Understand Your Rights Under Bankruptcy Law

We are coming out of the first Great Depression since the Great Depression of the 1930s. It will probably take another 8 years to fully recover. I knew in 1980 that we were headed for a Great Depression when I saw my first homeless person sleeping under a bush in downtown Pittsburgh. I tried to warn people that it was coming and tried to train my children so that they would ride the depression out better than most people. I was unemployed for 2 years in this depression. But I met people who were unemployed for up to 4 continuous years. Some people worked minimum wage jobs to get by. Others moved in with relatives.

 The Federal Government tried to distract the public from this economic collapse by causing 9/11, getting into 2 wars, and keeping the public on edge with its color coded warnings. But by 2008, the world economy including the United States collapsed and no one could hide that fact any longer. Many people’s way of life have been economically destroyed with no home or income but still having high debt that they cannot handle.

 I read newspapers from several ethnic groups to give myself a real balance story about what is going on in the world. Here is why I was laughing when the mainstream media claimed that Obama and Romney were in a “Dead Heat” running for President. I could not wait until election night to see how the media and the Republican Party were going to come up with a story explaining how Obama won in a “Land Slide.” They relied on statistician to tell them the outcome while the real story was in who wanted to come to the poles. When Republican Organizations have to trick people into coming to vote like they did in York Pennsylvania, then you know that “the Jig is up!” Keeping an eye on the hundreds of ethnic groups in America gives me an idea of how the economy will move in the near future.

The Black Press, in particular the Tri-State Defender Newspaper published an article about filing for bankruptcy for small businesses and individuals. I think that these two articles written by Carlee McCullough is a must read for everyone because you never know when you may need this information.  

http://www.tsdmemphis.com/index.php/business/9138-bankruptcy-chapter-7-fresh-start

 Bankruptcy & Chapter 7: ‘Fresh start’

Written by Carlee McCullough

 

 Now read the difference between Chapter 7 and Chapter 13.

http://www.tsdmemphis.com/index.php/business/9189-bankruptcy-chapter-13-wage-earner-advantages

 Bankruptcy: Chapter 13; Wage earner advantages

Written by Carlee McCullough

 If you are interested in articles from other Black newspapers, look up the New Pittsburgh Courier, Chicago Defender, The Michigan Chronicle, The Michigan Front Page, The Tri-State Defender, and The Atlanta Daily World. Just Google the online newspapers on the Internet.

Part 3: How to Finance Your Car

 
I see so many people taken advantage of when buying a car that it is not even funny. These people are usually the young, the poor, or the uneducated. Some people think that if they have no credit cards or debt that they have good credit. In fact, the lenders see that as having no credit which is the same as bad credit. In this case, you should start out with getting and using a credit card. Make your purchases with your credit card and paying off the credit card bill every month. A year of this and you will have very good credit.

http://www.creditscoring.com/pages/bar.htm

If you want to know what is a good credit score?

They actually come right out and give numbers.     

http://www.youtube.com/watch?v=tgOXx3yz8Zg&feature=list_other&playnext=1&list=SP96E9E7EDE57FCB00

Buying a New or Used Car with Bad Credit From Ask Audrey

How to prepare for buying a car

The first thing people should do is make sure that their credit report is in the best shape that it can be in. Send for all three credit reports and go over each item. If you find something wrong such as a troubling account that does not belong to you, challenge it and have it removed from your credit report.

Make sure that your credit report is in the best shape that you can get. Your target is to bring about a high credit score.    

