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Is A Tax Refund A Sign Of Financial Mismanagement?

Getting a tax refund can really boost your finances, and give you the opportunity to pay off debt or perform home repairs. But, not everyone gets a tax refund, some people end up owing more taxes at the end of year and so miss out on the benefit of having extra cash hit their bank account in the Spring. Then, there is that small group of people who break even, neither receiving a refund nor owing. So, which is best? If you had a choice, and you do, on how much is held out of your paycheck, which method is best for your finances?

Some financial experts say getting a big tax refund isn’t always a good idea. Here’s why:

● A large tax refund means you are having too much held out of your paycheck every two weeks.

● When too much money is held out of your paycheck, that means less money goes in your pocket.

● Allowing a large amount of funds to be withheld, and then repaid to you every year by the IRS, is essentially allowing the IRS to act as your savings account. The only difference is that the IRS is not paying you interest.

Perhaps a better choice is to find an amount that allows you to break even tax-wise, and put the extra money in a sound investment. There is no reason to let the government hold onto your money rather than have your money work for you. Other common money mismanagement practices include failing to make and stick to a budget, spending more for a product than it is worth, and forgetting to save for a rainy day. You should also take advantage of all the free money available to you, like maxing out your retirement plan by getting the full employer contribution possible. Call us for advice on how to take steps to make sure you are doing all you can to manage your money properly.

 

Call a Plantation, Florida debt relief attorney today for more information about money management techniques. Schedule an appointment to learn more.

How Bankruptcy Can Benefit A Small Business

Even though most all bankruptcy cases are filed by individuals or families, a business can also seek the protections offered by the bankruptcy laws. When a business is struggling to pay its vendors or to make payroll, it may be time for a reorganization. Business bankruptcy can be beneficial to a small business because it offers some breathing room and a chance to get back on track.

The Small Business Administration has a good rundown of the types of bankruptcy available to a small business:

  • Chapter 7: while usually reserved for individuals, if your business is a sole proprietorship, or so tied up with your personal finances, this chapter may work best for you. This is especially true if your plans are to close the business rather than continue in operation.
  • Chapter 11: if, on the other hand, you want to keep your doors open, a Chapter 11 is a better fit. This type of bankruptcy allows you to stay in business, and repay your creditors over time.
  • Chapter 13: also typically reserved for individuals, Chapter 13 can be filed by a small business and allows for a reorganization of debt.

There are also options available to farmers, and fishermen. The type of bankruptcy you file depends on your plans, and your needs. Whatever choice you make, rest assured once you file the calls and collection efforts will come to a stop. This benefit may be the biggest of all, because it gives you the opportunity to focus on your business and its growth rather than on fielding collection attempts.  You might also consider a workout or other loan modification for your largest debts, which could give you the time and flexibility to pay smaller debts and free up capital. For more information about filing bankruptcy for a small business, call our office today.

 

If you have questions about how bankruptcy can benefit your small business, call our office for answers. Call a Plantation, Florida debt relief attorney today for more information.

Has Bankruptcy Reform Reduced The Number Of Filings?

When Congress overhauled the bankruptcy laws about 10 years ago, the goal was to provide a higher percentage of repayment of at least a portion of some debts, crack down on abusive filings, and to reduce the overall number of consumers seeking the protection of bankruptcy. An elaborate mathematical computation was put in place that dictates what type of bankruptcy a person is allowed to file, and other changes as to exemptions and the amount that must be repaid for certain pieces of collateral (like cars) was changed. The result of the new law was confusion. Too many Courts were unclear on how to apply the new rules, and as a result there has been abundant litigation regarding several key bankruptcy issues. But, perhaps the most interesting thing is in figuring out if the changes had an impact on the volume of filings.

While in the year immediately after reform the number of cases decreased, the same cannot be said of the years following:

●          Just five short years ago, the number of filings was up by over 1/3.

  • California leads the pack with the number of filings, at close to 60,000 in a single quarter!
  • In just the middle district of Florida, the number of filings in the first five months of 2015 topped 10,000.

These numbers show reform had an impact on the number of filings, but only initially. As more issues are decided, and the rules made clearer, more people are considering bankruptcy as an option. Of the number of cases filed, nearly 100% of them are by individuals and families. The latest information is that 98% of filings fall in this category, and of those 65% of them are the more desirable Chapter 7. The bottom line is that when the economy is sluggish, people will use bankruptcy as a way to manage overwhelming debt. We have a handle on all the changes, and even evolving local rules and procedures and can help you take charge of your financial future. Call us today to find out more about bankruptcy as a solution to burdensome debt.

 

If you have questions about bankruptcy, call our office for answers. Call a Plantation, Florida debt relief attorney today for more information.

Are Overdraft Charges Collectible?

