How Does Bankruptcy Work?

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Bankruptcy was created to protect the financial health of the jobless and the infirm by eliminating high levels of debt. There are two ways to file for bankruptcy, each with its own rules. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (Bankruptcy Reform Act), made many changes in bankruptcy law.

Under a Chapter 7 bankruptcy filing, many debts are eliminated, but the filer must liquidate personal assets to pay down some of the debt. Personal property is sold by a bankruptcy trustee, who then uses the proceeds to pay creditors. Some assets are exempt if they are considered necessary to support the filer and any dependents, but state and federal laws vary widely. In general, a percentage of home equity and disability benefits are exempt, and Chapter 7 filers may be allowed to keep any money or property they obtain after filing. Chapter 7 bankruptcy can be filed once every eight years.

A Chapter 13 filing does not erase debt. Rather, it requires the filer to set up a repayment plan, typically over a three- to five-year period, in exchange for keeping personal assets. The Bankruptcy Reform Act of 2005 states that anyone with income above the state median will have to file for Chapter 13 and pay back at least a portion of their debts. In general, homes will only be protected if owned for at least 40 months. Chapter 13 bankruptcy can only be filed once every two years.

Certain debts cannot be erased under any bankruptcy filing, including alimony, child support, property settlements, criminal judgements and fines, student loans, and most taxes. In addition, a bankruptcy filing will not allow you to keep property that secures a loan, such as an automobile or home, unless you repay the loan.


Who Should File?

In general, filing for bankruptcy should be avoided. Filing, however, may help to begin a financial recovery if:
You cannot meet debt obligations on current income.
Attempts to negotiate payments with creditors have failed.
Your ratio of debt to annual income is 40% or more.
Previous attempts to reduce debt have failed, particularly with the help of a credit counselor or debt reduction plan.
You have charge-offs on your credit history. Charge-offs appear when you have debts that are more than 250 days past due that are written off by your creditors for accounting purposes. A series of charge-offs and bankruptcy are both black marks on your credit report, but a bankruptcy filing demonstrates that you have at least dealt with the debt.

Source: National Institute for Consumer Education


Alternatives to Bankruptcy

Bankruptcy, and the resulting credit difficulties, is not the only way to manage excessive debt. You can try to negotiate a payment plan with a creditor and perhaps reduce your debt. Credit card companies faced with the rising number of bankruptcy filings may prefer to get some of what's owed them rather than have the entire debt erased.

You can conduct these negotiations on your own, with the help of an attorney, or through a professional credit counselor, who specializes in credit negotiations and will charge less than an attorney for the service. Payments for the negotiated debts can be deducted directly from your paycheck by the counseling service, which then distributes the money to creditors. Credit counselors will also work with you to rebuild your credit and improve your long-term financial situation.

Though the stigma surrounding bankruptcy has lifted, it should still be seen as a last resort after all other methods of settling debt have been exhausted. The thought of your debt being erased may be attractive, but the financial hardships bankruptcy can create far outweigh any benefits.

7 Things We Can't Live Without

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This recession that's turned our lives upside down has changed the way we think about life's necessities. What we thought were necessary things in out lives are now considered luxury's. We have made conscious decisions to cut back lifestyle for for a more frugal life.

Sales of cars, homes and appliances have plunged. We are finding out that we can live on a lot less and still function. It's not a choice we freely make but one forced on us. The question is what things in your life have you found that you can't live without. If you asked 100 people that question you would get a wide range of answers according to their list of creature comforts that they have become used to over the years. These things that make life a little more easy or bearable. 

1. Portable computers.

Whether it's cheap net books, iPads or laptops these bits of technology have become ingrained in our lives. We run our lives out of them. We shop on them, pay our bills, socialize, get our news and communicate on them. They make life easy and convenient. I can't live without my computer.

2. High-Speed Internet Access

If you have been using Internet access for any number of years you have used dial-up and know how painfully slow that was. But the day you started to use cable or DSL service you were not ever going back. Now the Internet was very usable. You could hook up a router and everyone in the house could be online. It was like night and day and the convenience was like"Wow". Could you live with out it. Probably not. I would cut back on everything else before removing my DSL. I would give up the dryer, dishwasher, cable TV, telephone, and the dog rather than lose my Internet. I can't live without my Internet.  