The second step is to look for a car that you can afford.   

http://www.consumerreports.org/cro/cars/car-buying-advice/guide-to-new-car-buying/-narrow-your-choices/how-much-can-you-spend/0701_how-much-can-you-afford-to-spend.htm

You must determine the costs and price you can pay for a car

http://www.consumerreports.org/cro/cars/car-buying-advice/guide-to-new-car-buying/-narrow-your-choices/narrow-your-vehicle-type/0701_narrow-your-vehicle.htm

Find a model that best fits your needs

http://www.consumerreports.org/cro/cars/car-buying-advice/guide-to-new-car-buying/-narrow-your-choices/pick-the-right-model/index.htm

Pick the right model

http://www.consumerreports.org/cro/cars/car-buying-advice/guide-to-new-car-buying/-narrow-your-choices/model-reviews/index.htm

Different models can provide dramatically different driving experiences. Review the model.

http://www.consumerreports.org/cro/cars/car-buying-advice/guide-to-new-car-buying/-narrow-your-choices/reliability-information/index.htm

Reliability Ratings show you how well vehicles have held up compared with competitive models, and what the odds are that you could be inconvenienced by problems.

http://www.consumerreports.org/cro/cars/car-buying-advice/guide-to-new-car-buying/-narrow-your-choices/fuel-economy/index.htm

The fuel-economy is very important to your budget. Fuel prices can only go up.

http://www.consumerreports.org/cro/cars/car-buying-advice/guide-to-new-car-buying/-narrow-your-choices/safety-ratings/index.htm

Look at safety

http://www.consumerreports.org/cro/cars/car-prices/index.htm

Make sure that you have some idea of what the price of the car is before you meet the dealer. Their objective is to make money. Your objective is to get the best car for your money. Now all that left is the dealer and you haggling over the price.

Part 2: Shopping for a Visa or Master Card

Your Eighteen years old. Now you are of age to sign a contract. That means that you can open a checking account. You can open a credit account with store, MasterCard, Visa, and other revolving credit organizations. You are also old enough to be taken advantage of by organizations and individuals that is in the business of taking your money and placing you in debt. It is up to you to learn about personal finance. It is not up to society to teach you.

The first thing you must do is establish a banking relationship. Personally, I do not like to pay banks to keep my money. I would shop around for a bank that has free checking. Many banks still have free checking accounts. That is the bank where I would open a checking account. 

Second, you should research getting a Visa, MasterCard, or another popular cards for personal shopping and travel expenses. The best thing for you to do is open your credit account at the bank where you have your checking account. They know you at that bank and they may be more willing than others to take a chance on you. I assume that you already have a job and that you can prove that you have an income from that job such as a pay stub. You can give the bank information such as your bosses name, company name, address, and phone number. You know all your personal information as well as Social Security Number.

But before you fill out an application you have some other work to do first. Apply for a free credit report at all three major reporting agencies.  Just because you just turned 18 does not mean that you do not have a credit report with your name on it. I know of a 3 year old that had a dozen credit cards because of fraudulent activity. I know dogs and cats that have credit. Basically, this is what you are looking for. Since you never had credit before, your reports should not exist. If they do and it is things that you had nothing to do with, report it as fraud to your reporting agency. If it was done before you turned 18, it should be no problem to have it removed.

Next, talk to the bank and find out the criteria for accepting and giving out credit cards for people applying for a minimum credit limit. The criteria will be things like, minimum income, having a phone and address, length of employment, and etc. Do not apply for a card without knowing the criteria. That is the banks way and that is what they will tell you to do. You do not want a long list of denials on your credit report. If you have to many denials, other banks will see it and think something is wrong with you. If you do not meet their minimum requirements for a card, look on the internet. Wait 30 days after making changes to your credit report if you have one. If you do meet your banks qualifications and you want their card, fill out the application.

http://www.creditcardspecialist.com/Limited-or-No-Credit-Card-Deals-8375665-page.php

Credit Card Deals for People With Limited or No Credit

As you build your credit, you can move into better credit card agreements with lower interest rates and higher credit limits. You can also move into agreement that give cash back or discounts on hotels and airline tickets.

