Among her creditors are the city's water department, the school some of her children attend and her father. She also fell behind on the rental payments for her home. According to reports, she owes approximately $1 million, more than 20 times the worth of her reported assets.
]]> Suleman faced financial difficulties before the birth of her octuplets, living with her mother and six younger children in a three-bedroom house that was in foreclosure. She is currently raising her children with the help of food stamps and Social Security disability benefits. Though she has earned money for sporadic media appearances since the birth of her eight children, she has been unable to remain gainfully employed. Suleman is reportedly looking forward to the fresh start filing for Chapter 7 bankruptcy provides.While Suleman's situation is very unique, many new parents find themselves in difficult financial situations. People often find that it may be more possible to swim through waves of debt, or survive a tough financial blow, if they are not busy raising children at the same time.
A Chapter 7 bankruptcy filing wipes out most debts and even certain taxes. It also puts an automatic stay on proceedings such as repossession and wage garnishment. In Chapter 7 bankruptcy, the court appoints a trustee to sell the filer's assets to discharge debts. A filer can rest assured that many major household items will not be sold off and an experienced bankruptcy attorney can file a reaffirmation agreement with the court to ensure filers retain possession of their house or automobile.
Although she found it to be a difficult decision, as anyone would, Suleman has said that her filing for bankruptcy was in her children's best interest.
Source: Washington Post, "'Octomom' files for bankruptcy, owes $30K in late rent payments," May 1, 2012
]]>When Arizona residents do not pay their credit card bills, a secondary debt collector can purchase the debt from credit card companies. These secondary companies pursue customers aggressively in order to collect the debt. Some people end up paying debt they do not even owe, just to put a stop to the creditor harassment.
]]> A bill proposed in the Arizona House would make it even easier for debt collectors by lowering the level of proof they have to display to verify that debt is owed. If the proposed bill becomes law, it might make it more difficult for consumers to dispute debts. Debt collection agencies are reportedly lobbying for the bill to pass in Washington.Creditor harassment, wage garnishment and repossession are just some of the issues Arizona residents struggling with debt have to face. In order to gain a fresh start and eliminate harassment, filing for bankruptcy or seeking other debt relief options may be wise.
There are certain income requirements that must be met in order to qualify for Chapter 7 bankruptcy, but those who do not may still be eligible for Chapter 13. In such filings, it is sometimes possible to retain possession of assets, such as the residential home, car, retirement plans and household items, subject to certain restrictions. At the end of day, filers ease their financial burden and can start fresh.
Source: KTAR.com, "Arizona bill could lend hand to debt collectors," Jim Cross, April 30, 2012
]]>Sixty percent of NBA players are insolvent within five years of concluding their careers and 78 percent of NFL players are either facing financial difficulties or are bankrupt within two years of ending their careers. Though all athletes from all sports can face financial woes, basketball and football players have a disproportionate share of financial difficulties.
]]> As a result of the recent NFL draft, more than 200 college students stand to welcome an instant change in lifestyle. Pro athletes differ from other professionals as the former have to downsize their finances after a few years of playing, whereas in other careers professionals anticipate an increase in their incomes and therefore increase their spending.The average professional football player's career is slightly more than three years, yet they live well above their means. Besides buying big houses and fancy cars, they pick up expensive habits such as gambling and drinking. Even though football leagues provide workshops to deal with a player's addictions, their effectiveness is questionable. Some athletes collect rare cars and others generate huge tabs at jewelry stores. They also end up making spousal and child support payments, significantly cutting their disposable income.
Athletes also fall prey to major financial scams, such as the case where several members of a football team lost $20 million collectively before the fraud came to light.
Any person can face financial difficulties for a variety of reasons. Those struggling with mounting debt should not hesitate to contact a personal bankruptcy lawyer to discuss the available options to help them alleviate their financial concerns.
Source: Tucson Citizen, "Pro athletes can often struggle financially," Russ Wiles, April 21, 2012
]]>With more students falling behind on their payments or taking out student loans, student loan debt is on the rise and it surpassed $1 trillion in 2011. Private borrowers are reportedly falling behind on payments at twice the rate of that before the recession.
