One reason people here in New Jersey are contemplating bankruptcy, in addition to credit card and medical debt, is a big tax bill that they cannot pay. People often ask me whether taxes are dischargeable (and many people think that they are not). The answer I usually give is, it depends.
Whether taxes get discharged depends on two things: What kind of tax it is (income, real estate, sales, or tax withholdings from employees), and whether it passes the bankruptcy code’s three part discharge test. To get a good answer to this question I asked local tax accountant Ira Krassan to join me to go over these points and give you a good idea of whether bankruptcy can get rid of part, or all, of your tax debt and get you the fresh start that you need.
I have often provided links in my semi-monthly e-newsletter to articles on EveryDollar.com that talk about ways to budget, save money, and plan for the future. The information they provide is great for anyone trying to save money to pay down debt or just find extra cash for a special purpose or to save for retirement.
They recently posted an article on their blog about how your smartphone can help you do this, not just with their budgeting app, which I reviewed in a previous episode, but also with many other apps that find you deals. After reading it, I thought it would be a great idea to bring this information to you in the podcast.
Many Americans do not have a will, even though they may be married or even have children. It is on their “To Do” list, but never seems to get done, most times because they either do not know where to start or do not want to think about their own deaths. But it is one of the key things that you should do as part of your financial plan.
I can’t help you get over your not wanting to plan for your own death, but I can give you some tips on how to get started. So in this episode I am going to go over the decisions most people need to make and the information they need to gather to start the process, whether you are doing it yourself or hiring a lawyer.
Not everybody with debt has to file bankruptcy. Many times it can be paid over time with a bit of belt-tightening and self-discipline. This is a great way to get out of debt and improve your credit scores.
So in this episode, I am going to talk about how it can be done and lay out the steps that you need to take to accomplish it. It may not be possible for you, and you may end up in bankruptcy, but at least you’ll know that you tried everything else you could first.
Student loan debt continues to be a problem nationally, as the total owed exceeds $1 trillion. Although private loans are also a problem, the good news is that they make up only 15% of the total debt, and federal loans still dominate the landscape. The amount of debt per student (and in many cases the parents) has led to real problems with affordability of the monthly payments and defaulted loans.
These people have either given up, and let the loans default, thus facing wage garnishment and the loss of their federal tax refunds for the foreseeable future, or are hiding out in a deferment or forbearance, hoping that their financial future will somehow get better and allow them to make the payments. Still others file chapter 13 bankruptcies to prevent the entry of default by forcing the loans into a forbearance while making a small monthly payment for three to five years.
None of these are the optimal solution, especially as there are many offered by the U.S. Department of Education that allow you to get out of default (if you are) and get into a monthly payment that is affordable at your income level. So in this episode of the podcast I talk about what those solutions are and how they can help.
One part of a financial strategy that is often overlooked is dealing with death and disability. It is an unpleasant topic that no one wants to think about, but one that has to be addressed. Failing to plan for them can threaten to unravel all of the work that you have done to date to ensure financial freedom. It could prevent your assets from going to those whom you want to receive them or cause major disruption if you become disabled or incapacitated.
So in this episode, I talk about why you need a will, a living will, and a power of attorney to protect your financial plan and prevent disruption and chaos in your financial life. I will discuss what can go wrong without them, and how having them can prevent these problems.
One option people have for dealing with their debt is to negotiate a compromise figure, so as to get a balance that they can afford to pay, either in a lump sum or in payments over time. They may not be able to afford $7,500, but they can afford $5,000. In this way they can avoid bankruptcy and still pay their creditors.
A complication comes in, however, in that the $2,500 you saved on the deal is considered taxable income by the IRS! This can come as a nasty surprise when it comes time to prepare your return. But there may be a way to avoid those taxes if you know what to do. That is why, in this episode, I invited local accountant Jerry Glauser onto the show to talk to me about the solution to this problem.
When it comes to home mortgages, there are many options out there. You can go to a conventional, neighborhood bank, your credit union, or the online companies that are advertising on TV. Lately there have been a lot of commercials about people applying for a mortgage in their underwear, or in a movie theatre from their smartphones. Companies like LendingTree and RocketMortgage really want your business and emphasize the ease and convenience that they offer.
Choosing which option to go with is very important, not only in the short term, with insuring that you will be approved for financing the home of your dreams, but also in the long term of living with a 15 to 30 year mortgage. So in this episode I talk again with local real estate Broker Lynn Stambaugh of Cardinal Real Estate Services to see whether the convenience touted by online mortgage companies comes with any downsides that you should consider.
People in financial difficulty are often hounded by debt collectors trying to get them to pay. Although the constant barrage of phone calls and letters is bad enough, many times these collectors will use harassing and intimidating tactics in order to be the squeakiest wheel and get to your money first. Dealing with this can be very stressful and add to the overall desperation of those deep in debt.
But fortunately, there is federal law in place to protect you from this type of harassing behavior and even give you a basis to sue the debt collector for damages and attorney’s fees! It is called the Fair Debt Collection Practices Act, and it is a powerful weapon against unethical and unscrupulous debt collectors. In this episode, I talk about how this law can be your sword and shield against harassment.
No matter what statistic you read, it is fairly safe to say that most businesses fail. There are many reasons for this, such as poor planning, insufficient capital, or bad management, and working to avoid these is key to the success of your business. But some things are just beyond your control, and when those events happen, they can be devastating to your business.