Part 1: What Your Word Means

 
Many people take their own word for granted. What they do not realize is that society judges them on their word for everything that they do. This judging of your past is what will determine your future. I stood by amazed at people when they say things like, “I know I have bad credit.” Like it is something to be proud of. Ignorant people like that tell me that their word is in the “crapper” and that person can’t be trusted with a dime. Parents think that children learn how to borrow money in school. They are not taught about money, if they are taught anything at all about finance. Your children are taught in school and from TV how to give lending institutions as much money as they can. They are not taught how to use credit to your children’s advantage.   

http://www.youtube.com/watch?feature=endscreen&NR=1&v=XhVCzqjQzzA

Credit Report Scoring From Ask Audrey

Maintaining your credit report

If you are working, you should always do this with your paycheck in this order;

1.    Pay yourself first. That means put money in your 401K, IRA, or savings account. I recommend at least 10% of your paycheck every pay. 

2.    Pay your obligations. Never spend money just because it makes you feel good. For example, I talked to a lady that bought one of these cell phones that do everything for her except cook dinner. She told me that I should get one. I told her that my phone works just fine. She had a problem with that because I was not keeping up with technology and the “Jones.” In less than 4 hours, I noticed her phone “locked up” on her, she could not make or receive phone calls, and most of the time, it dropped calls when her phone was working. Her phone is so complicated that she could not use many of the fetchers. By the way, they offer a class for her to take on how to use her cell phone.

3.    Pay your charities such as your United Way or your 10% of your remaining money to your church.   

Let’s talk about your credit report. It is very important that you follow your contracts with your lenders to the letter. This determines your credit score. Your credit score is used by lenders for future borrowing for such things as new cars, a home mortgage, and the least expensive credit. 

Here are the things that you must do to maintain good credit;

1.     Pay your bills on time. For example, if the payment is due on the second Tuesday of every month at 10:00 AM, you must have it in the payment office at 10:00 AM on the second Tuesday of every month. Don’t think that mailing it on the second Tuesday is good enough because the earliest that it can get to the payment office is the next day. If that is the case, you are not one day late, you are 30 days late because your money arrived in the next billing cycle. That is how your lender will report it to your credit reporting service. To many of these late payments will result in a lower credit score.That equates into higher borrowing cost to you or even rejections by lenders.

2.     Never co-sign for individuals including spouses. When you co-sign, you are saying that you will pay when the other party will not or cannot pay. When they are late paying so are you and it is reflected on your credit report.   

    

These are the two obvious things that you have to remember to keeping a high credit score. Now let’s talk about the things that can destroy your credit score.

1.     Always keep your credit separate from everyone else. Keep in mind, holding joint credit is not in your best interest. It is in the best interest of the lender.

2.     If you live with your spouse, make sure that both of you spend time once a week going over all bills to make sure that they are being paid on time.    

3.     Make sure the mortgage or rent is paid on time. You hold the mortgage account jointly so review it jointly. Marriage is not all love and fun. It is a business.

4.     When your credit card bills come, check to see what you purchased. If you see purchases that do not belong to you, call your credit card company and challenge it.

5.     If you use an unsecured mail box, change to a more secure mail box. Thieves will use your mail box to steal your identity and stick you with their bills. 

6.     Be careful of what you do on your PC. Many Internet thieves will use the Internet to steal your personal information and your bank account.

7.     Thieves will steal your information by calling you on the phone pretending to be your bank or some other institution. They will open accounts in your name and stick you with the bill.

8.     The economy can destroy your credit. This Great Depression has trashed millions of people financially. If it looks like you will not be able to keep up with your bills, call your lenders and tell them that you are having trouble paying your bills. Ask them if they have a solution to some of your bill paying problems short term until you can gain employment and get back on your feet.

Last, check your credit report from the three major agencies once a year. Look at each item and determine if it’s your account. If it is not your account, report it to the proper reporting agency. If you know you have accounts where you are in good standings that is not on your report, report that to your credit reporting agencies.  

The objective is to make your credit report look the best that you can. Remember, this is your unspoken word that will go out to all the stores and banks where you do business.     

