An article posted in Forbes, on Monday, stated that “incomes rose for the sixth time in seven months, boosting household finances and potentially providing fuel for greater future spending.” This would be hopeful news for those who have been suffering with the impact of the faltering economy over the past year but oddly enough the amount of money spent on goods declined.

The Commerce Department stated that wages and salaries rose 0.5 percent last month. But, according to Christopher S. Rugaber, “consumers haven’t been driving the current recovery. Instead, it has depended more on business spending and exports. In the four quarters following the steep 1981-82 downturn, consumer spending rose by an average of 6.5 percent per quarter. By contrast, even as the economy has grown for the past three quarters, consumer spending rose an average of only 2.5 percent per quarter.”

The economy has improved over the past three quarters. Yet, consumers remain cautious in the face of high unemployment, limited credit and a declining housing market. If consumption continues to be restrained, the economy may not rebound fast enough to create new jobs and rapidly affect a decrease in the 9.7 percent unemployment rate.

If you have any questions, please feel to contact me without obligation. I am here to help. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form.

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• Buy a Newer Used Car - Cars decline in value the most during the first few years. Therefore models that are less than five years old can be a great value because you get a nearly new car still in good working order for a fraction of the new-car price. And you’ll pay less for your insurance cost and taxes, also.
• Use a Smaller Car - A big gas guzzler or sports car costs more, has higher insurance premiums, uses more gas, and costs more to repair. A car that gets good gas mileage can save hundreds of dollars a year. According to Kiplinger “drive 1,200 miles per month in a car that averages 18 miles per gallon, and you’ll spend $233 per month (at $3.50 per gallon). Drive a car that averages 25 miles per gallon, and you’ll spend $168 per month-a savings of $65 per month, or $780 per year.”
• Shop for Auto Insurance - Refer to prior blog for discussion of Auto Insurance
• Shop for Gas - Take the time to find the least expensive gas in your area. Gas prices can vary as much as twenty percent. Use a resource such as ColoradoGasPrices.com to find the least expensive station in your area.
• Be a One Car Family - You can easily save $500/month just by getting rid of an extra car. Explore the possibility of using only one car for you and your family.
• Avoid Driving When at All Possible - Obviously, the best way to save money on driving is by not driving. If you drive the same route every day, organize a carpool or take the bus. Not having to drive during rush hour traffic might also be a way to reduce stress. You will also save money on parking. And for those of you who live close enough to your work or your grocery store consider walking or bike riding. Not only will you save money but it will be beneficial to your health.
• Check Your Tire Pressure - Be sure that your tires are properly inflated. You could save as much as three percent on gas, which for an average driver will be approximately $50/year.
• Remove the Luggage Rack - If your car has a luggage rack, you could be reducing your fuel efficiency by ten percent. Taking the luggage rack off when you aren’t using it will save an average driver approximately $150/year.
• Remove Excess Weight - Some people store unnecessary items in their car. The extra weight can reduce your mileage.
• Don’t Buy Premium Gas - If your car does not require premium gas, then buying it will not help your mileage or your car’s performance.
• Decrease Use of Air Conditioning When Possible - Air conditioning will decrease your gas mileage. So when at all possible turn it off. Note that while driving at slow speeds, it is more efficient to roll down the windows. At high speeds, air conditioning is more fuel efficient because rolling down the windows increases wind resistance.

If you have any questions please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer your questions with no obligation. I am here to help.

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One of the areas in which many people spend money unnecessarily is for their phone service. If you are still using a landline, be aware of some of the money-saving options that are available to you:

• One option is Vonage. Vonage utilizes your internet connection to make phone calls worldwide, for prices as low as $17.99/month. And you can use a phone that is exactly like your traditional landline
• Another choice is Skype. Via your computer, you can talk for free to other Skype users, and make inexpensive calls to landlines and cell phones. Skype requires that you have a microphone available to you. Many systems require a computer headset. If you have webcam as part of your computer system you and the person you are calling can actually see each other on screen while talking.
• A final option is called MagicJack. It’s a device that is used to plug a phone into your computer. It uses your internet to make calls. The device costs $40 plus there is $20/year charge for unlimited calling.

If you do use a landline you can also save money by not paying for long-distance services. Instead, consider purchasing a calling card. There are cards available that allow you to make long-distance calls for no more than two cents a minute. Be sure that there are no connection fees or minimal connection fees associated with whatever card you use.

If you prefer to use a cell phone, consider one of two options. If you are a heavy phone user, you might want to pay for an unlimited service at a relatively low rate. There are cell phone companies that offer unlimited long distance and local calls for a fairly reasonable fixed rate, such as Cricket.