3. Smart Phones

When smart phones first came out they were priced well above the price of regular cell phones. I said I would never buy one of those expensive thing. But as time rolled on the IPhone came out and I was sold. Now I do everything on my phone. From banking to blogging. It's my GPS and my mailbox. My entertainment and my knowledge finder. It so covienent, it does everything for me quickly and efficiently. Sorry can't live without it.

4. Coffee

Here is a special subject close to my heart. Coffee. I have started everyday of my adult life with a nice hot cup of coffee. It's ingrained in our culture. To not start the day with coffee is like not to breathe. It's a pleasant habit and a rewarding experience. It holds a special place in our lives. Sorry can't live without it.

5. Pets.

Our pets are as important to us as members of our own family are. They keep us company and give us love. We send them for grooming and buy them clothes. They are like little hairy children to us. To give them up would be unthinkable. We would give up so many things to not lose them. Sorry, can't live without our pets.

6. TV and Movies.

We have cut back so far already. We are saving money everyplace else, please don't take the TV and Movies. Of course this includes the cable, too. We quit going to the mall and sporting events, shows and vacations. The TV is our only source of entertainment. So I can justify my 42" plasma screen with HD. We don't do anything else so can we keep it? Sorry, can't live without TV.

7. Drinking.

Yes, I mean booze. Also beer and wine.  Obviously people have cut back going out. During hard times you know people drink a lot more to self medicate. To give this item up is going to very hard. Maybe because of addiction problems. But also because we love the stuff. More people are drinking at home to save money. So, sorry can't live without drinking.

Even faced with hard financial decisions, loss of jobs and money there are somethings we can't live without. We will give up other things to have some creature comforts. The meaning of the words want and needs have become blurred. What were once luxuries are now necessities. What things can you not live without?    

Veterans Day - Thank You Soldiers

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God Bless the men and Women that have kept us free. Also Happy 235th Anniversary to the Marines.

15 Top Owners Of Government Debt

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As the US government spends an unprecedented amount of money to fix the nation's economy, there is an equally great need to raise the cash to pay for it. This is accomplished through borrowing, whereby Uncle Sam sells Treasury securities of varying maturity.
For investors, the government bills, notes and bonds are considered a safe financial product because they have a guaranteed rate of return, based on faith in future US tax revenues. The government has been partially funding operations via Treasury securities for decades.
This borrowing adds to the national debt, which has climbed to a staggering $13.72 trillion and is rising every day. Much of that debt is held by private sector, but about 40 percent is held by public entities, including parts of the government. Here's who owns the most.

15. Taiwan

US debt holdings: $130.2 billion
Taiwan's holdings of US debt have fluctuated between $120.5 billion and $152.4 billion over the past year.
To date, Taiwan holds $130.2 billion in Treasury securities, which is only $1.2 billion more than the next highest national debt purchaser, Russia, whose holdings stand at $129 billion.

14. Hong Kong

US debt holdings: $137.8 billion 
Hong Kong is one of the world's largest holders of US debt, although in 2010 the region has cut its holdings by approximately $10 billion from January levels.

13. Caribbean Banking Centers

US debt holdings: $159.1 billion 
The US Treasury identifies this group as institutions in the Bahamas, Bermuda, the Cayman Islands, Netherlands Antilles, Panama and the British Virgin Islands. Holdings are currently listed at $159.1 billion, up about $30 billion from a year earlier, but still off the group's high of $213.6 billion in March 2009.

12. Brazil

US debt holdings: $165 billion 
The South American economic giant has $165 billion in holdings, according to the Treasury. Brazil’s investment into US debt has been fluctuating slightly over the past two years, with current holdings testing the high of $170.8 billion hit in Feb 2010.

11. Oil Exporters

US debt holdings: $226.6 billion 
Big oil means big money... and big investment into US debt.
Included in the group of oil exporters are Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria. The group combines for a total of $226.6 billion, which is a slight increase from the $190 billion to $220 billion range they have maintained in recent history.

10. Insurance Companies

US debt holdings: $260.6 billion 
According to the Federal Reserve Board of Governors, insurance companies hold $260.6 billion in Treasury securities. This group includes property-casualty and life insurance firms.

