During this economic downturn it is prudent to seriously consider creating a budget. The first step you have to take in order to build an effective budget is to prioritize your financial aspirations. When choosing your goals, you should consider those that help you to feel financially secure, as well as happy or fulfilled. Obviously it will not be possible to fulfill every one of your financial desires. If you state your goals clearly and decide which ones are most important to your financial well-being you will be able to focus on the ones that truly matter.  And when you narrow your focus on the prioritized goals, you are more likely to succeed with them. Once you compile your list, rank the items in order of importance.

If you are like most of us, you tend to procrastinate when it comes to doing things that make you face stressful issues in your life. A budget is definitely one of those activities. But, take my word for it, the longer you put off starting a budget-identifying and working toward your economic goals-the more difficult it will be to reach them.

A crucial aspect of the budgeting process is being sure to ask yourself every time you are going to make a purchase, particularly a large one, whether or not it will move you closer to your goals or further away. You must commit to yourself and your family to make your choices based upon the answer to that question. If you do, before long, your finances will be under your control.

If you have any questions or are considering filing bankruptcy please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer your questions without obligation. Remember, I am here to help.

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Joshua Brockman posted an article on NPR.org recently that examines the wisdom of renting instead of buying a home during this economic recession. While the housing market is in a slump, consumers looking for homes and the Obama administration are rethinking the tendency to prefer buying over renting.

“With so many homes and apartments on the market, rents are being held down, according to the government’s consumer price index for rent. The CPI inched up just 0.3 percent over the past year-that’s the lowest yearly increase since the late 1940s,” according to Brockman.

Mark Obrinsky, chief economist for the National Multi Housing Council, says that “when the economy recovers, he expects to see a rebound in demand for apartments and rental houses. That’s because tighter lending standards will make it tougher for people to buy homes.”

The Obama administration will probably focus more on renting during the next few months. Quite a few administration officials have shared their concern that there has been too much emphasis on homeownership. An official reported to NPR that “rentals are better financial options for many Americans.”

The director of Harvard’s Joint Center for Housing Studies, Nicolas Retsinas reports that the federal government is presently trying to decide whether to continue to favor homeownership or “seek a more balanced housing policy, talking more about giving people options, worrying more about whether people have a decent place to live, rather than whether they own or rent.” Retsinas claims that “rent” is no longer a “four-letter word.”

“In the past, you rented if you didn’t make enough money,” he states. “You rented if you weren’t ambitious. You rented if you weren’t sort of smart enough. But as it turns out, as we look in recent years, renting turned out to be a pretty smart thing to do.”

The reason renting proved to be a better option was because renters didn’t end up stuck with mortgages higher than the value of their homes. Renting also offers people the option to move freely in pursuit of employment. Although it is true that renters do not get the same tax breaks that homeowners do, during this faltering economy it may be a wiser way to go.

If you have any questions or are considering filing bankruptcy please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer your questions without obligation. Remember, I am here to help.

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During this economic recession there is a way to increase your income. If you have chosen to receive your Social Security prior to age seventy you can raise your sustainable living standards. Using form 521 repay all the Social Security you have received in the past then reapply for higher benefits. You are required to pay your gross benefits before the amount deducted for Medicare Part B premiums. But the good news is that no interest is charged on the repayment and it is tax deductible. If you are close to seventy and have retired early this can make quite a difference. To calculate how much you would gain from this go to www.esplanner.com for a downloadable program.

Please note that it is important that you do this as soon as possible. The Social Security Administration is considering eliminating this provision because they view it as a loophole.

So if you can, act quickly to take advantage of this opportunity.

Be aware that if you visit your local Social Security office and are told there is no option to repay or to reapply until after seventy this is not true. You may choose to repay or to reapply at any age. If your local office gets this wrong, have them call Social Security’s Office of the Actuary. The Social Security system is so complex that it is easy to get different answers to the same questions.

If you have any questions or are considering filing bankruptcy please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer your questions without obligation. Remember, I am here to help.

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This week USA TODAY reported the results on their Gallup Poll of July 8-11. They polled 1,020 people. They asked the non-retired adults whether they thought the Social Security system would be able to pay them benefits when they retired. And they asked the retired adults whether they thought there would eventually be cuts in their social security benefits. It turns out that the public, after being battered by high unemployment and record home foreclosures, has less faith in the system than the estimation of the Social Security trustees. A notable sixty percent of non-retirees believe that Social Security will not be able to pay them retirement benefits. Fifty-six percent of retirees predict their benefits will be cut.

According to USA Today “last year, they [Social Security trustees] projected the system would begin running in the red in 2016, as the Baby Boom generation retired, and the trust fund would be exhausted in 2037.Even then, Social Security-which celebrates its 75th anniversary next month-could finance about three-fourths of current benefits through the payroll tax.”