The other option to consider is a prepaid cell phone plan. If you do not talk frequently on the phone you can use a prepaid plan, such as T-Mobile, Virgin, or AT&T offers. Most of these plans usually charge approximately ten cents a minute and your minutes never expire. And you do not have to pay the taxes and fees that other services require. Also, there is no long term commitment with a contract to be signed.

Keep in mind that talking on a cell phone can be costly, particularly international calls. If you want to save on minutes, consider using Skype when you are at your computer.

If you find yourself with serious economic problems, please feel free to contact me with any questions you might have. Kevin D. Heupel, Colorado Bankruptcy attorney, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer them with no obligation. I am here to help.

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One of the major bills that most people have to pay on a regular basis is auto insurance. So it can be a significant way to save money. The key is to carefully comparison shop. There is a very useful website for that purpose: www.insureme.com. You can acquire free insurance quotes at this site and compare them for the best deal. Keep in mind that you may negotiate with local insurance agents for a better deal, especially with competitive quotes in hand.

Many insurance companies give discounts under certain conditions. Having a good driving record, of course, is one way to earn a discount. Some insurance companies actually offer a discount to nonsmokers. Many will give a discount if you use them for both your auto and home insurance. Be sure to ask the agent representing the company for a list of the discounts that they offer.

If you find yourself having serious economic problems, please feel free to contact me with any questions you might have. Kevin D. Heupel, Colorado Bankruptcy attorney, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer them with no obligation. I am here to help.

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While scanning the internet last weekend I noticed that there were quite a few articles, ads, and blogs that seemed to imply that getting out of debt is an easy task. The suggestions often lean toward options such as debt management, debt settlement, or credit counseling. Some of these ideas can be useful, but keep in mind, as I have mentioned in an earlier blog, many are no more than outright scams. Remember to be cautious about any suggestion that requires you to pay money upfront. And if a suggestion sounds too good to be true, it most likely is. Besides, many people may be in too much debt for any of the above steps to be a viable option. If this is the case, then bankruptcy may be the only sound choice.

If you are thinking about filing bankruptcy be sure to consider law firms that mainly focus on bankruptcy issues. It is important to work with an attorney who is familiar with the complex bankruptcy rules and laws of your state. Someone who primarily works with bankruptcy issues will be better able to understand the nuances of your situation as it relates to a bankruptcy case.

If you have any questions, please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy attorney, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer them with no obligation. I am here to help.

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This month the New York Times posted an interesting article by Ron Lieber discussing the student loan situation that I wrote about in yesterday’s blog. Mr. Lieber points out that individuals who overextend themselves economically by purchasing luxury items are permitted to eliminate their debt through bankruptcy; yet if you borrow the money for an education and end up in financial trouble it is almost impossible to erase the education debt in a bankruptcy court-even if, as I pointed out yesterday, it’s a private loan from for-profit lenders. The two bills that are now in the Senate and House of Representatives that I mentioned yesterday would relax the rules for private student loans.

To clarify the issue at hand you must understand that there are two main types of student loans. There are the federal loans, like Stafford and Perkins loans, which would not be included under the proposed legislation. Since the federal government (and in the end the taxpayers) stand behind these loans it seems reasonable that they are not included in the new bills.

The second kind of debt, private loans underwritten by profit-making banks that do not have any government guarantees and come with fewer options for repayment are the ones that are being considered for discharge in a bankruptcy case under the new bills. This seems only fair, especially since undergraduates can borrow a lot more than they can with federal loans, increasing the chances of them having trouble with repayment.

Ron Lieber stated that “. . . the volume of private loans, which are most popular among students attending profit-making schools, has grown rapidly in the last two decades as students have tried to close the gap between the rising price of tuition and what they can afford.”  During the school year of 2007-2008 approximately one third of all graduates with bachelor’s degrees had used a private loan at some time in their education, according to College Board research.

Of course, there is some debate about whether relaxing the bankruptcy laws in relation to student loans is a wise move on the part of our legislators. But, as Lieber suggests, the cost of the student loans might decrease. “And young adults just getting started in life might be less likely to face a nasty choice between decades of oppressive debt payments and visiting a bankruptcy judge before starting an entry-level job.”

If you have any questions, please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer them with no obligation. I am here to help.

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At this time education loans are not dischargeable during bankruptcy cases except in extreme circumstances. Under the US Bankruptcy Code at 11 USC 523(a)(8) borrowers who want to get a bankruptcy discharge for their student loans must demonstrate in an adversary proceeding that repaying their student loans “would impose an undue hardship on the debtor and the debtor’s dependents.” This is an extremely difficult requirement to fulfill and many bankruptcy lawyers don’t even attempt it.

But as of April individuals who have taken out private student loans may be given a way out if they are experiencing economic difficulties. The “Private Student Loan Bankruptcy Fairness Act of 2010” would make it possible for students to terminate their private student loan debts if they declare bankruptcy.