9. Depository Institutions

US debt holdings: $273.7 billion 
As of March 2010 (the most recent numbers currently available), the Federal Reserve Board of Governors lists depository institutions as holding approximately $273.7 billion in US debt. This group includes commercial banks, savings banks and credit unions and has nearly tripled from Q4 2008, when holdings stood at $105 billion.

8. United Kingdom

US debt holdings: $448.4 billion
Britain currently holds $448.4 billion in US debt. The country has been ramping up its debt in 2010, rising from $218.8 billion in January to $448.4 billion in the most recent numbers, which have them doubling in an 8 month span.

7. State and Local Governments

US debt holdings: $534.7 billion 
US state and local governments have over a half-trillion dollars invested in American debt, according to the Federal Reserve. The level of investment has remained very stable over the past three years, moving within the range of $534.7 billion and $550.3 billion from 2006 to 2009, and although the amount has been increasing, the total value of holdings are off the highs. However, this number does not include an additional $181.6 billion of holdings of treasury notes in state and local government pension funds.

6. Pension Funds

US debt holdings: $643.8 billion
Pension funds control large amounts of money, reserved for personal retirements, and thus are obligated to make relatively safe investments. This group includes both private and local government pension funds, totaling $643.8 billion. The private pension fund category also includes US Treasury securities held by the Federal Employees Retirement System Thrift Savings Plan "G Fund."

5. Mutual Funds

US debt holdings: $648.6 billion 
According to the Federal Reserve, mutual funds hold the fifth largest amount of US debt compared to any other group, although mutual fund holdings have diminished by nearly $120 billion since December 2008.
Including money market funds, mutual funds and closed-end funds, this group of investments manages approximately $648.6 billion of US Treasury securities as of March 2010, which are the most recent numbers available.

4. Japan

US debt holdings: $836.6 billion
A major US trade partner, Japan holds a huge amount of American debt, and has traditionally been one of the US's largest debt holders, currently owning $836.6 billion of treasury securities.

3. China

US debt holdings: $868.4 billion
The largest foreign holder of US Treasury securities, China currently holds $868.4 billion in American debt, although it is off the all time highs of $900.2 billion in April 2010.

2. Other Investors/Savings Bonds

US debt holdings $1.266 trillion
With the most recent numbers from June 2010, this extremely diverse group includes individuals, government-sponsored enterprises, brokers and dealers, bank personal trusts, estates, savings bonds, corporate and non-corporate businesses for a total of $1.266 trillion. Although the level of debt held in U.S. savings bonds has remained relatively constant since 2000, the broad category of "Other" investors has nearly quadrupled since reaching a four-year low in September 2007.

1. Federal Reserve and Intragovernmental Holdings

US debt holdings: $5.345 trillion
That’s right, the biggest holder of US government debt is actually within the United States. The Federal Reserve system of banks and other US intragovernmental holdings account for a stunning $5.345 trillion in US Treasury debt. This is the most recent number available (June 2010), and marks an all-time high.
About a decade ago, the total government holdings were "only" $2.5 trillion.

Car Insurance Discounts Are Waiting For You

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Insurance is a particularly expensive part of our lives. We have life, car, boat, disability and home insurance to pay; the costs add up quick. Insurance companies have to compete with each other so there is good competition between them. One of the ways they do this is discounts.

Car insurance has it's share good discounts. But if your not aware of them you'll miss out on saving money.

Here are a few of the discounts available to you:

Vehicle Equipment

Air Bag

You could save up to 25% for driver side air bags and 40% for full front seat air bags. These discounts apply to the medical payments or pip portion of your car insurance premium.

Anti-lock Brake System

Does your car have a factory installed anti-lock brake system? You could receive a 5% discount on the collision portion of the premium.

Anti-theft System

Cars with a built in anti-theft system could earn a discount of up to 25% on the comprehensive portion of your premium.

Daytime Running Lights

Vehicles equipped with daylight running lights as standard equipment could earn you a 3% discount on certain car insurance coverage.

Driving History & Habits

Five Year Accident Free Good Driver

If your driving record is clear for five years you may save up to 26% on coverage.

