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Category: Bankruptcy

Holding Off On Bankruptcy For Now

I was able to talk with a Dave Ramsey counselor today. We discussed my income and the level of my debts and how fast they’re growing. I’ve been working the plan just as prescribed and I’m on the right track. I just need to keep working on getting my income up as much as I can, which I’m doing.

My counselor suggested paying $10 or so each month to the creditors I can’t make a real dent with right now and focusing what money I do have on the next debt in line in the snowball and get it paid off. That will put more money toward paying the debt, and less maintaining a relationship with the other debt collectors. Basically, I stop paying on a pro rata basis and start paying a flat rate. That will leave twice as much money to pay on the lowest debt than I had on the pro rata plan. That will make a big difference in making the money I have work harder for me.

I am making progress. I’ve paid off 6 debts. I’m just discouraged because I’m not making any headway on the back end of my snowball. I’ve got to keep plugging along and work toward getting a bigger shovel (more income, a lot more).

I’m going to try this over the summer and work on increasing my online income while I’m delivery pizzas and tutoring. We’ll see where I’m at in August.

If it gets too tough to handle or I’m not making progress, I can always file for bankruptcy at any time. I found my pre-bankruptcy counseling certificate and I have all my paperwork in order. All I have to do is take it to my attorney. I’m going to keep it ready to go and that is my fall-back position for now.

Need to Get Medical Insurance

This is one of the “inside your own 4 walls” issues I haven’t taken care of. Before I put more on the debt I need to get with the local health insurance ELP about what coverage I could at least get for myself. I need something to cover me if I get really sick and need to go to the hospital. As far as I know, if I needed a hospital stay I could go to the public hospital (Earl K. Long Hospital) and my costs would be waived for lack of ability to pay.

My son is on Medicaid, but I only use it when it’s something bigger than I can handle. I pay cash for his routine doctor visits or when he needs to see his pediatrician when he’s sick. Medicaid pays for his prescriptions because they are really expensive but vital to his survival. They would reimburse me for my expenses, but I don’t do that because I can manage my costs okay on my own so far.

I don’t want to stay in this position any longer than we have to, so I’m seeking reasonable coverage for both of us that won’t break us financially. It may require that I keep searching for a solution for awhile. I have been searching for 2 years now, but things are changing and more products are becoming available in a more competitive marketplace.

I am not sure what the future holds in store for me in such matters but I can guarantee that I won’t allow the International Debt Collection Agency to dictate terms on how to live my life because I have made it clear that I would work out a solution to ease things out even if I have to file for bankruptcy in the near future but one thing is for sure that I won’t bow down before the authorities to do their bidding to clear out on legal issues.

The only reason we don’t qualify for food stamps is I have an IRA. The state considers that a usable asset and won’t award food stamps to anyone who has any usable assets, no matter what the tax consequences or how that asset is viewed by any other law, like the bankruptcy law.

Days Before Bankruptcy Filing, Borders Pushed Customers to Pay for Annual Memberships

In the two months leading up to today’s bankruptcy filing by Borders Group Inc. (the company that runs Borders bookstores), I received numerous e-mails and in-store pitches asking me to pay $20 to join the “Borders Rewards Plus” membership program, with the most recent e-mail coming just six days ago. But the company had not know that it was on the brink of bankruptcy, and that the membership would be worthless if Borders were liquidated. If a person has pay the annual membership fees before bankruptcy, then what should be done. The hiring of the san diego bankruptcy lawyer will provide the solution to the clients. 

On February 9, 2011, I received an e-mail offer from “Borders Rewards,” pitching the following offer: “For just $20, upgrade to Borders Rewards Plus and get $10 in BONUS Borders Bucks redeemable 3/14/11 – 3/20/11.” The Borders Rewards Plus program apparently provides larger discounts on purchases at Borders bookstores. I assume that many people joined the program in response to the e-mail, although I did not.

