Podcast of the April 11, 2015 Show – Credit Card Debt is Financial Cancer & Eliminating the Cancer

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Podcast of the April 4, 2015 Show – Negotiation Strategies and the Iranian Nuclear Deal

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A Major Decision is Coming in June on Second Mortgages

If your house is underwater on the first mortgage and on top of that you have a second mortgage, wouldn’t it be nice if you could get rid of the second? As of now, there is a process in a Chapter 13 Bankruptcy called lien stripping that allows this to occur.

Chapter 13 is akin to reorganization for an individual debtor. We use Chapter 13 for three primary functions – (1) to stop a pending foreclosure by filing the case just prior to the sale; (2) to lien strip out second mortgages when the FMV of the house is less than the first mortgage; and (3) to resolve unsecured debt by paying a small fraction of the debt over a 36 to 60 month period.

Chapter 7, on the other hand, allows you to discharge virtually all of your debts right away and does not require payments over the 36 to 60 month period. When it comes to getting rid of unsecured debt – such as credit cards, medical bills and sometimes income taxes, Chapter 7 is the best option if you meet the qualifications. Until now, however, Chapter 7 did not allow the chance to lien strip a second mortgage.

On Tuesday of this week (March 24th) the case of Bank of America v Caulkett was argued in the Supreme Court. At issue in this case, is whether under Chapter 7 (not Chapter 13) a second mortgage lien is extinguished if the value of the home is less than the first mortgage.

If the good ole bank loses, this will be a game changer for people who otherwise qualify for a Chapter 7 case and have a second mortgage on a home underwater from the first. From my perspective – I’m hopeful.

Many homes have seen some bounce back from being underwater, but have not increased to the point where any equity attaches to the second mortgage. The second lien in this circumstance complicates the problem of making it economically smart to remain in the home – something that is usually desired by the homeowner and better for the economy.

Just so you know, we have strategies to use Chapter 7 right now to discharge the mortgage debt – and then negotiate the release of the lien – but a little help from the Supreme Court would be welcomed.

The decision is expected this June.

Enjoy the week. Warm weather is coming – sometime. Oh, and don’t forget our upcoming FREE seminar on “The Smartest Way to Minimize Debt” – Tuesday, April 28th. Information is below.

And be sure to listen in on Saturdays from 8:30 to 10 AM on WDFN 1130 AM – on iHeart by CLICKING HERE– and watch the show on TV 20 on Sundays at 11 AM. Law and Reality is not just information – it’s entertainment!

Ken

The Tax Mistake – that’s a Really Big Mistake!

Tax problems are stressful – they cause loss of sleep and enormous pressure. The biggest mistake people make is ignoring them. An even bigger problem – that is particular to April 15th is that people often do not file their return or seek an extension because they know they have a tax liability and don’t have the cash.

Did you ever see the movie Pretty Women? In that movie, Julia Roberts goes shopping on Rodeo Drive and after a spending spree courtesy of Richard Gere’s credit card, stops in the store that refused her service the day before (when she was dressed street wise, not street smart) and shows the shopping bags off to the two snobby clerks and says, “Hi, Remember Me? You told me to leave. BIG MISTAKE, REALLY BIG MISTAKE, I have to go now. ”

Well the same is true if you fail to file your return because you’re afraid you don’t have the money. BIG MISTAKE – REALLY BIG! Filing and paying are separate issues. Failure to file will result in a 25% penalty on the tax you owe – which is a penalty over and above any penalty you’ll pay for being late. The late penalties for failing to pay – accrue over time – but it’s not that bad when you factor in the low Federal rate you pay on taxes that are outstanding. In the end, when you’re late on paying your Federal taxes, the amount of penalty and interest you pay over an installment plan is less than what you pay on a maxed out credit card.

As to all tax problems – there are good solutions available, at reasonable cost, to release levies and often settle the debt. Unlike many firms recently claiming to handle tax problems, THAV GROSS has been solving tax problems for individuals and businesses in the area for 33 years. If your bank account has been levied or wages garnished, the first step we do is contact the IRS or the State and work to get your money released.

If you have unfiled tax returns, we will help you get the returns filed. If unpaid taxes are the issue, we will analyze the years and dates to determine if the statute of limitation has or is about to run. If the statue has run or is about to run – the plan then is NOT to pay!

Income taxes are also sometimes dischargeable in bankruptcy – so we also examine that option to eliminate the tax. Most attorneys will tell you that taxes are not dischargeable in bankruptcy. They are wrong –income taxes are dischargeable if you meet the time requirements.