Alicia Munnell, director of the Center for Retirement Research at Boston College, says that, “the fear and distrust as a result of the financial collapse and the Great Recession has spilled over into people’s expectations generally, that you can’t count on anything.”

It is clear this poll is a reflection of many people’s serious economic concerns. If you are one of those struggling economically please feel free to call me with any of your questions. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer your questions without obligation. Remember, I am here to help.

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I read Robert Frank’s article on the Wall Street Journal last week and had to share with you the story it told. Apparently last summer a Seattle real-estate tycoon, Michael R. Mastro filed Chapter 7 bankruptcy with liabilities of $570, 000,000.  And now here comes the interesting part of the story. After filing he went on vacation to Italy, Paris, Switzerland, New York, Palm Springs, Calif., and Jackson Hole, Wyo. He dines at the ritzy Seattle restaurant Canlis for $2,900 per meal. He drives a Rolls-Royce and Bentley, which cost $8,000 a month. To top it off he continues to live in his $15,000,000 home.

Mr. Mastro’s attorney told the Seattle Times that some of the money comes from his friends and his wife and some from the earnings he has made as a real-estate consultant since the bankruptcy filing. According to the trustee for the bankruptcy, James Rigby, Mr. Mastro is hiding assets and wealth from creditors. “As part of the bankruptcy case, he is going after Mr. Mastro and his assets to try to recover money for Mr. Mastro’s investors,” Robert Frank reports.

To some extent Mr. Rigby succeeded in ferreting out some of the hidden assets. Agents found 10,000 one-ounce silver coins in a wall behind a furnace vent in Mr. Mastro’s son’s basement. And surely there are other undiscovered assets. The case will probably take a long time to resolve.

This story should give you a fairly clear picture of how many wealthy people handle bankruptcy. They have more opportunities to shift their wealth in such a way as to keep it safe from creditors. Obviously, I am not suggesting anyone behave in this manner, but I am sharing what bankruptcy can look like for the rich and famous.

If you have any questions or are considering filing bankruptcy please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer your questions without obligation. Remember, I am here to help.

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There is an unemployment extension bill that was voted on yesterday in the Senate. The bill would permit unemployed workers, in states with highest unemployment rates, to once again receive up to ninety-nine weeks of aid. Benefits would be renewed retroactively from June 2, and would be offered to workers through the end of November.

The bill, according to Gregg Hirt and Sara Murray of the Wall Street Journal online, “cleared a hurdle in the Senate Tuesday, ending weeks of stalemate that had led to the expiration of federal aid to millions of jobless Americans amid a debate on the legislation’s cost. In a vote chiefly along party lines that highlighted concerns over how to pay for the bill, the Senate broke a filibuster led by Republicans and set the stage for a full Senate vote on the legislation, which could come as soon as Wednesday. It is expected to pass the Senate and would need approval by the House, which is also expected. President Barack Obama is expected to sign it into law swiftly after it arrives at the White House.”

Congress allowed long-term benefits to lapse in June, leaving more than 2.5 million unemployed cut off from benefits. Despite the slowly improving labor market, the country’s unemployment rate is still at 9.5%. Almost half of all unemployed workers have been without a job for greater than half a year. Obviously, this has pushed many people into a desperate economic condition with the only reasonable choice being to file bankruptcy.

If you have any questions or are considering filing bankruptcy please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer your questions without obligation. Remember, I am here to help.

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In an article written on Salon.com last week, Christy Corp-Minamiji wrote about the loss of her beautiful family home. It was a home she and her husband had worked hard on and were proud to call their own. When the foreclosure crisis first hit the country, Christy says she “shook her head at irresponsible Americans.” She never thought her family would be one of those who would be impacted by the downturn in the economy. But as it turns out large animal veterinarians are not immune to recession. While the real estate market collapsed her clients had to start cutting back. Her weekly income sank below that of a fast food employee. Debt had begun to be a problem since her maternity leave following the birth of her oldest daughter. Each subsequent maternity leave added to their debt. But they had always managed to survive one way or another. Then this year something changed. The debt became unmanageable. She asks herself whether it was the new water heater, the washer, the dryer, truck repairs, or school tuition that put the debt over the top and concludes it was impossible to trace the origin of the problem. In the end, like so many others there was no way to pay the bulk of their bills.

“That’s it, really,” Christy writes. “Someone loses a job, takes out a bad loan, falls ill, whatever. They can’t pay their debts. They lose their house, their home.”