Then, today (February 16, 2011), Borders Group Inc. filed bankruptcy. The company reportedly intends to shut down 30% of its stores. [See, e.g. Kary, Tiffany and Erik Larson. “Borders Files Bankruptcy After Years of Market Losses,” Bloomberg, 2/16/11. Downloaded from: http://www.bloomberg.com/news/2011-02-16/borders-book-chain-files-for-bankruptcy-protection-with-1-29-billion-debt.html].

If Borders Group Inc. continues to operate in bankruptcy and continues to honor the Borders Rewards Plus program, then the memberships will have value to those who purchased them (although that value will be diminished for those who currently shop at Borders stores that are about to be shut down).

But there is at least a chance that the Borders Group Inc. reorganization will fail, and that the Chapter 11 bankruptcy case will be converted to Chapter 7 where the company will cease operations and be liquidated (a liquidation could also occur in Chapter 11, but that apparently is not the debtor’s intent). In that case, the Borders Rewards Plus memberships would be worthless.

Why does all of this matter? Because Borders’ management, in a last-ditch effort to raise cash, might have sold Borders Rewards Plus memberships to unwitting customers even though management knew there was a decent chance that those memberships would have little or no value. My recollection is that the e-mail invitations to upgrade my membership increased markedly during the two months immediately before this bankruptcy filing.

At this stage in the bankruptcy case, I am sure Borders Group and its attorneys are focused on urgent matters (so-called “first-day motions”), such as approval of debtor-in-possession financing, obtaining court permission to use bank accounts, and approval of the retention of legal counsel and other professionals. Sometime down the road, though, I would like to see the Bankruptcy Court address Borders’ sales practices on the eve of its filing. A lot of Borders Rewards Plus customers are going to feel like suckers when they hear about Borders’ bankruptcy filing.

Knowing the Impact of Bankruptcy to the Middle Class

Even with the change in federal bankruptcy laws, there are an increasing number of middle class families who are struggling financially and, ultimately, will file bankruptcy at some point in their lives. If you’re one of them, choose the best bankruptcy lawyer in san diego to guide you through the legal process. With the middle class considered the most prominent group of individuals to file bankruptcy, many wonder how we even have a middle class in the United States.

Since the middle class is not clearly defined by the United States government, this leaves a somewhat gray area in which we can all classify ourselves as middle class, upper class or even working class. In general, however, most Americans agree that the middle class is generally defined as someone who has completed college level education, carries a well established occupation and has a regular stream of income on which they can develop some form of wealth for themselves.

In recent statistics, the individuals who commonly file bankruptcy tend to be women who are about middle age; with the average age of 38. While most are college educated, the issues that bring about bankruptcy, in this middle class sector of individuals, is directly tied to a medical issue, loss of employment or many years of surmounting debt.

Interesting enough, these same statistics do not reflect a great propensity of any one race or citizenship status to file bankruptcy, with all races and citizens represented equally when compared to the general population. This is to say, race will not affect your propensity for filing bankruptcy.

As stated, most bankruptcy filers are college educated but, even more astounding, is the fact that most filers carry even more college education than most.

So, what is it that makes the American middle class, then, file for bankruptcy? In examining the income levels of those who have filed, it is amazing at how these individuals, who once may have been a true representation of the middle class, have suddenly fell into a realm of almost certain poverty level. Still, they consider themselves middle class. In fact, by the time bankruptcy is filed, most wage earners will report income below $20,000 annually.

In terms of assets, those who have filed for bankruptcy will usually demonstrate no assets of value and, as a result, have nothing for liquidation to the creditors. Quite simply, the issues that resulted in the deterioration of income and wealth may have led to the sale of assets, as a way to maintain lifestyle, but, ultimately, leading to bankruptcy nonetheless.

So, in the United States to say that our middle class is filing bankruptcy more and more often is a somewhat true statement. While they were classified as middle class when the debts were incurred, the life events that occurred thereafter may have brought them into poverty or lower class, ultimately leading to bankruptcy. So, to say our middle class is filing bankruptcy mores than any other class of individuals is, in part, a true statement, depending on how you examine the facts associated with the bankruptcy filer.