For both income and payroll tax liabilities – an Offer in Compromise with IRS and now with the State is also a possible way to settle the tax for pennies on the dollar (and when it works – it’s a great option). On an Offer – we can tell you if you meet the parameters or not right away. If you do – it’s worth pursuing. If you don’t – then applying for an Offer is a waste of time and your money.

The important point here – is that there are options and smart avenues to solve the problem. You should call us today – for a FREE CONSULTATION.

Have a great weekend- and don’t forget to attend our FREE seminar on Wednesday, March 25th – “Debt Free this Year” – we cover taxes there also! For information see below.

Be sure to listen in on Saturdays from 8:30 to 10 AM on WDFN 1130 AM – on iHeart by CLICKING HERE– and watch the show on TV 20 on Sundays at 11 AM. Law and Reality is not just information – it’s entertainment!

Ken

When should I do an Estate Plan?

The answer is NOW! There are several reason: (1) If you have minor children and something happens to both parents, you need to have a Guardian for your children; (2) If you have a Revocable Living Trust, when you pass away, the cost and time of the probate process is avoided and matters remain private; (3) with a Durable Power of Attorney and Healthcare Power, your family will be able to make decisions for you when you’re incapacitated and will not have to run to the Probate court for a Conservator appointment. If you don’t have an estate plan, you need to do one.

Now- here’s the BEST REASON why the ANSWER is NOW! We are offering a PRE-SPRING 40% DISCOUNT on the normal comprehensive estate plan for a married couple. Our regular fee of $1,495.00 is reduced to $895 – but you must call and register for your appointment by March 20th. We have NEVER offered such a great deal – and you can thank (1) the time I spent pondering life during the February freeze for this idea; and (2) Erick Glick,the Director of Estate Planning Department and premier estate planner, for agreeing to devote his time to the program. I assure you- you will not find a better deal than this anywhere. So call now– you only have until March 20th!

To make things super easy for you – click the button to the right and register online. Have no fear – you can also call 248.645.1700.

Be sure to listen in on Saturdays from 8:30 to 10 AM on WDFN 1130 AM – on iHeart by CLICKING HERE– and watch the show on TV 20 on Sundays at 11 AM. Law and Reality is not just information – it’s entertainment!

Have a great weekend – Spring is on the way!

Ken

Maybe We Need an Independent in the Next White House

It’s 4 PM, Friday, and the verdict is still not out as to whether Congress will pass the necessary funding to keep Homeland Security running at full force. While I’m sure that it will happen – because no politician would be willing to shoulder the blame if funding lapsed and a terror attack occurred on the homeland during that period. That, however, is not what disturbs us. It’s the blatant waste of time and ineptitude that Congress repeatedly demonstrates – a partisan fight between Democrats and Republicans, as well as an inter-partisan fight between Moderate and Conservative Republicans.

Holding that aside, how is it possible that Mitch McConnell, the republican leader of the Senate, could go two weeks without talking to John Boehner, the Speaker of the House? They are from the same party. What are these guys doing in Washington?

So while pondering this, I thought, as long as there is a divergence between the White House and either Congress or the Senate, we will continue to face this ineptitude. The thought also rings true that if the same party controlled the White House, and both houses of Congress, then the “have it their way” game could lead to a bitter divide, and who knows what in legislative outcomes.

So how about an Independent for the Presidency- a fiscally conservative person with a social conscience to address the issues. Conservative Democrats, combined with Non-Conservative Republicans, could ban together and elect the next President. When issues arise – he’s the man in the middle to broker the deal between the Dems and Reps – since he is aligned to neither.

As we look to March and warmer weather – let me know if you agree!

Be sure to listen in on Saturdays from 8:30 to 10 AM on WDFN 1130 AM – on iHeart by CLICKING HERE– and watch the show on TV 20 on Sundays at 11 AM. Law and Reality is not just information – it’s entertainment!

Enjoy the weekend and don’t forget our upcoming Seminar on March 25th – I promise you – there will be no partisan politics when it comes to laying out the smart plan to preserve future income.

Ken

Here We Go Again

In Friday’s Wall Street Journal online, a lead story indicates sub-prime lending is on the rise.  The article states:

Almost four of every 10 loans for autos, credit cards and personal borrowing in the U.S. went to sub-prime customers during the first 11 months of 2014, according to data compiled for The Wall Street Journal by credit-reporting firm Equifax.

