May 11, 2013
You may want to think twice before you post that picture sitting in your friend’s Ferrari, if you intend to file for bankruptcy. It is not unusual for trustee to view your posts on Facebook or other social networking sites.
Bankruptcy trustees are paid a commission based upon on the assets that they recover. In this age of technology trustees are becoming increasingly more sophisticated in their search for hidden assets. Do not be surprised if the photos you post on Facebook of your vacation or posing with your grandmother’s diamond ring come back to haunt you if you file for bankruptcy.
March 11, 2013
I have been asked this question by several new clients recently. So I guess it’s time to re-visit this topic.
When a person files for bankruptcy there are limits to what they can keep. Those limits are fairly generous and it is rare that a client will lose an asset they had hoped to keep.
In order to know which assets can be protected and which assets may exceed the limits, a person must list everything they own. It is highly unlikely (but not impossible) that someone will visit your house to view your property. If you conceal property or try to give it away so that they don’t have to list it, that could cause huge problems for the case and could even result in criminal prosecution.
If you have more assets than can be protected, good lawyers can often employ strategies to help you keep the items. So you are better off to be honest with your lawyer than to try to hide things.
January 2, 2013
In my recent post on Life Without Credit Cards, I discussed the advantages of using a debit card instead of relying on credit cards. If you choose to rely on a debit card, it is important to remember that all debit cards are not created equal.
Most banks issue debit cards to their account holders at no additional charge. However, some consumers are unable to open a traditional checking or savings account.
In this instance consumers may turn to the myriad of companies that offer prepaid debit cards. Some of these prepaid debit cards come with very high fees. Who wants to pay a fee just to confirm how much money you have? If you are considering a prepaid debit card, this is certainly a case of buyer beware.
Before choosing a prepaid debit card, it is critical to read the cardholder agreement. The cardholder agreement outlines the fees the company can charge.
Of the prepaid debit cards currently on the market, my favorite is the Bluebird Card offered by American Express. It is one of the few cards that does not charge a monthly service fee. There are other benefits such as Purchase Protection and Roadside Assistance.
For reviews and a comparison of popular prepaid debit cards, visit 2013 Best Prepaid Debit Cards Comparisons and Reviews.
December 18, 2012
Potential bankruptcy clients often insist that a credit card is necessary to survive in today’s society. In 2007 I closed my only credit card account, just to see if one could really survive without a credit card. What I discovered is that it is very possible, however sometimes it requires some advanced planning.
Relying on a debit card for travel is where I found the greatest challenge. There are several car rental companies that insist on the use of a major credit card to rent a car, however there are many who do not.
I recently traveled to Los Angeles to attend a conference. I rented a car through Hertz and they had no problem accepting my debit card. I have had the same success with Thrifty, Budget and Enterprise. It is important to remember that they will put a deposit on the card, which reduces the available cash until several days after the car is returned.
Debit cards come with a daily limit, regardless of how much money is in the account. It is important to make sure that the deposit charged by the car rental company doesn’t impact your ability to check into a hotel the same day. The way I have managed this is to pay for the hotel in advance through sites like Expedia or Travelocity. Hotwire is the only site I found which will allow the payment of the car rental (not the deposit) in advance of travel.
There have been times when I needed to purchase something which exceeded my daily limit. That involves a phone call to the bank to let them know how much I needed to charge. I have never been turned down for a temporary increase for a specific purchase.
Since I began relying on my debit card for holiday shopping, my holiday spending sharply decreased. Credit spends far too easily. It hurts to spend cash.
October 13, 2012
Despite dire financial circumstances, some people have a very difficult time letting go of the false sense of security that having a credit card provides. Clients often ask me if it is possible to keep just one card.
The answer is, probably not. Generally credit card issuers subscribe to electronic notification services that alert them when a cardholder has filed for bankruptcy. Whether or not you owe a balance on the card, chances are that the credit card company will shut off access to the account, regardless of your desire to maintain a relationship with that company. This can happen without any notice to you.
You don’t want to find yourself at the gas pump with an empty tank of gas and no cash in your wallet, only to realize that the gas card can no longer be used.
I have even had clients use the last of their savings (without telling me) to pay off a credit card in hopes of being able to continue to use the card after bankruptcy. These people are often very disappointed to learn that their account has been closed anyway.
Most people will begin to receive credit card offers within weeks of receiving their bankruptcy discharge. What most people don’t realize is that credit card companies are very anxious to lure bankrupt debtors back into the world of high-cost credit.
While having one credit card can be beneficial to rebuilding credit, having a savings account to rely on for emergencies is a far better road to take. If you cannot afford to save, you cannot afford the high fees these credit card companies will charge.