it tracks and nearly a quarter of FHA-backed loans would fail in a severe recession similar to the financial crisis of 2007-2008. (emphasis added)
Stephen Oliner, the center’s co-director, said in a morning briefing on Monday that credit remains loose.
“We continue to find that the QM [Qualified Mortgage] regulation has not been reducing the volume of loans of high-debt-to-income ratio,” Oliner said. “Over the past three months, nearly a quarter of loans had a debt-to-income ratio above the nominal QM limit of 43 percent, which is a few percentages above the share of new loans in the half year before the QM regulation went into play.””
The post Two Disturbing Articles – Credit Card Debt Up & Risky Home Loans Up appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
When you know what information you need beforehand, Federal and Wisconsin tax return filing becomes a lot easier. Use this handy list to help you prepare for Federal and Wisconsin income tax return filing.
1. If you are filing your income taxes in person with a CPA or another business, such as H&R Block, be sure to bring photo identification, such as your Driver’s License and Social Security cards for all adults.
2. You will need to know the date of birth and social security numbers for everyone in your household. This includes your spouse, children, and any other person living with you for whom you provided care during the tax year.
3. Current address and relationship to you of all individuals you provided care to during the tax year.
4. W-2s from every job held during the tax year for all individuals in your household.
5. Any 1099s received by any person in your household. Common 1099s indicate interest earned, refunds received, social security, loans, reimbursements, last year’s State of Wisconsin refund, winnings, etc.
6. Any 1098s received. 1098s report payments you have made, such as school loans.
7. Any 1095 received showing credit from the healthcare.gov marketplace (health insurance).
8. Statements from your bank accounts showing savings and investments.
9. Your bank’s routing number and the account number which you would like your refund direct deposited in, if you choose the direct deposit option.
10. Last year’s Federal and Wisconsin tax returns, if you have them.
11. Any property tax paid on your home.
12. Home improvement expenses, if deductible. Sometimes certain energy star appliances, doors, and windows are deductible.
13. Medical expenses and miles driven for medical purposes (to and from your doctor). This includes dentist, eye doctor, general practitioner, hospital expenses, specialists, prescription medications, over the counter medicine, dietary food items, and medical equipment.
14. Interest paid on your mortgage.
15. Childcare expenses. This pertains to daycare expenses you pay a childcare provider. You will need their tax information.
16. Business expenses, such as required uniforms, meters paid for parking, miles driven, hotels, cabs, airplane tickets, etc. If self employed, this also includes office equipment purchased, insurance paid, advertising expenses, office supplies, etc.
17. Moving expenses, if related to your job.
18. Amount or value of charitable donations given.
19. Gambling losses.
20. Cost of last year’s income tax return filing.
21. Any vehicle sales tax paid.
22. Mortgage points.
23. Hobby expenses.
24. Out-of-Pocket expenses paid by teachers for items used in the classroom.
25. Expenses related to job searching, such as the cost of printing resumes.
Remember, you must keep a copy of your tax records for seven years. Your Federal and Wisconsin income tax returns must be postmarked by April 15, 2015.
There are two new features available from the IRS this year. First, the IRS allows you to get your tax transcripts for free online. To get a free transcript online, you must have a Social Security Number and access to your email account to confirm your email address. Then, you’ll need to answer some personal, financial, and tax related questions to verify your identity.
The second new featured offered by the IRS this year is if your debt to the IRS is less than $25,000 total, you can get set up an installment agreement online to make monthly payments. Before applying for any payment agreement, you must file all required tax returns.
If you have questions regarding Federal or Wisconsin income tax returns, bankruptcy, or debt repair, please contact Wynn at Law, LLC. Our expert debt attorney can answer your questions. Wynn at Law, LLC has offices in Lake Geneva, Salem, and Delavan, Wisconsin. You can reach our Wisconsin tax attorney by phone at 262-725-0175 or by email via our website’s contact page.
*The content and material on this web page is for informational purposes only and does not constitute legal advice.
Reaffirming a Debt in Bankruptcy
There are times when clients who have filed chapter 7 or 13 bankruptcy will ask whether or not they should reaffirm a debt that would otherwise be discharged in their bankruptcy. Reaffirmation is an agreement made with a creditor to continue paying off a debt even after bankruptcy. There may be legitimate reasons for wanting to reaffirm a debt or loan. However, before the changes in bankruptcy law in 2005, it was not uncommon for creditors to use coercive methods to try and get debtors to reaffirm a loan. Reaffirming a debt means that you will be legally responsible for repaying the debt after your bankruptcy even though the bankruptcy would have released you of any legal responsibility to pay it back.
The post Reaffirming a Debt in Bankruptcy appeared first on Tucson Bankruptcy Attorney.
Reaffirming a Debt in Bankruptcy
There are times when clients who have filed chapter 7 or 13 bankruptcy will ask whether or not they should reaffirm a debt that would otherwise be discharged in their bankruptcy. Reaffirmation is an agreement made with a creditor to continue paying off a debt even after bankruptcy. There may be legitimate reasons for wanting to reaffirm a debt or loan. However, before the changes in bankruptcy law in 2005, it was not uncommon for creditors to use coercive methods to try and get debtors to reaffirm a loan. Reaffirming a debt means that you will be legally responsible for repaying the debt after your bankruptcy even though the bankruptcy would have released you of any legal responsibility to pay it back.