If You Want to Buy the Things You Need

Investments are only one part of your financial plan that is needed to have a good comfortable life. You also need education to get a good job. Third, you need to be able to control your income and expenses so that your net worth can grow. Net Worth will open the doors for you to gain status in society. The higher you go in society, the better off your children will be. It all comes down to where your children will start in life. The child that worries about where their next meal will come from or if they will live through the day in school will not do as well as the person who does not have to worry about such things. The fourth part smooths out your financial plan. That fourth part is your credit rating.

Let's review what you have learned in the past about your credit.

Typically, you would find out when an account goes to collections. But sometimes a bill can slip through the cracks, like an old utility bill sent but not forwarded after you've changed addresses.

If you want to buy the things that you need, you better maintain good credit. If you want a good paying job, you better maintain good credit. If you want to buy a new A1 condition car, you better maintain good credit. If you want to borrow a car, you better have good credit.

These are the things that the public school system will not teach you or your children. Many people think that credit is an extension of their paychecks and they do not have to pay it back. I can recall people saying things like, “I know my credit is bad” like they are proud of such a status. Some very ignorant and stupid well-wishers think that co-signing a loan for someone is the Christian thing to do. They don’t pay the loan and the loan falls on you, the well-wisher. You don’t pay the loan and your credit is the one that is damaged. 

The only thing people have of any value is their word! This is what is meant by the saying, “His word is as good as gold.” or "his word ain't worth shit!" When you borrow money and you say that you are going to pay it back with interest, you are giving your word that this is what you are going to do. Here is why people will give you a high paying job and lend you ever increasing amounts of money.

Things happen through life, job dismissals, illnesses, home break ups, and etc.  If this happens to you, it might take years for you to get your credit back to a 750 to 820 credit score. The first thing that you must do is monitor your credit report.  

When you monitor your credit regularly, you can make sure that anything negative appearing on your report is accurate. If I were you, I would monitor my credit report at least once a year. Most credit reporting services will allow you to do that. Look for “dings” in your credit report that can cause you to lose that good job, new car, or the revolving low credit high sealing credit account that you want. Here's an idea of what these items are and the impact they have on your credit score.

Late payments

Late payments can damage your score, depending on how late the payment was made, and how long it's been since that occurred. The later the payment was made, the more it hurts your score. If you are one day late making your payment, you are 30 days late. That clock starts when the store or bank receives your payment, not when you put the payment in the mail.

However, its effect on your credit diminishes over time. If you made a late payment 3 years ago and you have not had one since, that late payment will mean very little to your creditors.

Collections

 Reviewing your report can help here: if you find an item that isn't yours, you can dispute it, and if it is yours, you can pay it. These items can stay on your credit report for up to seven years. As with late payments, the longer it's been on your report, the less it affects your score.

Adverse public records

As a general rule, unpaid city, state, and federal tax liens can remain on your credit reports for up to 7 years from the payment date. These items will negatively affect your credit score and only time diminishes their impact on your credit. Generally, Chapter 7, 11, and 13 bankruptcies appear as public record items on your credit report for up to 10 years after filing. Chapter 13 bankruptcy records are sometimes taken off sooner, 7 years after filing, depending on the credit reporting company's policy.

Your best course of action

Start by checking your credit report. If you believe any items on your credit report are inaccurate, dispute them with the associated bureau.

If items are accurate, make sure you've paid any overdue accounts. Then ask the credit bureau how much longer the item will remain on your credit report. In the meantime, maintain your overall good credit health by paying bills on time and using less than 35 percent of your available credit. Keep monitoring to watch your progress!

The Law Vs. Investments

An IRA or 401(k) is like an empty piece of luggage that you take on your journey to retirement. In other works, an IRA or 401(k) is the law that covers your investments for retirement.


