The newly formed government agency, U.S. Consumer Finance Protection Bureau, reports that the Credit Card Accountability, Responsibility, and Disclosure (CARD)Act has caused the U.S. credit card industry to revise policies while reducing and eliminating some penalty fees. Highlights of the report include:
These developments are a step in the right direction toward helping consumers with debt management.
What would happen if lawmakers don’t raise the short-term debt limit to fund the federal government with financial restructuring? “Chaos” according to US Federal Reserve Chairman Ben Bernanke. Bernanke told the Senate Banking Committee that the changes are necessary in order to reduce the nation’s debt in the coming years, according to the Wall Street Journal.
According to reports, some republicans want to tie an increase in the debt-ceiling in with cuts to government spending. However some democrats want to consider both measures separately. Treasury Secretary Timothy Geithner has said that the US government will likely hit the debt ceiling in April or May.
Bernanke fears lumping the issues together would mean the US wouldn’t raise its debt ceiling and would instead end up defaulting on debt. “It would be extremely dangerous and likely recovery-ending event,” Bernanke told reporters. “For a very long time afterwards, the U.S. would have to p Read full post…
An important part of putting together an IRA, 401 or other qualified plan is appointing a beneficiary. On a positive note, this helps ensure that upon your death, any remaining account balance will transfer directly to your heirs without going through probate. On the negative side, your heirs might lose up to 80% of the account’s balance to income and estate taxes, both federal and state.
On other assets, heirs pay less or even no tax. Stocks the owner holds outside a qualified account and passes to his heirs receive a step-up in cost basis to the value on the date of death, so heirs pay no capital gains tax on the stocks’ appreciation during the original owner’s lifetime.
By leaving qualified plan balances to nonprofits and more tax-advantaged assets to your heirs, you have the potential to get more of your wealth where you intended. Nonprofits, being tax exempt, pay no income tax on the money they receive. Read full post…
Should you file for bankruptcy yourself? When pondering the question some point to the old saying, “he who represents himself has a fool for a lawyer.”
Some online companies that offer legal advice make it sound as though filing for bankruptcy is as simple as filling out forms. Someone might want to ask someone from one of those companies if completing a tax return is as simple as “filling out forms.” Tax forms have written instructions for non-professionals and non-accountants. Bankruptcy forms do not have written instructions written with the novice in mind.
If you have a lot of assets to lose in a bankruptcy, it might be worth your while to hire a lawyer when you file.
There are many mistakes typically made by those who file for bankruptcy themselves.
One common mistake made is exemptions are not included in the filing. These are things that are not included in the bankruptcy itself and cannot be touched by creditors or a bankruptcy trustee. Such things are covered by law, and not including them can cost a person filing for bankruptcy a lot of money and headaches.
Some filing for bankruptcy fail to list such items as property such as stock options, interest in probate estates, partnership interests, lawsuits, trust funds, retirement funds, and tax funds.
Some filing for bankruptcy themselves fail to list certain kinds of creditors, and this is a mistake. Another mistake is not listing creditors because the filer wants to repay the debt to a person or business.
Some debtors, wrongly believing nobody will know anyway, do not disclose some assets or transfer assets to others before their bankruptcy.
Some debtors greatly underestimate how much their living expenses are.
New bankruptcy amendments in 2005 mean some cases are dismissed automatically. In some cases, the relief available is limited. This makes the forms which must be completed very complicated. The changes made to the law were meant to discourage bankruptcy filings. The process is more complex. The mistakes are most costly.
Chapter 13 bankruptcy laws were not created for those representing themselves, laymen, or those who are not bankruptcy experts. Initial consultations with bankruptcy attorneys are free or inexpensive. Alternatives to filing for bankruptcy yourself would be saving up to pay attorney fees or finding a legal plan that will allow you to pay over time.
Although “good” is a subjective term, we can clarify positives and negatives related to using debt consolidation as a method for debt management. Debt consolidation functions in a manner similar to refinancing a home mortgage; you’re trading one or more debts for a single new debt, typically one offering lower finance charges. Potential benefits associated with debt consolidation include:
During the present economic slowdown, many Americans are dragged into debt as they are habituated to spend money as much as they earn without savings. This attitude of Americans continues since ages and as a result is experiencing when there is slowdown in economy and rise in unemployment rate.
It is very hard to change the habit of spending suddenly when someone has reduced income too and that leads to mounting in debt as they start borrow money to cover their expenses.
For those who can not control their spending habits, it is necessary that they take help of debt solutions. There are many ways to find debt free and debt consolidation is one such alternative to become debt free. When people think of choosing debt consolidation they often come up with one doubt in mind – will debt consolidation hurt my credit score? And many people often wonder if that really works.
Well the answer to the questions will lot depend on the company that work for debt consolidation. J
If you have landed in the dreaded pit then remember that you can dig your way out of it gradually, just like it took time for you to get surrounded by debt. You just need to show some patience and perseverance and think about following these tips here.
• Don’t be in denial and admit you have a debt in hands and set aside sometime each day to deal with your piggy bank.
• For the first 30 days keep your credit cards aside and don’t buy unnecessary stuff. The essential items like bills, groceries, gas, fees need to be paid on priority basis. The semi-luxury items, gadgets, and mobile devices can be halted in this period as they increase expenditure cause of recharging, balance fill or monthly purchase.
• Start making small cut backs, like buying non branded items at grocery, packing lunch for work, wearing sweaters instead of using heaters etc.
• The money you save from following above steps can be set up in an emergency fund with a target of at least $1,000 which you can keep adding to.
• Make a list; first put all your loans like bills, electronic rentals, auto loans etc. The amount in debt