Having too little money in the bank can result in checks or charges from your debit card going unpaid. This is referred to as having insufficient funds, and the situation can be made worse by the lending institution’s charge of a fee for having an item presented to them without enough funds to cover the amount. All of the sudden you not only owe the original charge, but also a fee to your bank. If there are more than one items sent back for insufficient funds, the fees quickly add up and pretty soon your account balance can reach drastically negative levels.

A question that frequently arises in cases like this is whether the bank is entitled to collect the overdraft fee? Well, in some instances what has happened is that after consumer simply stop using the account, a debt buyer comes along and buys the debt for pennies on the dollar. Thereafter, collection efforts ensue. In order to avoid this happening to you, there are options at your bank, when setting up your account. These include:

  • Opting out of the ability your bank has to accept an item when funds are too low to cover the amount. This would mean your bank refuses to honor the charge, and the only entity seeking payment is the vendor.
  • Overdraft protection, which works to have funds automatically transferred from another account to your checking account when an item is presented and funds are too low.

It is important to set up a checking account in a way that works for you. If you do run into trouble, it matters who is doing the collecting when it comes to terms of what law is followed. In the debt buyer situation, the Fair Debt Collection Practices Act must be followed, because the debt buyer is not the original creditor. However, if the bank is seeking repayment, the FDCPA does not apply because the bank is the original creditor. This distinction is important because certain protections are given to consumers by the FDCPA which are not present when the collector is the original lender. For more information on what to do about overdraft charges, call our office.

 

If you facing collection of NSF fees, call a knowledgeable attorney to discuss your options. We can help you understand your choices and make a decision that works for you. Call a Plantation, Florida debt relief attorney today for more information.

Does State Or Federal Law Govern Debt Collections?

If you are unable to meet your monthly obligations as they become due, you may be facing a foreclosure or wage garnishment. The hardship these circumstances can create on you and your family is great, and this is all the more true when a debt collector engages in harsh or abusive debt collection practices. Fortunately, there are laws in place to protect consumers from harassment through debt collection, and if you are a victim of harassment you should stand up for yourself.

While each state has its own version of consumer protection laws in place, the main law that governs debt collections is federal. The Fair Debt Collection Practices Act prohibits the following things:

●          Misleading communication from a debt collector.

  • A misstatement about the amount due, or a demand for immediate payment. You are required to be given 30 days to dispute the validity of the debt, and also to ask for identification of the original creditor.
  • Abusive or harassing debt collection techniques, such as threats of jail time or physical harm for nonpayment.
  • An attempt to collect a debt that is not due, or that is outside the applicable statute of limitations for collection.

In order to determine if a debt collector has engaged in any of these practices, careful review is required. If you believe you are being treated unlawfully, send a written request that the collector “cease and desist” communication with you. Once you have done that, call our office. We will review the facts of your case, including any recordings of telephone calls between yourself and the collection agency as well as all documentation you’ve received. When we are able to identify a violation of the law, we will take steps to hold the collector accountable. You are entitled to damages for each violation committed, and the collector can also be held responsible for your attorney fees in having to fight for your rights.

If you have questions about collection practices, contact our office for help. We will explain your options, so you understand your choices and can make a decision that meets your needs. Call a Plantation, Florida debt relief attorney today for more information.

What Is Subprime Lending?

If you are in the market for a loan, it is important to know your options. Loans with the most favorable repayment terms are typically given to those with the best credit ratings. However, this does not mean a person with a few dings to their credit cannot obtain financing. Alternative forms of lending are available, many of them through a subprime lender. Before agreeing to take out a loan with a subprime lender though, check around and know the facts.

Subprime lending is defined as a loan that is made at an interest rate above the prime rate. Reasons why a lender might offer a subprime loan include:

●          Poor repayment history, or too many delinquent accounts on your credit.

●          A low credit score.

●          A foreclosure or bankruptcy appearing on your credit.

●          A history of late payments.

If subprime loans are offered at higher rates, you might be wondering why it would be beneficial to agree to these loans. The answer depends on your circumstances. If you are fresh out of bankruptcy, a subprime loan can be a good way for you to being rebuilding credit. This is, of course, provided you make timely repayment and don’t default on the note. A subprime loan may also have a rate that is actually lower than some credit card rates. If that is the case, this type of loan can be used to pay off the higher rate card and actually end up saving you money in interest. As with all lending, the key is to find a loan that fits your budget, and to stick to your budget. If your credit is less than perfect, and most people’s credit falls into this category, a subprime loan may be your ticket to getting the funds you need for emergencies and the necessities of life. After a history of good repayment on a subprime loan, your credit can improve to the point where you begin qualifying for more traditional loans. When that happens, you are able to keep more of your hard earned money in the bank and can begin building a nest egg for your financial needs rather than taking out any loan.

 

If you have questions about subprime lending, let an experienced attorney help you. Call a Plantation, Florida debt relief attorney today for more information.