]]> Unfortunately, students in their early 20s or late teens are making difficult decisions that may have financial implications on the rest of their life, as filing for bankruptcy does not discharge student debt.Part of the problem may stem from the fact that all students are not given adequate loan counseling and they therefore do not have a clear grasp of what they are taking on. Online counseling does not require a lot of attention, and some students surely zip through this process. Colleges that hold one-on-one counseling reportedly find that their students make more prudent decisions.
When overwhelming loans catch up to students, they may elect to defer their payments during hard times but then they could face steep forbearance and interest rates that increase their balances. The only way student loans can be discharged through bankruptcy is through showing undue hardship, a test that courts apply very stringently.
College graduates who are struggling with student loan or other debt may want to consult an experienced personal bankruptcy attorney to discuss what options are available to them. These students should not be afraid to take steps to ease their financial burdens.
Source: Deseret News, "To pay off loans, Grads put off marriage, children," Biaze Billock, April 18, 2012
]]>However, Arizona residents may not be aware that more than 1.4 million Americans filed for bankruptcy in 2011, amid difficult economic conditions. Four out of five bankruptcies were caused by events beyond the control of filers, according to research conducted by Texas A&M University. Medical debt played an important role in bankruptcies, with more than half of them involving debt of more than $5,000.
]]> The good news is that lenders are aware that a bankruptcy does not truly reflect the filer's management of finances.Contrary to myths, bankruptcy filers can rebuild their financial lives. For lenders, a filer becomes much less risky after their bankruptcy discharge because they are barred from getting bankruptcy protection again soon after the discharge.
More good news is available to Arizona residents--it is possible to apply for credit cards after bankruptcy proceedings. Those who have had trouble managing credit cards may want to seek credit counseling before applying for cards, but some banks do offer low annual fees for an unsecured credit card. Other banks allow borrowers to deposit a low security amount and a low annual fee and they offer a facility to reimburse their deposit if the borrower manages their account sensibly.
For those borrowers who have a strained relationship with financial institutions, other options may be available. For example, some financial institutions offer reloadable prepaid cards with low monthly service fees and a bill payment service. If users of the reloadable cards demonstrate that their budgeting habits have changed, they may become eligible for credit cards with higher credit limits.
Arizona residents considering filing for personal bankruptcy should be aware that it can alleviate the financial burdens they are facing and that a person can be financially successful after bankruptcy.
Source: Fox Business, "Best credit cards after bankruptcy," Curtis Arnold, April 9, 2012
]]>In states where home prices have dropped the most, such as Arizona, more and more residents are concerned with keeping their lines of credit open rather than preserving their homes. With the threat of looming foreclosure and underwater mortgages, homes are now viewed as liabilities rather than assets.
]]> In the past, Americans were more likely to default on their credit cards, then their auto loans and lastly their mortgages. However, now they are paying their credit card bills first and their mortgages last. This is demonstrated by the fact that the number of homeowners making their mortgage payments at least 60 days late rose in the later part of last year.However, this may not be the trend--it may be because people increased their credit card usage in the holiday period. The inverse relationship between mortgage defaults and credit card delinquencies was seen in 2008 as well, when defaults on mortgages soared and credit card defaults declined.
Americans are becoming more conservative with their credit card usage. Not only are they paying their bills on time, they are also making payments to reduce their balances. According to the TransUnion director, consumers are trying to protect their access to credit. With unemployment on the rise and an uncertain economy, people want to ensure they have credit available if they ever need it.
Homeowners forced to choose between credit card default or mortgage default may want to think about the benefits of filing for personal bankruptcy. Because credit card and other debts can be discharged through a personal bankruptcy filing, it may mean fewer mortgage defaults and more homes saved.
Source: Fox Business, "Why Consumers are choosing to pay credit card bills before mortgage," Gall Buckner, March 26, 2012
]]>It may be possible that government-sponsored entities embrace the deal. If this is so, many think it could be a tremendous boon to the housing market, not to mention Arizona residents struggling with mortgage payments or other overwhelming debts. But unless or until Right to Rent becomes the norm, some of these homeowners may want to consider filing for bankruptcy or talking with a bankruptcy attorney about debt relief options. A bankruptcy professional can offer advice on how it may be possible for Arizona residents to retain possession of a house and other assets.
