Archive for the ‘Financial Services’ Category

In 1978, the U.S. Congress enacted the Bankruptcy Code, which governs all bankruptcy cases. Federal bankruptcy laws were enacted “to give debtors a financial ‘fresh start’ from burdensome debts.” While the Bankruptcy Code has been amended several times, the bankruptcy process is still complex—something that even the U.S. Courts recognize. To make matters worse, the Bankruptcy Code contains complex legal concepts and terms, such as “automatic stay,” “discharge,” “exemptions,” and “assume.” The complexity of the Bankruptcy Code often makes it difficult for individuals to understand and appreciate the various stages of bankruptcy. To help with this problem, this article provides a brief overview of the bankruptcy process and its various stages.

Bankruptcy Rules and Structure

The bankruptcy process is governed by the Federal Rules of Bankruptcy Procedure and local rules of each bankruptcy court. (more…)

If you are thinking to file for Chapter 7 bankruptcy, then you will have to pass the means test. You need to know that it is the means test which will help you know if you really earn below your means and thus, require filing Chapter 7 bankruptcy. The individuals who earn a good salary and cannot pass the means test may use Chapter 13 bankruptcy for paying off some of their outstanding debts. However, they might not be using Chapter 7 bankruptcy to eradicate all the debts.

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Millions of consumers are crushed under the burden of debt after the recent economic depression in the US. In such situations, people either rely on debt settlement services or they file for bankruptcy as a last resort. These two debt settlement solutions help people to start their financial life afresh. But before you select a debt settlement solution, it is essential to understand the differences between debt settlement and bankruptcy. A comparative analysis can help you make the right decision.

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TASC Supports New Mandates on Debt Restructuring Firms

Lawyers for the FTC have succeeded in arguing for several new restrictions on debt settlement companies, culminating in a new policy making legislation coming from the government.

Starting on October 27, 2010, for-profit companies that sell debt relief services over the telephone may no longer charge a fee before they settle or reduce a customer’s credit card or other unsecured debt.

In addition, the lawyers have successfully argued for mandated enhanced disclosure requirements. These are modeled on current and proposed standards from the industry’s leading trade association, TASC (The Association of Settlement Companies). TASC already offered guidance and regulations for debt restructuring companies, something I talked about in my earlier post: What to Look for in a Trustworthy Debt Settlement Company. before FTC lawyers and legislators got involved.

TASC originally opposed one key part of the proposed legislation: the prohibition of debt settlement companies from accepting fees from a consumer for debt settlement services prior to the actual settlement of the consumer’s debt.

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Photo By Andres Ruedas

It’s no secret that Better Businesses Bureau are not fans of debt settlements companies. According to the Better Businesses Bureau, most debt settlements companies do not do what they’re supposed to do, which is ensure that creditors are getting paid as agreed to by the consumer.  This would be a serious problem if it were true in most cases.

According to The Association of Settlement Companies, the Better Businesses Bureau “felt that the creditors had a right to get paid and that debt settlement obstructed that right. Included in this general line of thought was that debt settlement companies tell consumers not to pay their debts or that the business model ‘educates’ consumers not to pay their debts.”

Unfortunately for the Better Businesses Bureau, this could not be less true of most of the debt settlements companies out there today. (more…)

As political robocalls get flak from the FTC lawyers, who claim they’re in violation of the Telemarketing Sales Rule, I’m reminded of when TASC sent an open letter to the FTC last fall after FTC lawyers gave testimony before the U.S. Senate on abusive telemarketing.

According to the FTC lawyers, consumers who signed up for the debt settlement services were charged money up front and promised it back if the callers failed to deliver at least $2,500 in interest rate savings. Instead of arranging reduced interest rates, the complaint states, the defendants sent consumers instructions to pay down their credit card debts early, thus saving money on interest. Consumers who complained and demanded refunds allegedly were denied outright, got the run-around, or had a $199 “nonrefundable fee” deducted from their refund.”

At the request of  FTC’s  government lawyers, a federal judge shut down the three debt settlement companies in question. Then the FTC lawyers went on to argue for stricter telemarketing laws, specifically for the marketing debt relief services.

The Joshua Just take? Joshua Just, an attorney and debt settlement specialist points out that those companies definitely weren’t acting on the up and up, and deserved to be shut down. But debt settlement telemarketing helps reach those who need help getting out of debt – it’s a viable way to let people know about services that are helping thousands of citizens with financial struggles. According to TASC’s letter, a recent survey by the organization yielded results that show that:

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Even though debt settlement companies have helped thousands of Americans get out of debt, trustworthy debt settlement companies often feel few and far between. In truth, the industry sometimes gets a bad rap. While my own company, Debt Logic, operates under very strict principles of clear and honest transactions, sadly not every debt settlement company does and a few bad apples can spoil the reputation of the bunch. As a consumer, one way to protect yourself from a damaging business relationship is to spot the red flags of a shady company.

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Consumer Debt In America

What does the credit crunch mean?

The most recent consumer credit statistics issued by the Federal Reserve show that nationwide total consumer credit decreased at an annual rate of 5-1/2 percent in February 2010. In addition, revolving credit decreased at an annual rate of 13 percent and non-revolving credit decreased by roughly 1.5%. Basically, this means there’s less credit available for people to use right now but when you look at the numbers, you might be tempted to think that’s not necessarily a bad thing.

As of April 2010, the total consumer debt in America stands at roughly $2.5 trillion dollars. That’s approximately $8, 100 in debt for every person (including children) that lives in the United States. A 2007 study conducted by the National Association of Business Economics showed the combined threat of subprime loan defaults and excessive indebtedness posed the biggest short-term threat to the U.S. economy and we certainly saw the fallout from that in the 2008/2009 financial crisis.

So if the total consumer credit numbers declining, and there’s a little less easy credit floating around, you’d think most debters would use this time to reign in spending and focus on paying down their debt. Here’s why that’s not quite so easy.

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According to a recent Times article, Downturn Pushes More Toward Bankruptcy, March 2010 marked the highest month of bankruptcy filings since the financial crisis started, with almost 6000 bankruptcy petitions filed each day on average. This marks a 9 percent increase from th e month before, and a 38% increase year over year.  In all, 130,000 people filed for bankruptcy in March.

Some of the most common reasons that individuals file for bankruptcy include:

  1. Unemployment
  2. Foreclosure
  3. Divorce
  4. Disruptive Health Problems

As a result of last year’s weakened economy, and its repercussions (the unemployment rate is still rising, as are foreclosure numbers) the amount of people exposed to these situations has grown larger than in the past. (more…)

Hey Internet world! Today marks the launch of the Joshua Just Website and the Joshua Just blog!

I, Joshua Just, Diversified Investments CEO/Founder, will be blogging about the latest investment, finance, legal, and real estate developments and happenings. As an experienced leader with over 30 years in the marketplace, I can offer a trusted opinion on what’s happening in the business world which I will do in the “Joshua Just Judgement” section of the blog!

Read more about my history and experience here.

And I hope you’ll stay tuned!

Sincerely,

Josh

Joshua Just
Diversified Investments CEO/Founder