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Two Payday Loan Horror Stories

It is always important to read the “fine” print when agreeing to anything.  This is especially true when signing up for a payday loan.  Interest rates are often 300% – 1000%.  Sometimes referred to as “predatory loans”, payday loans are designed to give the customer money quickly and allow them to pay the loan and interest back over time.  Read on to learn about two truly terrible scenarios in which desperate people agreed to terrible payday loan terms.

Payday Loan Victim Number One – “Bob”

Bob’s story began over 12 years ago.  Due to a medical emergency, Bob became the only earner in the family.  Medical bills totaling at over $20,000 and recent events, forced Bob to take out five payday loans which totaled at $2,500.  These loans required Bob to make two $95 payments each month per loan.  Keep in mind the principal balance of each loan was only $500.  It took Bob and his wife 5 years to pay off the loans and, in the end, they paid over $50,000 in interest.  As a result, Bob and his wife lost their home.

Payday Loan Victim Number Two – “Ed”

Ed, a veteran and Social Security beneficiary, ran into some car trouble.  The repairs were estimated at $400.  Unable to cover the costs, Ed went online and took out a $400 14-day loan.  In most cases, if a person cannot pay off a 14-day loan in the agreed upon term, there is a renewal option.  When the loan is renewed, the borrower must pay a fee and interest continues to accumulate.  In an attempt to pay off the existing loan, cover his rent, and avoid bank overdraft fees, Ed took out more online loans.  In the end, Ed borrowed over $3,000 and owed well over $12,000.  He subsequently lost his apartment and became homeless.

Payday Loan Quick Facts:

  • Over 12 million payday loans are handed out each year in the United States.
  • The 12million loans have fees totaling at over $9 billion.
  • A 14-day loan averages $55 in fees if paid off on time.
  • The average payday loan borrower is in debt for 5 months of the year due to loan fees and interest.

Before you subject yourself to the horrors that come with payday loans, take a look at your other options.  If you have unsecured debt such as credit card or medical bills, you may be able to get it forgiven utilizing a tool such as bankruptcy.  Contact Elias Dsouza today for a free consultation and take control of your financial situation once and for all.

Is Refinancing Your Home to Pay off Credit Card Debt a Good Idea?

Having credit card debt is just a way of life for most people in America.  However, there may come a time when those people are ready to be free of the burden.  People with credit card debt that own a home or have equity in their financed home often look to their home equity for a way out.  This can be a great tool, but sometimes a refi leads to a higher monthly payment.

Why Would Someone Choose to Use Home Equity to Pay off Credit Card Debt?

On paper, it may seem obvious that having a loan with a much lower interest rate (mortgage) is better than one with a much higher interest rate (credit cards).  People may consider this option because:

  • Credit cards often carry an interest rate 3 to 4 times higher than that of a mortgage.
  • Credit cards carry the stigma of “bad” debt.
  • Loan consolidation is often thought of as a good thing.

When Using a Home Refi to Handle Credit Card Debt Is a Bad Idea

Some experts say it is always a bad idea.  When you utilize a cash out refinance loan to pay off credit card debt, you convert unsecured debt (credit cards) to secured debt (mortgage/home equity loan).  Secured debt is linked to an asset.  If payments are missed and the bank decides to foreclose, they can take the home as collateral and sell it to offset debt.  Because it is unsecured, credit card debt can be forgiven or settled using a tool such as bankruptcy.

When Refinancing Your Home to Pay off Credit Card Debt Is a Good Idea

For a home refi to be a good choice, there are considerations: 

  • The “rule of thumb” when considering a home refi to offset any debt is to avoid it if the resulting refinanced loan value equals more than 80% of the value of the home.
  • If the resulting monthly loan payment is lower than the sum of the mortgage payment and credit card payment each month.

If you are feeling overwhelmed with debt or you are behind on payments, a debt restructuring could be the answer.  Before you make a decision regarding a home refinance, contact Elias Dsouza to discuss, bankruptcy, debt settlement, credit counseling, and much more.  Elias has been assisting people with credit card debt for over 15 years.

PG & E to File Bankruptcy Amid Lawsuit over California Fires

In 2018, fires ravaged just under 2 million acres of land.  Recent evidence suggests that a local utility company’s equipment may be responsible for the catastrophic event.  PG&E may be on the hook for expenses totaling at around $30 billion.  Top brass has decided they cannot afford that so they plan to file for bankruptcy under chapter 11.