According to Nathalie Gorman in the article "What's in Your Retirement Account?",

"You must choose what to pack inside it—stocks, bonds, cash—or else the firm that handles your account will choose for you (if that ends up being a cash account, you'll miss out on the opportunity to earn bigger returns by putting at least a portion of that money in stocks)."

I agree with Nathalie, there is no "best" retirement investment.

Nathalie goes on to say, "What's right for you and for your closest friend can be wildly different, depending on a variety of factors: your age, whether you will have other retirement income sources (Social Security, a pension, an inheritance), your appetite for risk. If you invest through an employer-provided plan, look for educational material on the company Web site to help you choose the right mix. If you're investing on your own, consider consulting a trusted financial adviser. Overall, I recommend subtracting your age from 100 and putting that percentage in stocks (so if you're 30, that means 70 percent)."

If you are investing through your company plan, diversification is key.

"When you invest through a retirement plan at work, you're usually offered a menu of mutual funds, which provide a basket of investments in one shot. With your own IRA, you can also build a diversified portfolio by opting for low-cost exchange-traded funds (ETFs): Each fund holds dozens if not hundreds of investments." ,  according to Nathalie. I suggest buying discounted bonds. Over time diversify your bond portfolio and reinvest your interest and principal into more bonds. 

Now What Happens When I Retire?

  http://www.blogger.com/blogger.g?blogID=4951871798238945144#editor/target=post;postID=6871141336570686293

Josh Mellberg walks you through the pros and cons of annuities step-by-step. He shows one way of dealing with your retirement money once you retire. I do not expect the stock market to make large gains in the next 20 years. I expect bond yields to go up over time. This is why I suggest investing in High Yield Bonds (not bond funds, they are not the same). I do not endorse or debunk Josh Mellberg's strategies. My job is to make you aware of his insurance concepts and strategies. 

Avoiding Work Place Investment Traps

A friend sent me an online copy of an article, “The Trap: Overlooking Invisible-Until-Now 401(k) Fees” in “O Magazine.” The article was written by Nathalie Gorman. I think it is worth talking about.


“A recent AARP study found that 71 percent of Americans think they don't pay any fees for their 401(k) plan. Actually, every 401(k) plan out there charges fees to every single one of its investors. For small plans, it can be as much as 2 to 3 percent of your investment. For large companies, it can be less than 1 percent, explains Mike Alfred, co-founder and CEO of BrightScope, a company that analyzes retirement plans. This might sound like a teensy fee, but it can make a big difference. For example, imagine that you were to invest $15,000 total in a 401(k) fund that earns 7 percent interest and has a 6 percent yield. In 30 years, a fund for which you pay a 1 percent fee would be worth $86,152. By contrast, a fund for which you pay a 3 percent fee would be worth $48,651. So, a 3 percent fee means that your fund would have half the worth of a fund for which the fee is 1 percent.”

Here is the reason why I say that if you are going to use your companies 401(k), you better know how much it cost you and what type of funds they offer you.

Nathalie goes on to say, “The Solution: It used to be that plan sponsors (i.e. employers) were not obligated to disclose the rate at which employees were charged for contributing to their 401(k) accounts. That has all changed as a result of new Department of Labor regulations that went into effect July 1, 2012. The amount that you pay in fees must be made plain on your statement, just like your bank lets you know when they've charged a fee to your account. It may be in the fine print on page 7 of 8 in an attempt to dissuade you from looking for it, but it's definitely there. The next time you receive a statement, take a look and figure out what kind of fee you're being charged. If you're concerned by it, dig out that HR packet and see if your company offers plans with different fees. Then, if it does, make a note to remind yourself to change funds during the opt-in period that usually happens at the end of the year. (If your company doesn't offer reputable funds with low fees, you might want to talk to your HR department to see if they will be including one for the next opt-in period.)”

If they are not giving you matching funds, I would consider discontinuing your 401(k) and opening an IRA where you can invest in individual securities or low cost funds.