]]> The long-awaited new program, named Right to Rent, has been implemented in three states with less than 1,000 borrowers. It is a step beyond those plans in which banks discharge borrowers' mortgages when they leave the house after handing in the keys. This program also helps homeowners protect their credit ratings.This new measure goes hand-in-hand with the new program to assist those with underwater mortgages by reducing their principal amount. More and more incentives are being offered to lenders to reduce principal; the step is not uncommon among banks modifying their loans by reducing principal. According a recent study, reducing the amount homeowners owe on their Fannie Mae and Freddie Mac mortgages would even save taxpayers money.
It may be possible that government-sponsored entities embrace the deal. If this is so, many think it could be a tremendous boon to the housing market, not to mention Arizona residents struggling with mortgage payments or other overwhelming debts. But unless or until Right to Rent becomes the norm, some of these homeowners may want to consider filing for bankruptcy or talking with a bankruptcy attorney about debt relief options. A bankruptcy professional can offer advice on how it may be possible for Arizona residents to retain possession of a house and other assets.
Source: Bloomberg Businessweek, "Foreclosures still haunt the housing market," Karen Weise, March 23, 2012
]]>Students at for-profit colleges have a particularly high rate of default, with 15 percent of students at these schools defaulting on their loans in 2009. With accumulating payments, 5 percent of all payments past due are those of Americans above 60 years of age.
]]> College loans are proving to be the next debt bomb, according to news reports. Approximately $870 billion is owed in student loans across the country. This amount currently exceeds auto loans and credit card debt. Some lawmakers are starting to recognize these alarming figures by sponsoring legislation to tackle these hurdles.Through legislation recently proposed in the U.S. Senate, bankruptcy would now also discharge private college loans. However, students would still be responsible for paying off their federal loan debt. According to supporters of the legislation in the National Consumer Law Center, the best solution would be to allow all student loans to be discharged.
Another change in college loan debt may arise when a five-year interest rate reduction in federal subsidized loans expires on July 1. The interest rate on Stafford Loans will double, from 3.4 percent to 6.8 percent.
Senators working to pass the bankruptcy law may attach it to another bill that would maintain the interest rate on student loans at the current level.
Source: Washington Post, "Durbin targets private student loan defaults," Ylan Q. Mui, March 20, 2012
]]>As the value of many Arizona homes has reduced, homeowners are increasingly feeling helpless in the face of their underwater mortgages--when the amount remaining on their mortgage is higher than the value of their home. Although the government has introduced revisions in the Home Affordable Refinancing Program, it leaves most people unprotected as it applies only to federally insured loans.
]]> In such times, it is important for homeowners to know all of the options that are available to them. They can apply for a loan modification, a short sale, refinancing or bankruptcy. Among the possibilities is also a strategic default, where the house can be returned to the bank through a normal foreclosure on the homeowner's terms, or through a deed during foreclosure proceedings.One way to halt foreclosure proceedings is by filing for Chapter 7 bankruptcy. The filer will receive an immediate stay on foreclosure proceedings. In fact, filers can often keep the house they live in provided it has a certain amount of equity. Retirement savings and most personal assets are also usually exempt in a bankruptcy.
Many of those struggling with debt may need to take control of their finances and restart their life. Those hesitant to file for bankruptcy or pursue another one of these options due to the stigma attached should keep in mind the potential benefits of beginning their life afresh, away from creditor harassment and the burdens of underwater mortgages.
Source: Atlanta Journal-Constitution, "Nothing wrong with default," Michael R. Bang, March 13, 2012
]]>However, there is good news for Arizona residents, as the figure is still 12 percent lower than that of February 2011. As the economy has improved over the past two years, the number of people filing for bankruptcy has also decreased. Prior to February, eight of the last 10 months saw decreasing figures.