PG & E

PG&E is the holdings company for California’s largest utility company, Pacific Gas and Electric.  They currently employ about 20,000 people.  They incorporated in 1995.  The fires of 2018 are not the company’s first brush with disaster.  In 2017, the company was held responsible for a fire outbreak due to insufficient brush trimming around power lines.  This catastrophe resulted in the death of 44 people.

The 2018 Fires

In the summer of 2018, over 8,000 fires ravaged central and southern California.  During the course of these fires, over 80 people were killed.  Just under 2 million acres of land were affected.  The estimated damage caused by the fires is around $30 billion.  In California, liabilities laws allow the utility companies to be blamed for disasters even if they followed all safety regulations as long as their equipment is at fault.

Reluctance to Bail Out PG&E

In the “too big to fail” age, essential companies such as utilities providers are often bailed out when faced with adversity.  Utilities play an extremely important role in modern society.  California state legislators have already expressed their reluctance to offer a hand to PG&E.  They are quoted as saying there will be no “golden parachute”.  This may be partially due to the fact that the 2018 fires were not the first strike against the company (2017 fires).

The Inevitable Chapter 11 Bankruptcy

Since PG&E was implicated in the fires, their stock price has dropped over 65%.  When asked about their ability to cover the damages caused by the fires, the company said they have about $1.5 billion in cash on hand.  Legislators stopped just short of demanding that the utility company file for bankruptcy under chapter 11 to allow for restructuring of debt.  While restructuring, those in need of the funds the most will be prioritized.

Bankruptcy is an important tool for people who find themselves in over their head.  If you are behind on mortgage, medical, or any other type of payments, there may be a way out.  If you are interested in reclaiming your life, contact Elias Dsouza at Dsouza and Strachan Lawgroup.  Elias has been helping people reclaim their life for over 15 years.

Christmas Debt is Nothing to Celebrate

Wanting to give the people you care about a Christmas present is honorable.  The least sexy thing to think about during this season is debt.  However, keeping debt in mind could be essential to ensuring you aren’t paying interest for the next 6 months. 

How Much Debt Did U.S. Shoppers Take on in 2018?

According to an article on MarketWatch, 44% of U.S. shoppers assumed more than $1,000 in debt this Christmas.  The average amount of debt is $1,054.  5% of these shoppers racked up more than $5,000 in debt.  This is a 5% increase from last year. 

If a person racked up $1,054 in debt and paid a minimum of $25 per month, they would be paying off the balance until at least 2023. 

Ways to Avoid Christmas Debt in the Future

The best way to avoid Christmas debt is to make a list of people you know you will buy presents for and create a budget.  Then, stick to that budget.  Other ways to avoid accumulating Christmas debt are:

  • Making sure you do not impulse shop. Those last second decisions can be costly and they are outside of your budget.
  • Buying things online. You are able to compare prices much more easily online than in-store and you can see what in-store prices are.
  • Paying up front for everything you can. Do not put yourself in the position to pay off interest down the road.
  • Buying Christmas presents throughout the year when sales arise. Companies know when people are shopping last minute and they often raise prices to capitalize on desperation.
  • Considering gifts that are thoughtful rather than expensive.
  • Defining spending limits with your family, spouse, and friends.

Buying Christmas presents is not a bad thing even for people with limited spending money. The key is to be smart about it. If you miscalculated or even just went all out in 2018 and overextended yourself, you may need help getting back on track.  Elias Dsouza is an experienced debt negotiator.  Contact Elias for a free consultation and put yourself back on track.

3 Celebrities Who Have Lost All of Their Money at Least Once

Some of the most successful people make the worst financial decisions.  Being good at singing, acting, or making music and movies does not always mean a person knows how to handle the things that come with success.  To be fair, sometimes well thought out investments just do not pan out.  Keep reading to find out just how bad things can get when celebrities blow all of their money.

Michael Jackson

Some estimate that the King of Pop died with over $500 million in debt.  During his amazing career, he sold more than 100 million albums.  He signed a recording contract with Sony worth around $64 million in the early 90’s.  Unfortunately, his spending habits were extraordinary.  He spent over $14 million to build the Neverland ranch which included such money pits as a zoo and carnival rides.  He settled a law suit with the parents of a young boy who accused Jackson of inappropriate behavior with a minor.  The settlement cost Jackson $22 million.  One of Jackson’s accountants once reported that the singer was spending $20 – $30 million per year more than he earned.

Mark Twain

Being one of the most successful authors of the 19th century was not enough for Mark Twain.  A self-described “risk taker”, Twain made plenty of bad investments such as:

  • A publishing house – Twain’s publishing house operated so terribly that when he closed it, he owed book making companies, authors, and investors $2 million (in today’s money). One of the publishing house’s more egregious flops was The Art of Sketching by Pope Leo XIII.
  • Protein powder – Mr. Twain invested $30,000 ($910,980.72 in today’s money) in a protein powder company which made a product called Plasmon. The product never took off and he lost his investment.

