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.

Continue Reading

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.

Continue Reading

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.

Continue Reading

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.

Continue Reading

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.

Continue Reading

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.

Continue Reading

Many people with debt wonder if bankruptcy is the proper solution for their situation.  Unfortunately, there are several myths about bankruptcy and some people think you need to be behind on your payments before you can file. The reality is that more people need to file bankruptcy long before they know it.

The number one warning sign that someone has too much debt is when the total of unsecured debt is more than 1/3 of gross annual income. Unsecured debt is credit cards, personal loans, lines of credit, medical bills, etc. When unsecured debt is more than 1/3 of gross income, the debt will never be paid off. At this point, you are only servicing the debt; i.e., making interest payments but not reducing the principle. Suppose you make $100,000 per year and your credit card debt is $50,000.  This is more than 1/3 of your gross income, and with this debt-to-income ratio, you will never pay off the debt-you’ll only make interest payments.

Bankruptcy is a financial opportunity to cure a debt problem. Imagine if you did not have credit card debt, you could take your monthly payments and put them into a savings account. The monthly payment for $50,000 of unsecured debt is approximately $2,000 per month due to the high interest rates on credit cards. In two years of saving your credit card payments, you would have $50,000 in the bank instead of a credit card balance that still remains due to the high interest rates.

No one wants to file bankruptcy. However, one needs to make an informed financial decision when it comes to debt. If your unsecured debt is more than 1/3 of your gross annual income, then call me, Kevin Heupel, at Colorado Bankruptcy Help for more information. You can reach me at 303-381-4900 or submit one of the free-consultation forms without any obligation. I am here to help.

Continue Reading

William Barrett posted an article on the Forbes website regarding planning for retirement at fifty that has some valuable information that I want to share with you. If you are in your fifties and have not begun to save for your retirement, don’t panic.  There is a way to enjoy a comfortable retirement without having to work through your “golden” years. You might have to make some considerable changes in your lifestyle now, but, as Barret says, “they’re almost certain to be less painful than what might be required in 10 or 20 years if you don’t start now.”

The first step you will need to make is saving the money needed to invest. You need to start saving at least ten percent of your gross income. There essentially are two ways to save. One involves paying down high-interest-rate debt that isn’t already tax-deductible, particularly credit-card debt. If you’re paying twenty percent on your credit card, essentially you get an immediate twenty percent return for every dollar you pay off.

The second way is blatantly obvious, simply put the money aside. This is where the tax code will be of assistance. Invest in your company’s 401(k) plan in which contributions are excluded from your current year’s income. In a twenty-five percent bracket, if you contribute $10,000 your taxes will be reduced by $2,500. “Federal law allows workers who will be 50 by the end of the year to salt away up to $22,000 of their own contributions, pre-tax, for 2010.” Investments in these retirement funds grow with a tax-deferment until you withdraw them, at which time they will be taxed at standard rates.

If there is no 401(k) plan available at your place of employment, open an individual retirement account at a mutual fund company or brokerage. You should be able to save up to $6,000 pre-tax a year. If you do have an employer pension plan, no matter how limited, “then you can only deduct the full contribution if your modified adjusted gross income is $89,000 or less for a couple, or $55,000 or less for a single.” But you can make a nondeductible contribution of $6,000 per person to a Roth IRA with modified adjusted gross income of up to $166,000 per couple and up to $105,000 for a single person. The good news is that a Roth IRA will grow without being taxed, and all withdrawals that you make during retirement are tax free.

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

Continue Reading

NPR posted an associated press article this week that stated the unemployment rates dropped in April for more than ninety percent of the country’s 372 largest metropolitan areas as hiring picked up around the nation. The jobless rate fell in 346 areas according to the Labor Department. The rate increased in only twelve regions and remained level in fourteen.

This was much better than March, when unemployment dropped in only 257 areas and increased in eighty-nine. The improvement was primarily seen in the Midwestern regions where there are significant manufacturing operations. Manufacturers, who added 44,000 jobs throughout the nation in April, are doing so as a result of increased overseas sales and efforts by retailers and other U.S. companies to restock their warehouses.

That is not to say that unemployment is no longer a problem. It is still widespread: fourteen metropolitan areas reported unemployment rates of fifteen percent or above in April. But the unemployment trend is going in the right direction since it decreased from the twenty-eight areas reported in March. The country’s economy produced a net gain of 290,000 jobs in April. But that growth did not manage to hold down the jobless rate, which increased to 9.9 percent.

The economic situation seems to be improving, but at a slow rate. So if you are unemployed and have been waiting to file bankruptcy in hopes of a change in your employment situation it may be a long time in coming. Please do not wait until it is too late to file. The damage done can be greater than necessary.

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

Continue Reading

There has been a lot of discussion about the state of the publishing business. If the local newspapers are any indication, there is a major problem. Last month there was an article in the Denver Business Journal that the parent company of business newspapers in Boulder and Fort Collins-Brown Media Holdings Co./Brown Publishing Co.-has  filed for Chapter 11 bankruptcy protection. In the Chapter 11 filing, Brown Publishing Co. stated that it intends to sell its assets that are located in 10 states to an unnamed bidder of their choosing according to the Associated Press.

The Brown Publishing Co. bankruptcy filing is the most recent in a series of Chapter 11 filings involving Colorado newspapers that have occurred in the past year. “In March, Affiliated Media Inc.-the holding company of Denver-based MediaNews Group Inc., which in turn publishes The Denver Post, the Camera of Boulder and several other Colorado papers-emerged from Chapter 11 bankruptcy protection after the bankruptcy court approved a ‘pre-packaged’ plan that allowed it to greatly reduce its debt.” And in addition to the abovementioned cases, the publisher of The Gazette in Colorado Springs, just exited a Chapter 11 bankruptcy case last week.

Be aware that this may be a sign of things to come for other forms of hard-copy publishing. Before too long, reading may no longer involve paper, particularly when it comes to the news.

If you have any questions, please contact me. I am here to help. Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form.

Continue Reading