Money Quotes – Saving Money

Most of the following quotes are not from our generation.  However, the messages are clear and still hold true today.  If you want to get ahead in today’s financial society, or even just stay afloat, read these quotes and think about them.

 

“A penny saved is a penny earned.” – Benjamin Franklin

 

If you have saved it then it is yours.  When you spend it you no longer have it.

 

“If you would be wealthy, think of saving as well as getting.” – Benjamin Franklin

 

What is Ben saying here?  Don’t we need to work very hard to make a lot of money so we can have a chance at becoming wealthy?  The point is, don’t spend everything you earn.  Limit your expenses.  Consider saving.  Do you really need a new car?  Do you really need another pair of shoes?  Do you need to stop at the fashionable coffee shop every morning?

 

If we can change our spending habits we could all have more money saved in the bank!

 

“Annual income twenty pounds, annual expenditure nineteen six, result happiness.  Annual income twenty pounds, annual expenditure twenty pound[s] ought and six, result misery.” – Charles Dickens

 

and

 

“The art of living easily as to money is to pitch your scale of living one degree below your means.” – Sir Henry Taylor

 

I know.  Who talks like that?  The point is to live within your means.  If you make $70,000 in a year and you have some left over, you should be happy; you saved some of what you made.  If, however, your expenses for the year were $75,000, you are in the negative $5,000, not pleasant.

 

Today this problem is compounded enormously because of the availability of credit.  I may only make $5,000 a month, but with three credit cards I could easily amass $15,000 or more in debt in the same month.  Yes, I could do this all by myself.  Now I am $10,000 in the hole for the month and interest will accumulate because I can’t pay this debt off.  Oh woe is me!

 

“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” – Will Smith

 

Where did that one come from?  Someone in the twenty first century said something that made sense.  Even better, the speaker is an actor.  Who would have thought???

 

Let’s take Mr. Smith’s statement a little further.  Too many people spend money they haven’t earned, to buy things they don’t want [or NEED], to impress people they don’t like [to create an image that is so important].

 

Please offer comments.  I had fun with this and plan to add more Money Quotes in the future.

 

J. Jeff Jackson

Ohio Bankruptcy Attorney

www.ohdebtcounsel.com

Ohio Bankruptcy Attorneys – Jones & Jackson, LLP

On May 1, 2009, Nicholas W. Jones and myself formed the law partnership Jones & Jackson, LLP.  Our office is located in the City of Delaware, Ohio.  We are consumer bankruptcy attorneys.  Our practice is primarily in the United States Bankruptcy Court, Southern District of Ohio.  We are centrally located to serve the counties of Delaware, Franklin, Union, Morrow, Logan, Knox, and Madison.

Our mission is to help our community face the uphill battle against foreclosures, job loss, and unmanageable credit card debt.  We have helped thousands of Ohio consumers file for bankruptcy protection and get a fresh start.  We are here to help our friends and neighbors in Central Ohio.

There are many alternative debt relief options available, such as debt consolidation loans, debt settlement plans, and debt reduction plans.  Unfortunately many of these options are not wise choices because they continue to put the debtor and his/her assets at risk.  When faced with such a debt crisis, it is important to seek as much information as possible before deciding upon the best approach.  A trusted financial advisor and attorney should also be consulted.  We strongly encourage you to contact bankruptcy attorney before you agree to employ an alternative debt relief program.

For more information about our firm and debt relief options, please visit our website at www.ohdebtcounsel.com.  

J. Jeffrey Jackson

Jones & Jackson, LLP

2 West Winter Street, Suite 306

Delaware, Ohio 43015-1965

Toll Free 1-888-431-0921

Phone 740-369-6812
Fax 740-369-1292

E-mail jjackson@ohdebtcounsel.com

 

 

Debt Consolidation Stories

April 2, 2009

While searching the internet on “Bankruptcy v. Debt Reduction Programs”, I found a site called Debt Consolidation Care ww.debtconsolidationcare.com.  There were a number of interesting posts under http://tinyurl.com/ctt7b9.  In reading these stories I am reminded of my client who had already started with a Debt Reduction Program.  Some of the stories echo the issues or problems I mention in my post Bankruptcy v. Debt Reduction Programs http://tinyurl.com/cpxnra.