]]> More than 80 percent of bankruptcy proceedings in February were filed under Chapter 7. Chapter 7 bankruptcy discharges practically all forms of debt, with only a few exceptions, including student loans. Not all of the filer's assets are used to pay the creditors: there are some household possessions that the filer can retain in the process.Bankruptcy filings generally rise in February because many people then have their tax refunds to use for filing expenses as well as to pay student loans and other debts that will not be discharged in bankruptcy. If the filing takes place before income tax refunds are received, the money generally goes to pay debtors claims.
Certain income requirements must be met in order to qualify for Chapter 7 bankruptcy; for those who do not meet the means test, Chapter 13 bankruptcy may be an option. Most of the 20 percent of remaining bankruptcy proceedings were initiated under Chapter 13. Chapter 13 provides similar debt relief as Chapter 7, and filers can make court-supervised payments, depending on their ability to pay.
Source: The Arizona Republic, "Phoenix-area bankruptcies rise in February," Russ Wiles, March 5, 2012
]]>A foreclosure settlement between the federal government, five major banks and 49 states is also aimed to reign in the crisis and punish the banks, but this settlement has faced criticism for allowing those responsible to avoid accountability by buying their way out of real penalties.
]]> Arizona is one of several states that have introduced bills to allow state-owned banks to refinance mortgages that are worth more than the actual market price of the house at the time.Some have called Arizona's bill revolutionary as it provides relief to those homeowners who are underwater--those who are making their mortgage payments but the amount they owe is more than the current market price of the property they own.
The bill would provide for a new body, the Arizona Housing Finance Reform Authority, to substitute the homeowner's current mortgage with a new one. The refinancing measures of the mortgage are reportedly such that in the end it would not cost the state anything; they are financed by floating revenue bonds derived from payments made by the homeowners, and the Arizona Home Insurance Fund would insure against any losses faced.
The Arizona Bill is facing skepticism as it goes against the law of contracts because losses are shifted to banks rather than being borne by those who have entered into the contract. However, the bill's supporters say the new measure would provide much needed relief to homeowners who are facing foreclosure in Arizona despite being current on their mortgage payments.
Even if the bill is passed in Arizona, homeowners may need other remedies such as Chapter 7 or Chapter 13 bankruptcy. By filing for personal bankruptcy under Chapter 7, foreclosure proceedings can be stayed automatically for a number of months. In addition to this, the added benefit for filers of Chapter 7 bankruptcy is the immediate relief from most debts.
Source: Huffington Post "New State Bank bills address credit and housing crisis," Ellen Brown, Feb. 27, 2012
]]>The company was plagued by unfortunate events after one of their manufacturers refused to complete its orders, and a substantial proportion of their orders were stranded in transit by the failure of a freight carrier. As a result, the company had to terminate its operations, despite being in debt to industry suppliers.
]]> As per Chapter 7 proceedings, a trustee will be appointed to handle the claims by selling the assets of the company. When the process ends, the business will close its doors forever and cease to exist.Unlike Chapter 7 bankruptcy for businesses, people who file for personal Chapter 7 bankruptcy protection will begin the process of rebuilding their lives, as it wipes out most of personal debts. There is an income requirement that must be met in order to become eligible to begin Chapter 7 proceedings.
Also known as liquidation bankruptcy, its biggest advantage is the discharge of practically all debts. Debtors can gain immediate protection from the harassment of creditors, wage garnishment and repossession when they file for Chapter 7 bankruptcy, as it puts an automatic hold on all such actions.
Chapter 7 bankruptcy provides debtors with a new beginning in difficult economic times. If someone is under financial pressure due to piling debt and is unaware of his or her options, it may helpful to consult an experienced bankruptcy attorney to discuss various possibilities for debt relief. An attorney can also alleviate some common concerns related to the possession of assets.
Source: Furniture Today, "Online retailer GreatPricedFurniture.com in Chapter 7 bankruptcy," Clint Engel, Feb. 22, 2012
]]>Chapter 7 bankruptcy protection is the most common type of bankruptcy, and with certain exemptions, results in wiping out all bills. In order to file under this chapter, there are certain income requirements that must be met.