A month before declaring bankruptcy, Twain transferred all of his assets to his wife.  When he declared, he was more than $80,000 ($2,145,004 in today’s money) in debt.

Nicholas Cage

Mr. Cage’s financial exploits are well known, but it is always fun to do a quick recap:

  • IRS tax lien – at one point, Nicholas owed the IRS $6 million in unpaid taxes.
  • Property investments – Mr. Cage owned 15 residences at one time. He has owned two castles, a haunted house, and a deserted island in the Bahamas.
  • A dinosaur skull – enough said.

His net worth was once $150 million and now it is $25 million (still not bad).

If you have made some poor financial decisions, you may need help.  Bankruptcy can be a great tool if you use it properly.  If you are considering bankruptcy, contact Elias Dsouza at Dsouza legal group.  Elias has been guiding people through this complex process for over 15 years.

Common Mistakes People Make When They Are Sued by a Debt Collector

It is a shock when you are served a court summons and informed that a debt collector is suing you.  You feel like a bad citizen, a low life, you feel violated.  If you are notified that you are being sued by a collector, now is not the time to hide. Read on for tips on what to do in this scary situation.

They ignore the law suit

The absolute worst thing you can do when you receive a court summons is ignore it.  When a court is involved,it is not going away on its own.  You have a limited window of time to respond to the summons.  If you ignore the summons and miss court, you get what is called a default judgment. This means you automatically lose and have to pay the debt as well as court costs for the plaintiff.

They admit guilt

A decent person looks at a law suit like this and probably feels like they are in the wrong.  They think,“well, I do owe this debt”.  You cannot admit to the plaintiff that you are guilty. When you defend yourself in court (or an attorney defends you), you are saying the debt collector does not have the right to this debt.  Do not admit guilt.

They assume they have no rights

It is only natural to feel bad about owing a debt and being sued for it, but that does not give debt collectors the right to harass you day and night.  The FairDebt Collection Practices Act (FDCPA) was created to protect you in situations like this.  The debt collector is not allowed to act like the mob.  They cannot threaten you, call you at odd hours, or deceive you in any way.

They think they cannot afford protection

If you are sitting there with a new summons in hand from a debt collector, now is the time to get on the computer and start shopping for an attorney.  Just like any other service,you often get what you pay for.  Do your research and choose an attorney that will go to bat for you and communicate with you throughout the process.  While it is possible to defend yourself in court, you should think about the repercussions if you are not secretly a law genius and lose your case.

If you are being sued by a debt collector, you need help.  If you let them, debt collectors will bully you and get as much out of you as they can. You need the skills and experience of Elias Dsouza with Dsouza and Strachan Lawgroup group.  Elias has been protecting people from debt collectors for 15 years.

Do Not Skip Court: A Tori Spelling Story

A default judgement is defined as a binding judgement in favor of one party based on the inaction of the other party.  A default judgement can be handed down if you skip court.  Even if you do not think you will win your case, you should at least show up so you have a chance.  In 2017, Tori Spelling failed to respond to City National Bank’s allegations and a default judgement was levied against her.  Now she has to pay $220,000.

The Debt

In 2012, Tori and her husband Dean McDermott took out a $400,000 loan.  The couple quickly fell behind on payments and in 2017, the bank took them to court.  According to court documents, the borrowers still owed about $188,000 for the loan and an additional $17,000 which Tori over drew from her checking account.   Unfortunately, the couple had just been taken to court by American Express for failure to pay over $87,000 in credit card charges.  Needless to say, their spending was out of control.

The Court Date

Instead of responding to Citi National’s court claims against them, Tori and Dean decided to completely ignore the case.  They did not respond to the court via phone or mail.  Ultimately, they decided to skip their court date as well which led to a default judgement for Citi National.  A default judgement handed a win to the bank and the couple was immediately ordered to pay back over $200,000.

She claims that her financial issues stem from a lavish upbringing.  In her memoire, she stated “It’s no mystery why I have money problems. I grew up rich beyond anyone’s wildest dreams. I never knew anything else.”  She went on to say, “Even when I try to embrace a simpler lifestyle, I can’t seem to let go of my expensive tastes. Even when my tastes aren’t fancy, they’re still costly. I moved houses to simplify my life, but lost almost a million dollars along the way.”