One of the post has a family who has started a reduction/consolidation plan, has paid money, had some success, yet was left to fight the court battles on their own.  They had not completed the program and were now wondering about bankruptcy.  The problem here is bankruptcy should have been considered more heavily before they agreed to a debt consolidation or reduction plan.  They have expended hard earned money for the opportunity to fight their own legal battles.  There definately is a stigma and much misunderstanding associated with bankruptcy, but I believe it is the best weapon or shield most people have for finding debt relief.

Other posts on the site mention how they have talked to an attorney and Chapter 7 will not work because their income is too great so Chapter 13 is their option.  They don’t like Chapter 13 because they are under the assumption that they will have to pay “all” their debts.  This is not true.  The goal of Chapter 13 is to bring secured creditors current while paying unsecured creditors a percentage.  Yes you may have to give up, liquidate, some of your luxury or excess property in order to help pay some of your creditors.  If you read any of Liz Pulliam Weston’s books, you will see that she promotes this concept.  She mentions many times that one alternative to finding cash to help pay down debt is to “have a garage sale”.  Sell some of the property that you do not need, even boats and additional autos.  We have to take control of our finances.  Either do it yourself if you are not too far in debt, or seek help.  Bankruptcy may be your best option because it will be handled through the court system, your collection actions will cease, you will know how much you need to expend, and you can quickly begin rebuilding your credit. 

Best of Luck.

Jeff Jackson, Bankruptcy Attorney, Central Ohio

I provide Debt Relief. I help people file for relief under the Bankruptcy Code.

Bankruptcy v. Debt Reduction Programs

In a previous post I noted that a Debt Reduction Program I had reviewed for a client appeared to not be an avenue in which many peopled in a credit crisis should follow.  I received some comments inquiring how bankruptcy would be better.  With that in mind, I will try and convey more detail as well as include information from Liz Pulliam Weston’s book titled “Deal with Your Debt”.

Specific requirements of the Debt Reduction Plan:

• Not continuing to make any payments to your creditors;
• Making an application payment and then continued monthly payments to the Program;
• If you miss a payment to the Program you are done, no excuses and no hardships;
• Letting the Program negotiate with your creditors.

Problems with the Debt Reduction Program:

• Your creditors are not required to cooperate with the Program to negotiate or settle your debt;
• The Program would not be working to negotiate with your creditors for three to four months;
• Your creditors are not receiving any payments;
• The plan could take two to three years, maybe longer;
• Your creditors will start collection actions and possibly file suit in the court system against you;
• The Program will not assist you in court, you need to hire an attorney;
• Your Credit Report and Credit Score will suffer considerably because of the collection actions and lawsuits;
• You are still making monthly payments to the Program;
• After a couple of years, depending on how effective the Program is, your debts may be completely settled, who knows;
• You do not get any refunds from the Program.

Bankruptcy, on the other hand, freezes all collection actions including lawsuits and foreclosures.  You do not make payments to creditors until your bankruptcy petition is approved by the court.  You will need to pay your attorney and filing fees, but these fees tend to be fixed in amount, and are probably much less than what you will pay to a Debt Reduction Program.

Issues to consider:

• In either a Chapter 7 or a Chapter 13 bankruptcy case, your creditors will be forced to negotiate or settle;
• In a Chapter 7 bankruptcy, you may need to liquidate some of your assets to help pay creditors;
• You are allowed many exemptions, within certain limits, for personal property, real property, cars, tools of the trade (need to check your state’s exemption requirements)
• In a Chapter 7 you may reaffirm your mortgage and auto loans;
• Your Chapter 7 case may be discharged as within four to six months from the date of filing your petition;
• In a Chapter 13 case, a repayment plan is prepared and approved by the court;
• The plan term is generally between three to five years;
• You are still allowed exemptions;
• Your secured debt (home and auto) is typically priority and the goal is to bring those current within the plan period;
• Your unsecured debt (consumer debt) is paid off during the plan, but generally at a reduced amount;
• Your payments are typically made to the bankruptcy trustee, who then distributes plan payments to the creditors;
• Your creditors communicate with the trustee and your attorney (no more collection calls).
• Flexibility, a Chapter 13 can generally be converted into a Chapter 7 in the event of hardships (loss of employment or income stream).

