To further explore an issue presented in a prior blog, I want to examine the situation with debt-relief companies more closely in the next few days. As most of us our well aware, millions of people are overcome with debt due to the economic crisis of the past few years.  When someone is overburdened by debt it is a time of great vulnerability. It is at these moments that certain types of businesses prey on people. You all have seen the all too seductive ads, such as: “Be debt free in as little as 24-48 months!”or “Cut debt 60% -set your own payment schedule.” They all make it seem easy to manage the major source of your economic stress.  

Unfortunately, many of these debt-relief agencies are guilty of fraudulent practices. Linda Sherry of Consumer Action reminds us that, “These are for-profit companies and they are looking to profit off your vulnerability.”  And Susan Grant, the director of Consumer Protection at the Consumer Federation of America agrees with this assessment when she states that “Desperate consumers are paying thousands of dollars with no guarantee that even one penny of their debts will ever be settled.”  To make the matter even worse, some people who sign up with debt-relief or debt-settlement companies end up with more debt than when they started, according to the Federal Trade Commission. “To be sure, some debt relief services do help consumers reduce their debt loads,” FTC Commissioner Julie Brill reported to Congress, April of this year. “In too many instances, however, consumers pay hundreds or thousands of dollars for these services but get nothing in return.”

I will continue to explore debt relief tomorrow. 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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As I keep repeating to those of you needing to file bankruptcy, you are not alone. The economic situation continues to be difficult, despite reports of improvement in the unemployment rate. There are few jobs available, the values of homes are dropping drastically, and the cost of living continues to rise. According to the American Bankruptcy Institute “research by the Federal Reserve indicates that household debt is at a record high relative to disposable income.” No wonder many people find themselves heading toward bankruptcy, they have no other choice.

The American Bankruptcy Institute also stated that bankruptcy cases have risen by fourteen percent during the first half of 2010. The filings through June of this year totaled 770,117 compared to 675,351 last year for the same time period. The American Bankruptcy Institute pointed out that bankruptcy cases totaled 126,270 in June alone, which is a jump of eight and a half percent from the 116,365 total of June of last year.

The executive director of the institute, Samuel Gerdano, reported in a press release that “years of rising consumer debt and low savings rates, combined with the housing and unemployment crisis, are causing bankruptcy levels not seen since the 2005.” In comparison to the 2005 bankruptcy filings which totaled more than two million, Gerdano expects there will be greater than 1.6 million new bankruptcy cases by the end of 2010.

If you have questions you need answered or are now considering bankruptcy, please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy attorney, 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 was an article by the IRS Relief Administration last week that discussed the fact that many U.S. tax professionals, as well as U.S. taxpayers, would incorrectly say that Federal income taxes cannot be discharged through filing for bankruptcy. The reality is that there are conditions under which people may find tax relief at the time that they file bankruptcy.

Addressing tax problems during bankruptcy is a complicated matter, which explains some of the confusion around the issue. Finding your way through the maze of U.S. Federal Bankruptcy codes, the code of the Internal Revenue Service, the lien and levy rights of the IRS and the protections for the taxpayer, can be very difficult. But tax relief through bankruptcy can be the best way to resolve a serious tax issue, as well as debt, and to put a stop to the intense collection activities of the IRS.

Filing Chapter 13 or Chapter 7 bankruptcy, as I have mentioned many times, will cause an automatic stay to be issued. All collection activities will be stopped, including bank account levying and garnishing of wages by the IRS. Once the stay has been issued you and your bankruptcy lawyer can decide to either attempt to get a discharge of your tax debt under a Chapter 7 filing, or you can reorganize your tax obligation by filing Chapter 13 bankruptcy. The Chapter you and your lawyer decide to file will depend on a variety of factors, including the amount of your total debts, your assets and your expected income in the future. In most instances, older tax debts can be discharged, but more recent tax debts often are treated like property taxes and are not dischargeable.