Plus if your insurance company carries accident forgiveness, your rates won't go up.

Seat Belt Use

If you and your passengers always wear seat belts you could receive up to 15% off the medical or personal injury protection portion of your premium

Drivers Education

Defensive Driving Discounts

If you have completed a defensive driver education course you may be eligible for some discounts depending on the state where you live.

Driver's Education

If your a young driver and you have completed a drivers education course you may earn a discount on most coverage.

Good Student

Full time students with good grades can receive up to a 15% discount on their coverage.

Drivers Affiliation

Emergency Deployment

As a member of the armed forces fighting in wars overseas you are eligible for discounts of up to 25%.

Military

If your in the military on active duty, retired from the military, or a member of the National Guard or Reserves, you may be eligible of up to 15% of your premium.

Partnering Organizations

Some insurance companies have partnered up with various clubs and organizations to give discounts on your auto insurance premium.

Senior Level Federal Employees

If you have a senior-level job in the government, some companies give up to 8% discounts on your premium.

Customer Loyalty

Multi-Car

There is a discount if you insure more than one car on your policy and it may be up to a 25% discount.

Multi Policy/ Multi Line Discount

When you insure your car and also have your homeowners, renters, condo or mobile home policy with your car insurer you could get a discount.

Renewal Discount

For having multi year renewal with your insurer you can receive a loyalty discount.

With increasing demands on our incomes we must find ways to save some money. Make sure you have all the discounts coming to you that you qualify for. Today it's so easy to buy car insurance, there is an auto insurance store on every corner. With all the competition and discounts, the consumer wins. Why can't health insurance be bought so easily?

4 Skills To Have If You Want To Succeed

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What do the leaders in a business have that you don't? Very few people rise to the top of an organization and lead it successfully. So what attributes do they possess, what skills, and knowledge do they bring to the table.

Business brings with it a daily supply of problems. They may include many different types of issues. They all have to be addressed. The hard part, the skill that separates us from the leaders is their ability to determine the critical issue of a conflict. They have the ability to listen carefully and spot the real issue of any situation.

 Issue Discernment
The problem is for the skilled listener is to cut through the distractions, spin and noise. Listening and asking the right questions because you need to understand the facts of a problem. You must have the ability to get to the underlying issue by cutting through the motivation and personal agenda of all you talk to determine the facts. Cutting away the fat of the problem till you get to the meat of the issue. If you can do that, you will succeed.

 Ability To Lead Change
Now that you have identified the issue at hand, it's time to work a solution. Here you will deal with upsetting the status quo. You have to convince people to change direction. This is sometimes tough to do because habits are hard to break. You make enemies along the way, but you must be able bring your people along in through constant communication. The process must consist of explaining the benefits to the company and the employees who will implement it. You will have resistance, so with those people you may have to refine the process and ask the difficult people to join you in the changes. This set of skills is what real leaders have and what it takes to be in the top positions of business.

 Picking Your Battles
The third skill to have is the ability to choose you battles wisely. The best kind of battles are those with no opponent. For example instead of having a cost cutting campaign that will cause derision, have instead a quality improvement drive. A lot of negatives arise from the first, but who would not be on board with the second. The trick is to avoid direct confrontation with organized opposition.

But is it really a battle with no opponents? If your fighting against entrenched procedures, it will feel like a battle. The best battles are against those things that will have the greatest benefit across multiple departments. You will make many allies for future battles.

 Inspire People To Greatness
The last trait to have is to bring extraordinary results from ordinary people. Most organizations have ordinary hardworking people in them. If you can get them producing you be appreciated by your own superiors and boost your capital in the organization. The leader must know how to get exceptional results from the average producers in the company.

Your not going to have these great results come over night, but is possible to bring them up incrementally. To do this you must set up an environment of instruction and training that helps them make better decisions. With that you will get better results from their work produced. You may not get superior results at times, but you will get above average results which is the norm of your competition. The kind of environment you give your people for making better decisions and the bringing them along as an equal will get the results you want.All the while really leading as a dictator.

These traits I have listed are only a start. If you have the ability to lead, your own traits must come forward and be put to work. It's easy to discount the abilities the leaders in an organization have as inconsequential. Yet they are the leaders and your not.