With all that said, which is better?  Why Bankruptcy? I prefer bankruptcy because it is certain and has some flexibility.  You know how much your attorney and filing fees will be.  You will know within a few months of filing your petition, how much you have to pay to your creditors and what your monthly payment will be.  You have the comfort of knowing that the collection actions and harassing phone calls will be suspended during your plan, with enforcement coming from your attorney and the Federal Court system.

Which will hurt your credit score most?  That depends and cannot be handled with a blanket statement.  Time is probably the most critical factor.  The Debt Reduction Program I reviewed indicated that it may take two to three years to complete the plan.  During this time your creditors who are not being paid will continue to report late payment history and collection activity on your credit report.  Obtaining new credit, to help repair your credit score may be very difficult.

With Chapter 7, your debts may be discharged in four to six months.  You can then begin rebuilding your credit score.  During a Chapter 13 plan, which runs from three to five years, your creditors are being paid and they are not reporting new collection activity.  With respect to your credit score, the following exerpt from “Deal with Your Debt” by Liz Pulliam Weston probably sums it up best,

“What people find is that bankruptcy isn’t the credit-killer it used to be.  Although the bankruptcy remains on their credit reports for up to 10 years, the growth of credit scoring and the sub prime lending industry means that those who have declared bankruptcy can get credit cards before their cases have ever been closed, auto loans within a few months, and reasonably-priced mortgages within two years.  Those who handle their finances correctly after bankruptcy find that they can restore their credit scores to near-prime status within four years of their filings.”

In other words, you can begin rebuilding your credit score within a short time after filing bankruptcy.  Under the debt reduction programs, you can work on improving your credit score, but you have no control over the existing debts which will hinder your improvements.  Also consider the fact that it may take two to three years after you sign on with the program for your debts to be settled, and there is no guarantee that they will be settled.  In my opinion, if you opt for a debt reduction program, you will lose precious time to rebuild your credit score.

See also http://tinyurl.com/czlyrz.  This post reinforces the above text.

Jeff Jackson, Bankruptcy Attorney, Central Ohio

Jones & Jackson, LLP

Delaware, Ohio

www.ohdebtcounsel.com

I provide Debt Relief. I help people file for relief under the Bankruptcy Code.

Twitter

I am new to the whole social media craze taking place. I had started some of the items, like LinkedIn, but only recently joined Facebook and Twitter. It is addicting, however, I have been able to get my messages out, especially on LinkedIn, and had meaningful dialogue with a number of people. I even had a dialogue with an attorney in another country. It was great.

I have noticed that many talk show hosts are just now catching the social media train, especially twitter. Somehow I feel like I was one up on them.

Check them out if you are not using them. Keep it professional if that is your goal. Most importantly, be yourself.

Debt Reduction Programs

Times are tough and Money is tight. Our financial obligations weigh heavy on our minds. Thought I would pass this bit of information along.

Caveat: I have only looked at one program. My opinion does not mean there are not any good programs. Therefore if you have had a good experience, please let me and the world know.

I just had a consultation with a prospective client who is considering hiring a Debt Reduction Company. Based on reading the text, I am not sure this is a very wise move. In order for the plan to “work” the client stops paying their listed creditors and redirects monthly payments into the company account. The plan could take a couple of years. This is scary for a number of reasons: 1) You stopped making payments to your creditors, result they begin collection actions, including using the court system; 2) You are redirecting money into another account that you have NO control over; 3) the program does not protect you from lawsuits to collect on the debts; and 4) if you miss your monthly payment (hardships do not matter) or payments on a negotiated plan, you may be Kicked Out, with no recourse.

So you enroll for say $300 and make monthly contributions of $500.  After four months, you have not paid a creditor and you have contributed $2,300 to an account that is supposed to help you but you cannot control.  Many creditors file a law after missing three monthly payments.  So you are being sued and still contributing $500 a month to some plan, plus you need an attorney to help with the lawsuits.  After a year, you have invested $6,300 plus any expenses to fight lawsuits.  Does this sound like a good idea?