One way to guard against this is having the right insurance. The proper coverage, such as business interruption insurance, can make all the difference in the world if disaster should strike your business. That is why, in this episode, I brought back local insurance broker Dave Strout of Cettei & Connell to talk about what kind of insurance coverage every business should have to increase the chances of success.
In Episode #1 of the podcast on New Year’s resolutions, one of the goals I mentioned for 2016 was making a budget. The vast majority of Americans don’t have one, and it is one of the most important things you can do to assure financial freedom.
But how do you go about making, and more importantly, sticking to one? Where do you start? What tools do you use? In this episode, I answer that question by reviewing one particular free online budgeting tool and suggesting others in the show notes. Checking them out for the help you need.
I get calls from people all the time who are facing the loss of their home through foreclosure. I am able to help many of them get their mortgage back on track with a chapter 13 bankruptcy, but that is not always the best solution.
So in this episode I speak with Lew Adler, an attorney here in Woodbury, Gloucester County New Jersey, with 30 years of experience. For many years he has been helping people fight back with their mortgage companies when a foreclosure was brought against them.
If you are facing the loss of your home, then this episode is for you. Find out what defenses and options you may have to deal with the mortgage company and not have to move out.
One of the biggest things that can lead to financial ruin is medical debt. Catastrophic illness or injury that results in long hospital stays and recovery can result in crushing bills, even where there is insurance coverage. However, proactive and aggressive handling of that debt can often leverage it down to manageable levels.
So in this episode of the podcast I am going to talk about strategies and approaches to managing this debt here in New Jersey in hopes of helping you make it affordable, avoid bankruptcy, and preserve your credit.
One of the biggest goals of financial freedom is a comfortable retirement. But you have to plan for it! Investment houses like Charles Schwab advertise about it on TV, there are commercials with huge dominoes show how a little invested now can build into a nice sized nest egg if you know how much money you will need to retire and how long that money will last.
The problem is that many people just don’t know the basics of retirement planning or even where to start. That is why in this episode, I talk to Chris Stagliano of Northwestern Mutual to get you the information you need to get started.
If creditors are suing you here in New Jersey to collect on a judgment, then unless you fight it and win, they will enter a judgment against you and try to collect it. But what can they do? What tools are at their disposal to get your money and how can you defend yourself? These are things I talk to clients about all the time, so in this episode I go over them, so that you can get a clear idea of what you are facing, and what you can do to defend yourself.
People in financial difficulty here in New Jersey often get sued by their creditors to collect their debts. These suits usually lead to judgments because people don’t think they can fight them or try to fight them based on an inability to pay defense and lose.
But sometimes there is a basis to fight a lawsuit, but people don’t know they have it. More and more in this country it has become the practice of creditors to sell their claims to debt buyers in order to get “half a loaf” in terms of money and avoid the hassles of collection efforts. Companies like Midland Funding, LVNV Funding, Cavalry Portfolio, and New Century Financial will pay a fraction of the balance on a huge number of claims and then bring suit to collect for large profits.
If this is happening to you, then you need to consider whether you want to fight any claim they bring. In this episode, I talk about what defenses you may have to a debt buyer lawsuit, and how they can help you.
April is Distracted Driving Awareness Month, so in this episode I talk about this topic and how public awareness has increased, along with the penalties of doing so, as states toughen up their laws. Penalties in New Jersey are now more serious, as third or subsequent offenses can result in a license suspension, and any resulting injury or death of another person can lead to criminal charges!
The organization People Against Distracted Driving (PADD) was formed by Mike Kellenyi after the 2012 death of his daughter, Nikki, to raise public awareness and work towards reducing/eliminating distracted driving in this country. Also as a part of my office’s observation of Distracted Driving Awareness Month, I interviewed Mike Kellenyi to find our what PADD is up to. Find out with me!
People facing foreclosure on their homes and trying to salvage what they can of their credit, or those who are upside down on their homes and looking to get out from under, often turn to a “short sale” as the solution. But a short sale isn’t what most people think it is, and isn’t the “silver bullet” they hope it will be.
In an effort to bring the truth to people, I talked to a local expert on the subject, Lynn Stambaugh, the broker/owner of Cardinal Real Estate Services here in Woodbury. If you are considering a short sale of your home, she is worth a listen, and if you need solutions for an “upside down” home, she is worth talking to.
People in financial difficulty often have low credit scores that prevent them from achieving their financial goals and dreams. So in this episode, I talk about what has to be done to clean up your credit reports and start increasing your FICO score.
Getting a traffic ticket in New Jersey can have consequences beyond just the fines, court costs, surcharges, and even points that may be assessed. As a New Jersey resident and licensed driver, you might also face additional financial problems in the form of increased auto insurance premiums.
These problems could be minor or significant, depending on the violation, but they do play a factor in your decision on whether to plead guilty. If your budget does not have any disposable income after the monthly bills are paid, or you don’t have savings, they can wreak havoc on your plans for a better financial future.
Not surprisingly, the question of “How will this affect my insurance?” is one that I get a lot. So in this episode I interview Dave Strout of Cettei & Connell in Woodbury, New Jersey, to give you a great answer to that question!
Financial freedom often comes from a job or career obtained as a result of a good education. But graduating with enormous student loan debt can stand in the way of that freedom. In this episode, I talk about how to create a smart and affordable financial aid strategy so as to minimize the likelihood of graduating with unmanageable loan debt!
In this episode, I interview Domenic Postorivo of GreenTree Mortgage here in New Jersey on (re)building credit and when you can get a mortgage after filing bankruptcy.
Have you made a new year's resolution to be more financially secure? Then check out these tips to making that resolution a reality!