]]> The actor's manager stated that the actor filed for personal bankruptcy as a result of unfortunate events, associations and choices. This will clear his past debts, giving the actor a much needed fresh start with his partner and son.Many people have lists of creditors similar to that of Busey's and are overwhelmed with their debt. They deserve to utilize this legal tool in order to begin their life afresh, without fear of harassment, repossession or garnishment of wages. However, many people, including residents of Mesa, Arizona, are hesitant to file for Chapter 7 bankruptcy, as they are uncertain about which of their possessions they can keep once the trustee begins to sell them to fulfill their debts.
If that is the case, meeting with an experienced bankruptcy attorney may alleviate many concerns a debtor may have. The filer may be able to keep most of his or her assets, such as the household items, a vehicle and in some instances, even the house. In certain situations, taxes are even discharged. If a potential filer does not qualify for chapter 7, other debt relief options such as Chapter 13 bankruptcy can be pursued to help relieve the stress of debts and put the debtor back on the track to financial stability.
Source: Reuters, "Gary Busey Bankruptcy Shocker: Actor Files for Chapter 7 Protection," Tim Kenneally, Feb. 9, 2012
]]>The new numbers show that fewer Americans are being laid off from work, and more are finding jobs. According to the Washington Post, statistics also suggest the housing market is picking up steam. However, we know that even as new jobs are being created and inflation is remaining relatively tame, many people in Mesa and throughout Arizona are still in genuine need of debt relief.
]]> Unemployment benefit applications have been declining for five months in a row, but there are still people who are in need of these benefits. And, even some of those who have benefited from finding a new job may still be swimming in debt that was incurred during the recession or the housing market's collapse.While the news is certainly encouraging for the economy at large, it probably does not offer enough comfort to those who are out of work and struggling to make ends meet.
News that the economy is shifting gears is good to hear, but inevitably, it amounts to too little, too late for many Arizona residents. Those who are struggling with debt may want to have a discussion with a bankruptcy attorney about what debt relief options might be available to them. For those who are good candidate, bankruptcy protection allows you to settle debts, and put an end to lawsuits, wage garnishment and creditor harassment--allowing you to head into the economic recovery debt free, with a fresh start.
Source: Washington Post, "Drop in unemployment claims points to another month of strong hiring, lifting overall economy," Feb. 16, 2012
]]>The settlement comes after a year of negotiations between the nation's five largest mortgage servicers, the federal government, and attorneys general from 49 states. The mortgage servicers will pay $25 billion to settle the suit which alleged foreclosure abuses, including improperly dealing with property owners who sought mortgage relief.
]]> The settlement is an effort to hold mortgage servicers accountable for a variety of abuses that led to the housing market's collapse as well as provide aid to about 2 million homeowners.The settlement could grow to as much as $45 million if nine additional mortgage servicers sign it.
Of the $25 billion, $17 billion will go to current homeowners who need help to prevent foreclosure; the money will be distributed by reductions in the principal still owed on mortgages. Another $5 billion will be paid to the states to fund foreclosure prevention efforts. About $3 billion will go to refinancing moves that will lower homeowners' interest rates and about $1.5 billion will be paid out to certain homeowners who were affected by improper foreclosures.
Arizona also filed a separate lawsuit against Bank of America in 2010. A news report today stated that Bank of America has agreed to pay Arizona another $10 million to settle that suit. Some of this will go to homeowners who were affected by the bank's foreclosure tactics, and some of it is earmarked for those who are currently underwater on their mortgages.
About 11 million U.S. homeowners currently owe more on their mortgages than their house is worth, according to news reports.
Of the larger, national settlement, hundreds of thousands of U.S. homeowners should receive some money. The checks will likely be modest, between $1,500 and $2,000, according to reports.
While the settlement is expected to foster the housing market's recovery, it has been predicted that a wave of home foreclosures will come first. This is due to a backlog that developed last year while lenders were in negotiations. Foreclosures that could have happened last year will come through this year, and as many as 25 percent more foreclosures are expected in 2012 than in 2011.
Source: Bloomberg, "Foreclosure Deal to Spur U.S. Home Seizures," Prashant Gopal and John Gittelsohn, Feb. 9, 2012
Source: East Valley Tribune, "Arizona to get $1.6 billion in foreclosure abuse settlement," Howard Fischer, Feb. 9, 2012
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