There are plenty of reasons people fall behind on credit card or mortgage payments, but there is no reason to let it ruin your life.  You have options.  With the skills and experience of a debt defense attorney like Elias Dsouza, you can reclaim your life and get the fresh start you deserve.  Contact Elias for a free consultation.

5 Celebrities Who Have Had Their Wages Garnished

  • Posted On December 4, 2018
  • Categorized In News
  • Written By

Wage garnishment can be ordered by a court when a defendant does not show up or is just ignoring previous court mandates such as child support and/or tax payments.  These rules do not just apply to everyday people, celebrities are subject to these mandates as well.  What happens when they ignore the court ruling?

DMX

In 2014, rapper DMX was taken to court by his ex-wife for unpaid child support payments and “other” expenses.  The rapper had, what some would call, a failed album in 2012 (Undisputed), but he was still pulling in $15,000 per month in royalties.  The judge ordered Universal Music Publishing to send those royalty checks to the ex-wife; $10,000 per month for child support and $5,000 per month for those “other” expenses.

Will Smith

Will had an extremely successful run in the late 80’s as a rapper.  He won a Grammy.  He earned a few million dollars.  Unfortunately, he was 18 years old and apparently forgot to pay taxes on his earnings for a few years.  The IRS took action against him and began repossessing assets.  He reportedly owed about $2.8 million in tax payments.  At the brink of bankruptcy, NBC signed him to star in “The Fresh Prince of Bel-Air”.  Sources say the IRS garnished 70% of his wages for the first 3 years of the show.

Charlie Sheen

We are all aware of actor Charlie Sheen’s personal problems, but did you know his wages were garnished in 2011?  This is one of the more interesting cases because he was not behind on payments.  Sheen’s ex-wife took him to court to increase the child support payments to $55,000 per month because she stated that his spending habits were likely to leave him unable to make payments in the future.  She won the case and a judge asked Warner Bros. to send money directly to the ex-wife.

Evander Holyfield

In 2012, the Georgia Department of Human Services went to court on behalf of Holyfield’s daughter.  The former boxing champ racked up a bill of over $350,000 in missed payments and hadn’t made a payment at any time in the child’s 18-year life.  The DHS asked the judge to order Holyfield to go to jail and garnish wages until the debt was paid.

Allen Iverson

In 2010, a jeweler sued Iverson for not paying a $375,000 bill.  The judge ordered Iverson to pay it.  Two years later, the former MVP had still not paid the bill and the jeweler took him to court again.  This time, they asked for over $850,000 for the balance, fees, and interest.  The judge ruled in their favor.  Iverson still did not pay the bill.  Fed up with Iverson’s inaction, the judge took control of one of Iverson’s accounts and began garnishing payments.

Money problems are not exclusive to celebrities.  If you are having trouble making payments on your home, car, or any other asset/debt, you may have options.  Contact Elias Dsouza to see what those options are so you can move on with your life and get back on track.

How to Keep Your Car During Chapter 7 Bankruptcy

It is a common misconception that you have to give up everything valuable during chapter 7 bankruptcy.  You can file a car redemption motion.  This option could be a game changer because it saves you money in the long run.  A car is an essential asset when it comes to getting to and from work, hauling the kids around, and performing a multitude of other everyday actions.

What is Vehicle Redemption?

Vehicle redemption is a mechanism built into chapter 7 bankruptcy which allows you to file a motion to buy your car for fair market value.  This means you must pay the lender in the amount of the determined value of the car in one lump sum.  This may be difficult in some cases, but the upside is that you get to keep your vehicle and avoid paying thousands in loan servicing interest payments.  If you do not have the money for the lump sum, companies such as 722 Redemption may be able to give you a redemption loan which would allow you to keep your car.

It should be noted that you may not be able to redeem a work vehicle.  Car redemption is for personal and family vehicles in most cases.

Before You File for Vehicle Redemption

If you plan on filing a vehicle redemption motion during bankruptcy, there are some steps to take before you do so:

  • Determine your vehicle’s value – there are a number of ways to do this.
  • Notify your lender of the motion – you need to let your lender know that you are filing for chapter 7 bankruptcy and that you intend to file a motion for vehicle redemption. You and the lender must agree on the value of the vehicle.  You should have evidence of your vehicle’s value during negotiations.  If you cannot come to an agreement, you may need to use your evidence to prove to the court that your valuation is more accurate.

Chapter 7 bankruptcy is a very complex process and you should not do it alone.  If not handled properly, you could harm yourself in the long run.  Enlist the services of a skilled and experienced attorney.  Elias Dsouza of Dsouza and Strachan Lawgroup Group has been helping people navigate bankruptcy for over 15 years.