Senators Al Franken (D-MN), Dick Durbin (D-IL), and Sheldon Whitehouse (D-RI) presented the Fairness for Struggling Students Act (S.3219) in the US Senate on April 15, 2010. Congressmen Steve Cohen (D-TN) and Danny Davis (D-IL) presented the Private Student Loan Bankruptcy Fairness Act of 2010 (H.R. 5043) in the US House of Representatives on the same day.

Senator Durbin stated that the Fairness for Struggling Students Act is a step toward “restoring fairness in student lending by treating privately issued student loans in bankruptcy the same way other types of private debt are treated.” He also pointed out that a major goal of the legislation is to “give students who find themselves in dire financial straits a chance at a new beginning.”

“This bill will help to ensure that people who seek higher education to better their futures are not dissuaded from doing so by the threat of financial ruin,” Rep. Steve Cohen said in his address to a committee when presenting the Private Student Loan Bankruptcy Fairness Act of 2010.

If you have any questions, please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer them with no obligation. I am here to help.

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You may read about successful upper-class people who are filing bankruptcy and wonder why they are able to file without the shame that many middle-income people experience. People like Donald Trump, who is one of the most successful businessmen alive and has filed bankruptcy more than once, Larry King, one of the premier broadcast interviewers who has won an Emmy Award, Two Peabody Awards, and ten cable Ace Awards, and Abraham Lincoln, who was President of the United States and was known as Honest Abe. The reason is simple: they know that bankruptcy is a financial tool which should be used when needed. They are aware of the fact that filing bankruptcy is not a sign of being a failure or of being irresponsible. Quite the contrary, to file bankruptcy before having ones home go into foreclosure or losing one’s property is a sign of financial intelligence. I mean really take a moment to consider Donald Trump, one of the wealthiest men alive today. He has filed bankruptcy knowing full well that it will be in the news and is not disturbed by this fact. With his economic savvy, he understands that bankruptcy is there for his protection as well as ours.

If you are at a place where you are weighing your options and have questions you need answered, please contact me. Kevin D. Heupel, Colorado Bankruptcy Lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form.  I will answer your questions with no obligation. I am here to help.

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The case of Sarah Ferguson, aka “Fergie,” is an example of the point I have tried to make in prior blogs. According to Steven Swinford and Daniel Foggo of the Australian, “She [Fergie] now stands on the brink of bankruptcy as she struggles to pay off almost $1.7 million of debts. The extent of her desperation was exposed last weekend when she was filmed offering to introduce a reporter posing as a businessman access to Prince Andrew, her former husband, for a £500,000 ($853,000) fee.”

In other words, rather than face her economic crisis head on and take the necessary steps to resolve her problems, she compounded them by accepting a bribe. To make matters worse, the scandal has been all over the news for the past three weeks. If she had simply chosen to use the resources available to her and filed for economic protection through bankruptcy, she would have avoided a great deal of embarrassment. Many people seem to think that bankruptcy is the last option they should consider while having economic difficulties. But clearly, by waiting or trying to evade bankruptcy altogether, they end up in dire straits that could have otherwise been avoided.

Please contact me before this happens to you. I will answer your questions with no obligation. I am here to help. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form.

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To continue in the vein of my last blog, I want to note a worrisome trend. Many people do not seem to know when it is time to file personal bankruptcy. Rather than seeking protection from bankruptcy, a substantial number of Americans who are burdened with debt have gone into what one might call a “shadow economy.” According to an article in USA Today the signs of trouble are obvious. Student loan defaults and home foreclosures are rising, and defaults on bank card loans have increased from less than eight percent in March to a little over nine percent in April, according to the  S&P/Experian Consumer Credit Default Indices. Despite these indicators of economic crises in March and April, during the same two months, bankruptcy filings decreased by four percent.

Bankruptcy is supposed to provide a fresh start to people who are in serious financial distress.  ”But only a fraction of those in serious financial distress are filing for bankruptcy,” says Katherine Porter, associate professor of law at the University of Iowa. Some of the people who are postponing bankruptcy are doing so because they hope to save money for the various fees associated with filing. But delaying bankruptcy is not good for debtors. “It’s similar to delaying going to the doctor, because you’ll just end up with more problems,” says Lawless, professor of law at University of Illinois. The system is not just more costly, it is more complex. The requirements include pre-bankruptcy credit counseling, six months of income information, and two years of tax returns. If the debtor waits to file, an attorney has to collect new information. “The paper chase gets greater, and then the fee goes up,” says William Brewer, a bankruptcy lawyer in Raleigh, N.C.

So do not wait to get the help you need. Please contact me, Kevin Heupel, at Colorado Bankruptcy Help with any of your questions. You can reach me at 303-955-7570, or COBankruptcyHelpEmail, or submit one of our free-consultation forms without any obligation. I am here to help.

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