Unfortunately, companies touting their ability to "fix/lower/relieve income tax debt" are often in the business of helping themselves to the detriment of their clients. In the latest development, American Tax Relief of Beverly Hills, CA has been sued by the Federal Trade Commission (FTC) for bilking customers of some $60-100m and siphoning off some $30m for its owners. While the FTC is … [Read more...]
Small Business Owners, Beware the Credit Adviser
October 11, 2010 By
Beware the "business consultants" and "business advisers" who promise small business owners and sole proprietors that they can take care of debt problems. Over the past few years, we've seen small business owners who fall victim to such scams. Anatomy of a scam Sometimes, small business owners come to us with tremendous business debts and and tell us that they hired an "advisor" or … [Read more...]
Over 50 and Unemployed?
September 24, 2010 By
The 57-year-old woman featured in this NYT story paid her home off but may lose it in foreclosure because she cannot pay her property taxes. She is not alone. According to the article it will take years to absorb the giant pool of unemployed at the economy’s recent pace: Of the 14.9 million unemployed, more than 2.2 million are 55 or older. Nearly half of them have been unemployed six … [Read more...]
Plenty of Reasons NOT to Modify Your Mortgage
August 26, 2010 By
More news on mortgage modification trends. The WSJ reports that borrowers who receive a permanent mortgage modification still have lots of other debt. The median ratio of total debt payments to pretax income stands at 63.5%. This means 20% of borrowers (or more) with permanent modifications are likely to re-default, primarily because of those high debt levels. If you have significant … [Read more...]
Fast-Track Arbitration Helps Debtors & Creditors
August 12, 2010 By
My long experience in determining claims of creditors for distribution in liquidation cases has led to a new experience. I've been appointed by the Superior Court of Cabarrus County as the arbitrator to determine the distribution of approximately $500,000 to between more than 150 potential claimants. The process has been carefully crafted to avoid long, drawn-out, and expensive litigation. … [Read more...]
Expose on Debt Settlement Company
July 27, 2010 By
We've written extensively about the perils of using debt settlement companies here. Before dealing with one of these organizations, do your research. … [Read more...]
The Power of the Automatic Stay
July 1, 2010 By
Firethorne Country Club filed for Chapter 11 in March. In a prime example of the power of the automatic stay, the club's owners bought some time to reorganize before a creditor could seize operations. A 2 p.m. hearing in federal court on was canceled after Firethorne’s owner’s filed the bankruptcy petition just after 1 p.m. How the automatic stay works The automatic stay applies to most … [Read more...]
Much-Needed Debt Settlement Regulation
May 17, 2010 By
We've written a great deal about the abuses and excesses of debt settlement operations lately. Last month federal legislation was proposed to tighten the screws on unsavory practices in this industry. It pointed out that while costs vary, "a company might charge up to 20 percent of the total debt. Fees are usually demanded upfront, even though a settlement may never be secured." Why pay … [Read more...]
Dealing With The IRS
April 23, 2010 By
Did you file for an extension on your income taxes? If you did so because you owe the government more than you can afford to pay, USAToday ran a good article on how to proceed. The best advice may be in this paragraph about installment agreements: You'll have to pay interest on the unpaid amount at a rate that's adjusted quarterly. The rate for the first quarter of 2010 is 4%, which is lower … [Read more...]
How Debt Settlement Works
April 21, 2010 By
The nonprofit Consumer Credit Counseling Service of Orange County produced an excellent video on how debt settlement works -- usually against you. We've written on this topic several times on our blog as well. If you decide to hire someone to help you settle, consolidate or otherwise manage your debts, then be very wary of companies that are advertising. Most of them draft various fees from … [Read more...]