The dollars are significant. We’re talking about over 50 million consumer loans and cards totaling over $189 billion – the highest level since 2007. Sub-prime is defined as borrows with less than a 640 credit score.

What does this tell you?  I see two major points. First – you don’t need  a high credit score to get credit. This means there is no reason to fear a drop in your credit score when you pursue a smart campaign to shed your credit card debt and property that remains underwater. Our clients that have settled their credit card debt through debt resolution have seen their credit scores increase back to 750 in as little as a year and half following the settlements.

The second point is the Lending Industry did not learn from the Financial Crisis and they are going to lead us down the same pathetic road we crossed from 2008 – 2012.  Hopefully we, as consumers, did learn. The lesson is you need cash in the bank – savings as a cushion when the economy falters. The available credit will be taken away and you don’t want to be caught holding the bag… again.  Remember Eve of Destruction -  the song by Barry McGuire, “You tell me over and over and over again my friend, ah you don’t believe we’re on the eve of destruction.”

Perhaps I’m just too cold from the weather – then again, perhaps I’m hot on the spot.

Be sure to listen in on Saturdays from 8:30 to 10 AM on WDFN 1130 AM – on iHeart by CLICKING HERE– and watch the show on TV 20 on Sundays at 11 AM. Law and Reality is not just information – it’s entertainment!

Have a great week – stay warm – and don’t forget our Free Seminar – tomorrow evening.

Ken

Are Americans Getting Smarter?

The retail sales from the Commerce Department on Thursday revealed a decline of .8% in January, which followed a .9% drop in December. A great deal of the decline in retail sales is attributable to a 9.3% decline in sales at gas stations. As can be expected, the rest of the retail industry, and the economy watchers, are looking to see the gas money go to other retail spending to boost GNP– with the goal being that retail spending continues to increase without regard to lower gas costs. Such a result would be good for the economy because consumer spending drives 65% of the economy and as spending increases, jobs and growth occur.

But what about the average Joe and Jane – you and me? Our job is not to build the economy, our job is to build personal wealth and reduce debt so we have funds to retire with. To me, the really good news in this week’s report is that the personal savings rate jumped in December from 4.3% to 4.9%. Is it possible that, following the misery of 5 years of stagnant growth and a horrific financial crisis and recession, Americans are getting the message that you need cash in the bank as a savings cushion?

I hope that is the case. After all – we should never forget – that when the economy falters, having available credit, rather than cash, does not work. Why is that? The answer, as was demonstrated in 2009-2011, is that the credit companies will slash your available credit down to $100 greater than you owe. Worse yet, they will send you the ultimate insult letter telling you how much they appreciate your business. Lesson learned – when you need to borrow money, it’s not there. When you don’t need to borrow it – that’s when you’re most eligible for a loan.

I always say if you want to avoid financial cancer, get rid of the credit card debt. Best yet – put those payments into savings. To find out how, sign up for our upcoming seminar on February 24. Simply click on the image below to register.

Be sure to listen in on Saturdays from 8:30 to 10 AM on WDFN 1130 AM – on iHeart by CLICKING HERE– and watch the show on TV 20 on Sundays at 11 AM. Law and Reality is not just information – it’s entertainment!

Have a great week,

Ken

Auto Bonus Check– What You Can do with $9,000

he word on the GM bonuses is that they should average about $9,000. Here’s a way to turn that $9,000 into $23,684 of value, and then to save yourself $4,736 per year for life: Instead of spending that $9,000 or even paying down your debt, if you have $23,684 in debt, we can use that $9,000 to settle the total $23,684 of debt.

Our average settlement on debt resolution on credit cards is 30 – 38%. I used 38% to be conservative– which means if we pursued settling $23,684 of your credit card debt, on average it will cost you between $7,100 and $9,000 to resolve the debt. Rather than spend the money, I’m saying you should consider using it to settle the credit card debt.

The best part of such a strategy is that you are probably paying 20% on the credit cards– which amounts to $4,726 of interest per year ($394 per month). If you settle the debt, you are then saving the $394 forever. I say forever, because unless you get rid of the credit card debt most people fall into the credit card trap that they don’t have the excess cash to avoid using the cards, so the debt never goes down. Whatever you pay down, you bring up with the need for new purchases because all of your money is going to the credit card payments!

The numbers are really higher because you are probably in a 22% tax bracket, which means you need to earn $505 each month to pay your taxes and net $394. Of course, we would first analyze your entire financial picture to make sure this is the smartest way to preserve your future income. But if you are sitting on $20,000 or more of credit card debt… you need to do something.