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 with no obligation. I am here to help.

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For those of you heading home after the Fourth of July weekend, please be sure to drive carefully. I hope you had a good holiday.

If you have had time during the holiday to think about your economic situation and have questions you need answered or are now considering bankruptcy, please feel free to contact me. Kevin D. Heupel, Colorado Bankruptcy attorney, 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 my many years of being a bankruptcy lawyer in Colorado, it has become clear that people react quite differently to the act of filing bankruptcy. There are those who are able to recognize that bankruptcy is an economic tool used to help remove excessive debt acquired due to events beyond their control. Their main reaction is one of relief.  

Others, however, experience a wide range of troublesome emotions. In my encounters with many bankruptcy clients, I often notice that they are anxious about filing bankruptcy. Part of their discomfort is due to the fact that they are entering a new unfamiliar experience. Another facet of their concern is being unsure how bankruptcy will impact their future. Also a person’s self-worth is often intertwined with his or her financial situation. Thus some people may experience embarrassment because they feel like a financial failure.

Over time, it has become clear to me that a bankruptcy attorney has several roles, one of them being to help clients accept bankruptcy as a fresh start-not just financially, but emotionally as well. Attempting to deal with overwhelming debt can be quite stressful. I try to never forget that a bankruptcy lawyer must be prepared to be both a legal and a psychological counselor.

I want to remind you of several things about bankruptcy:

• It is not the end of the world. Getting into debt can happen to the best of people, consider your debt a setback and not a failure. Look at bankruptcy as a course of action to solve a particular problem. Learn what you can from your mistakes and ask yourself what you might do differently in the future.
• Most bankruptcy cases proceed smoothly. After their hearing, many clients often say, “Is that it? Is it done?”
• You are not alone. Over the past five or six years, more than a million people have filed for bankruptcy annually.
• Once you file for bankruptcy, bill collectors stop calling and creditors will no longer be able to take further legal action against you. Many clients report that they can finally sleep well at night once they have started bankruptcy proceedings.
• There are ways to work on improving your credit after filing bankruptcy.
• You might find the idea ofconsulting with a bankruptcy attorney awkward, but the knowledge you will gain is important.A good bankruptcy lawyer will be patient and will help you to understand the bankruptcy process.

I try to make the bankruptcy process as easy and stress-free as possible. If you are in need of assistance 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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Harvard professor Elizabeth Warren created the Consumer Financial Protection Bureau that is at the center of the financial overhaul bill nearing final passage in Congress. She specializes in bankruptcy and consumer law. Senate Majority Leader Harry Reid, impressed by her pro-consumer stance, asked her to chair the congressional oversight panel for the Troubled Asset Relief Program in 2008. The program was the $700 billion lifeline the government instituted for the financial industry at the pinnacle of the financial crisis.

In an interview with Christine Dugas, from USA TODAY Money, Elizabeth Warren said she is still critical of the changes made to the bankruptcy law in 2005. She stated that “the best studies out there show that families who most need help cannot get access to the bankruptcy system and that the mortgage foreclosure crisis has been worse because of the 2005 amendments. The big banks made bankruptcy more expensive and helped fence out hundreds of thousands of families who most desperately need its protections. I would be happy if it had turned out that the amendments didn’t make a big difference, but the heartbreaking thing is that they did make a big difference.”

As a professor since the early 1980s, Elizabeth Warren studied bankruptcy. It helped her to comprehend the hollowing out of America’s middle class. She realized the degree to which the business model of selling debt to middle-class families has altered over the last twenty years. According to Warren “the credit card companies and other lenders moved to a tricks and traps pricing model. The fees, the interest rate hikes and all the other surprises in the fine print have left families increasingly vulnerable.” She observed hardworking, law-abiding middle-class families with financial difficulties that had to end in bankruptcy. This is what led her to examine the consumer credit market and to eventually arrive at the idea for the consumer financial protection agency.

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

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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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