The post Reaffirming a Debt in Bankruptcy appeared first on Tucson Bankruptcy Attorney.
I have been getting more and more inquiries regarding prior clients with regard to their mortgage companies. It appears that the mortgage companies are not reporting their timely payments to the credit bureaus. For this reason, I decided to address it in this blog. The bottom line is that your mortgage company is not required+ Read More
The post Your Mortgage Company Is Not Required To Report To The Credit Bureaus appeared first on David M. Siegel.
Are You Looking for a Bankruptcy Lawyer in Springfield VA? Hi. I’m Northern VA bankruptcy lawyer Robert Weed. I’ve helped twelve thousand people in Northern VA get anew start in life with bankruptcy. Do you need a new start? Are you looking for a bankruptcy lawyer near Springfield VA? There are no bankruptcy lawyers in […]The post Springfield VA Bankruptcy Lawyer Information by Robert Weed appeared first on Robert Weed.
JCH LAW FIRM is pleased to announce that Attorney Jeff Hsu, Certified Bankruptcy Specialist with the State Bar of California, will be presenting along with fellow attorney Dennis Huang this Thursday, March 12, 2015 at the Institute of Internal Auditors. The presentation topic will address issues of bankruptcy fraud.
JCH LAW FIRM is pleased to announce that Attorney Jeff Hsu, Certified Bankruptcy Specialist with the State Bar of California, will be presenting along with fellow attorney Dennis Huang this Thursday, March 12, 2015 at the Institute of Internal Auditors. The presentation topic will address issues of bankruptcy fraud.
The post Attorney Jeffrey Hsu to Give Talk on Bankruptcy Fraud to the San Fernando Valley Institute of Internal Auditors 3.12.15 appeared first on JCH LAW FIRM.
JCH LAW FIRM is pleased to announce that Attorney Jeff Hsu, Certified Bankruptcy Specialist with the State Bar of California, will be presenting along with fellow attorney Dennis Huang this Thursday, March 12, 2015 at the Institute of Internal Auditors. The presentation topic will address issues of bankruptcy fraud.
The post Attorney Jeffrey Hsu to Give Talk on Bankruptcy Fraud to the San Fernando Valley Institute of Internal Auditors 3.12.15 appeared first on JCH LAW FIRM.
Many people assume that their business will not be affected when they file bankruptcy. They may be very wrong in that assumption. Why? The answer is “it depends on the type of bankruptcy filed”. Most individuals file a chapter 7 bankruptcy. In a chapter 7 the individual cannot keep their business, assuming it has any value. Instead, it will be sold by the bankruptcy trustee and the funds paid to the creditors. Even if the business is valueless the creditors still have a potential claim. Also, the individual needs to consider how to protect future profits before continuing to operate the business.
For example: In re NAKHUDA, ) Bk. No. 14-41156 , BAP No. NC-14-1235-TaPaJu (9th Cir, 3/2/15). In this case the Debtor disputed that a chapter 7 debtor, as matter of law, must shut down a business and turn it over to the trustee upon filing for bankruptcy. The Debtor asserted that the Code is not so “black or white”. Unfortunately the 9th Circuit Court of Appeals disagreed with the Debtor.
“A chapter 7 debtor is required by statute to cease operation of a business upon filing for bankruptcy. First, as discussed in more detail below, a debtor has the affirmative duty to surrender all estate property and records to the chapter 7 trustee. See 11 U.S.C. § 521(a)(4). Unauthorized continuing operation of a chapter 7 debtor-owned business and retention of control over its assets is absolutely inconsistent with this statutory mandate. Further, the Code also makes clear that continued operation, if allowed at all, can only occur by (or in cooperation with) the chapter 7 trustee and only after approval by the bankruptcy court. See 11 U.S.C. § 721 (“The court may authorize the trustee to operate the business of the debtor for a limited period, if such operation is in the best interest of the estate and consistent with the orderly liquidation of the estate.”) (emphasis added). Thus, “[u]nlike in a chapter 11 case, where the Code expressly authorizes the debtor to continue to operate its business, in a chapter 7 case, the bankruptcy court can authorize only the trustee, and not the debtor, to operate the debtor’s business pursuant to section 721.” 6 Collier on Bankruptcy ¶ 721.01 (Alan N. Resnick & Henry J. Sommer eds., 16th ed. 2012) (emphasis added). ”
The moral is – never file for bankruptcy without first talking to a very experienced bankruptcy attorney. Also, you need to be warned away from using any company, lawyer or document preparer who advertises their fees in an attempt to offer the “lowest price possible”. Document preparers are not allowed to give you any legal advice, that includes correcting your misconceptions about how the bankruptcy may affect you or your property. Also, law firms who advertise on TV, billboard or the Internet must pay for that advertising. They do this by treating their clients like cattle – mass producing milk at the lowest rate possible. They also do this by not providing quality legal advice tailored to the specifics of the individual. Be very careful or you may have a very nasty surprise waiting.
The post I Filed a Chapter 7. Why Did the Trustee Take My Business? appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
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