This week is closing with some solid job growth data and a level of optimism about the economy. Of course, it’s not shared by everyone. George Will is quoted today in NewsMax, as stating, “Economic weakness — new business formations are at a 35-year low — is both a cause and a consequence of alarming cultural changes.”

I agree with him on the point that business formations remain low. We have not returned to the days where clients are coming though our doors with the enthusiastic determination to start their own business. It has picked up, but it is no where close to the pre-recession days.

Though George Will sites the cause as cultural, I believe the reason is that (as I have pointed out before) most small business start-ups are financed with home equity loans or second mortgages on real estate to secure the bank on start-up capital. While real estate values have improved and the number of homes underwater has been reduced from the 11 million peak to the 6 million range (approximate), the return of real equity that can be pledged for start-up capital on a new business is still not there. Until that happens, in my view we will continue to see a lack of new business formation. (In case you are the exception– be sure to call us for assistance in forming the business– we’ve been doing it for 33 years!).

What I do believe is a certainty is that nothing stays constant. Whether the economy goes up in the short term or not, we will again go down. To avoid the disasters we encountered in the last recession, the lesson learned is to live with cash in the bank– and not off your available credit. So before you remodel the kitchen with the the auto company bonus or your cash on hand, think twice about using that money to knock out the devil of personal finance: the evil, unending and forever depressing credit card debt!

Be sure to listen in on Saturdays from 8:30 to 10 AM on WDFN 1130 AM – on iHeart by CLICKING HERE– and watch the show on TV 20 on Sundays at 11 AM. Law and Reality is not just information – it’s entertainment!

Have a great week,

Ken

Obligation vs. Strategy?

Who will win this year’s coveted Super Bowl title? What amazes me most is that with all the excitement and media coverage for events such as the Super Bowl and the World Series, when the following year comes around and you ask, “Who won last year?” it seems only those serious sports enthusiasts (i.e., those who seem like statistical sports computers) can answer the question. I guess it’s no surprise, given the constant stresses of our daily lives along with the multitude of national and local news events that often leave us on edge when it comes to the broader picture of the future of our world for us and our children

We get super involved in the events of “today” and don’t focus long term. While I’m not advocating we become Sport Encyclopedias to regurgitate the win loss records of the past, there is a need to look longer term and to plan when it comes to our finances and addressing our needs and the needs of our parents long term. Two facts you can’t dispute – and it’s not death and taxes. First, if you don’t die young, you may live to an old age and ultimately may need nursing care and attendant care. Secondly, the longer you live, the greater amount of additional income and savings you will need beyond social security retirement benefits. When you’re 50, this may not be on the top of your agenda. But when you cross 60, and your parents, if living, are between 85 to 95 – these issues become center stage.

What should you be doing now about these issues? The answer is educate yourself. You need to maximize savings, minimize or eliminate debt and position your assets and your parents assets to protect them so that you shift as much of the burden of nursing care to the government, and thereby preserve the assets you were able to accumulate for your spouse and your children. I don’t believe this is a strategy – it’s your obligation!

To help you meet this obligation we have two perfect free seminars to show how. Check them out below.

Be sure to listen in on Saturdays from 8:30 to 10 AM on WDFN 1130 AM – on iHeart by CLICKING HERE– and watch the show on TV 20 on Sundays at 11 AM. Law and Reality is not just information – it’s entertainment!

I pick the Patriots. 365 days from now, I won’t remember who played – but if all goes right, you and I will be a year older.

Ken

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Law and Reality
Your Analysis WIll Include:
A complete snapshot of your current debt and financial situation.
Suggestions with the best options to resolve your Credit Card debt, Tax debts and Business related debt.
Your Options for Mortgage Modification, Short Sale or what other solutions may be available to keep you in your home
If you qualify for Chapter 7, 11 or 13 Bankruptcy.
What other alternatives are available for resolving your debt.
Enter your email to Start and Receive Your Results from
the FREE Financial Analyzer

* we never share your e-mail with third parties.
FINANCIAL ANALYZER
  • A complete snapshot of your current debt and financial situation.

  • Suggestions with the best options to resolve your Credit Card debt, Tax debts and Business related debt.Your Options for Mortgage Modification, Short Sale or what other
  • solutions may be available to keep you in your home

  • If you qualify for Chapter 7, 11 or 13 Bankruptcy

  • What other alternatives are available for resolving your debt


Enter your email to Start and Receive Your Results from the FREE Financial Analyzer
Your Analysis Will Include

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ANALYZER