I do not believe I would ever recommend this to anyone. For $1500 to $3500 you can utilize Bankruptcy.

Jeff Jackson, Bankruptcy Attorney, Central Ohio

I provide Debt Relief. I help people file for relief under the Bankruptcy Code.

Easy Money

Just finished reading “Easy Money” by Liz Pulliam Weston. This is a great resource if you would like to get a better handle on your household finances and find way to save money. Just a few of the topics covered are: Take Charge of Your Spending; Get the Most Out of Your Credit Cards; Retirement Investing; Saving for College; Insurance; and Buying Homes and Cars.

The author does a fantastic job presenting useful information in a very readable manner.

I plan on reading “Deal with Your Debt” next.

Jeff Jackson, Bankruptcy Attorney, Central Ohio

I provide Debt Relief. I help people file for relief under the Bankruptcy Code.

Get Your Credit Report

You can obtain annually one free copy of your credit report from each of the three credit reporting bureaus.  Your credit score will cost you a small fee.

Contact Annual Credit Report Service at (877) 322-8228

or www.annualcreditreport.com

The three major credit reporting bureaus in the US are:

Equifax  www.equifax.com   (800) 685-1111

Experian  www.experian.com   (999) 397-3742

TransUnion   www.transunion.com   (800) 888-4213

 

In Canada:

Equifax  www.equifax.com   (Click the Canada Link on the page)  (800) 685-1111

TransUnion   www.tuc.ca

Northern Credit Bureaus, Inc.    www.creditbureau.ca

Goog Luck

Jeff Jackson, Bankruptcy Attorney, Central Ohio

I provide Debt Relief. I help people file for relief under the Bankruptcy Code.

Job Search

This is a message from Ken Lazar with the Scioto Ridge Networking Group.

“When I talk to you members at our chapter meetings, the conversation always ends up with some comment on how bad the news is.  It seems as though the TV and newspapers are all reporting the same blah..blah..blah.  Here is a great article that is a must need.  It puts it all into the proper perspective.

“To Find a Job, Ignore Doom-and-Gloom News, Experts Say” by John D. Sutter, CNN

 

If you’re unemployed, you know it’s a rough time to be on the job hunt.  There’s a huge pool of unemployed workers out there, and the unemployment rate continues to climb.  But if you want work, you need to block out the doom-and-gloom news about the economy, particularly this Friday’s federal jobs report, said John A. Challenger, Chief Executive Officer of Challenger, Gray & Christmas, a prestigious job-placement and consulting organization.

 

“Don’t listen to it,” he said. “It’s not relevant to any one person’s search.”  His advice: Go look for a job, any job — now.  “You have to get a fast start, and you have to stay at it in this kind of market, because there are more people searching for fewer jobs,” he said. “So you cannot let up.”

 

To get the jobs, applicants should be flexible, Challenger said.  “Be open to changing industries. Be open to moving for a job if you find one. Be open to a part-time job as an audition,” he said. These days, about 40 to 50 percent of successful job applicants have changed industries to get work, he said.

 

In such a competitive environment, Challenger said, it’s important for each job seeker to make his or her search unique.  “Always focus on your core skills. You are really defined by your function, not your industry,” he said.  It also may help to use a bit of common sense, he said.   Look to industries that you think everyone would need, even when their budgets have shrunk.

“There are some places that are OK in this economy: health care, education, government … core consumer products,” he said. “We’re going to all continue to go buy our Grape-Nuts and our coffee.”

I’m going to get a cup of coffee.  See you all this week.

 

 

Ken Lazar   

Your Credit Score

Just finished reading “Your Credit Score” by Liz Pulliam Weston.  This book has a tremendous amount of useful information and “how-to’s”.  It is very easy to read and very beneficial.  Even if you are not in financial difficulties it is a book worth reading.  The credit industry is tightening its requirements for lending.  You might have had a good credit score last year, but today that same score might not qualify you for the best rates.

Jeff Jackson, Bankruptcy Attorney, Central Ohio

I provide Debt Relief. I help people file for relief under the Bankruptcy Code.