She considers her family among the lucky ones since she and her husband have each other, are both employed and are both educated. Her family will withstand the loss of their home. “I am not belittling those who have no home; on the contrary, I have seen how little separates our fates.” She advises that you “use care when you ask yourself what sort of people could let a beautiful old place like that go to hell. Be careful, because this is the answer: people like you.”

If you have any questions or are considering filing bankruptcy please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer your questions without obligation. Remember, I am here to help.

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On April 22^nd the Federal Trade Commission met with the U.S. Senate Committee on Commerce, Science, and Transportation. The FTC reported that they will continue their attempts to protect financially burdened consumers from fraudulent debt relief scams.

FTC Commissioner Julie Brill “described the FTC’s law enforcement actions, a rule change the agency has proposed to combat deceptive and abusive telemarketing of debt relief services, and the FTC’s ongoing work to educate consumers about debt relief options and how to avoid scams.”

Since 2003, the FTC has brought twenty lawsuits against debt-relief companies and more investigations are under way. Brill’s testimony presented the FTC’s proposal to amend its Telemarketing Sales Rule to apply to instances when a consumer calls a telemarketer in response to debt-relief advertising. The suggested change in the Telemarketing Sales Rule would prohibit telemarketers from making fraudulent claims and would require salespeople to disclose more information to potential customers. In addition, the proposed change would prohibit any debt-relief company from requesting funds or receiving payment before delivering the services it promises. Another action the FTC proposed was an education campaign to assist consumers in managing their finances and in avoiding fraudulent practices.

Let’s hope that the Federal Trade Commission’s proposed changes will be put into effect and in that way help protect vulnerable consumers. In the meantime, if you want to find a reputable nonprofit credit counseling agency make certain to look for one that is a member of the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

 If you have questions or are considering filing bankruptcy please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer your questions without obligation. Remember, I am here to help.

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In this blog I want to explore the basic reality regarding debt-relief companies. In an attempt to do just that the Executive Director of the Maryland Consumer Rights Coalition, Marceline White, went shopping undercover at a few online debt-relief companies. She reports being disturbed by what she discovered. She found it to be obvious that the individuals who identified themselves as financial counselors were no more than salespeople whose only interest was in getting her to sign up with the company immediately.

She stated that “when you ask them direct questions, they don’t really respond with direct answers. They follow their script and they tell you things that sound great. They would often tell me that I could cut my debt in half, but they couldn’t give me many detailed specifics about how the program would work or what a fee structure would look like.”

White surmised in a report that was released in April that: “Instead of getting the promised services, consumers typically end up with less money, more debt, a worse credit score, and dwindling options.”

In April of this year, the U.S. Government Accountability Office also asked investigators to contact twenty companies posing as potential customers. The GAO report states it discovered “fraudulent, abusive and deceptive practices . . . such as claiming unusually high success rates for their programs-as high as one hundred percent.” The report concludes that FTC and state investigations have typically found that less than ten percent of the clients successfully complete these programs. Obviously, this practice is unacceptable. Possible solutions will be discussed in the next blog.

In the meantime, if you have questions you need answered or are considering filing bankruptcy please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer your questions without obligation. Remember, I am here to help.

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In today’s blog I want to distinguish between commercial relief companies and traditional nonprofit credit counseling agencies. They are significantly different. Non-profit agencies teach you how to better manage your money and how to gradually pay off your debts. Whereas commercial debt-relief companies make claims of being able to help you dramatically reduce your debt, but whether they actually do or not is questionable. A nonprofit credit counseling service bases your monthly fee on your income. In contrast to most debt relief companies who charge fees that are often equivalent to anywhere from fourteen to eighteen percent of your total debt. They also expect their money-or a large percentage of it-in advance.

Debt relief companies frequently tell you to stop paying your bills. You are then instructed to make monthly deposits of a certain sum into a separate bank account set up by the company. Once there is enough money in the account, the company promises that they will negotiate a single payment settlement with your creditors. The problem is that during this time the interest charges and penalty fees keep piling up on your unpaid accounts. Gail Hillebrand, a financial services expert at Consumers Union, warns that “you will definitely wind up in worse shape if you are paying your bills and then stop paying them. Creditors get tired of waiting and they will give your account to a collection agency or sue you.”

The debt-relief industry insists that the accusations are unfounded. According to the Association of Settlement Companies its members saved consumers approximately $640 million in 2009. The association’s vice president, Robert Linderman, insisted in a letter to the FTC that his industry treats its clients “respectfully and responsibly while producing significant benefits for consumers that far outweigh the cost of realizing those benefits.”

In Thursday’s blog I will further explore debt -relief companies. In the meantime, if you have questions you need answered or are considering filing bankruptcy please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form. I will answer your questions without obligation. Remember, I am here to help.

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