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Personal Bankruptcies Rise Nearly 30% In A Year

October 3, 2008 – 5:06 pm

The American Bankruptcy Institute (ABI) has released its numbers for the month of September and the stress felt by U.S. residents continues as financial burdens force personal bankruptcy.

Compared to September 2007, September 2008 saw bankruptcies increase 29%. There were 88,663 consumer bankruptcy filings for the month.

ABI’s Director Samuel Gerdano said in a statement that in addition to the debt which many carry, the cost of gas and fuel, and the disintegration of the housing market has led many to choose bankruptcy.

In fact, if one takes a sampling across the U.S., the personal bankruptcy trends can be clearly seen. According to New West, Montana Chapter 7 bankruptcy filings increased from 664 to 1140 with particular increases seen in September.

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Foreclosure Rescue Loans from States

October 2, 2008 – 6:03 pm

Individual states are stepping up to provide distressed home mortgage holders some options other than foreclosure.

According to a Scripps News article on a recent Pew study, “Defaulting on the Dream: States Respond to America’s Foreclosure Crisis,” nine states have already begun offering home loan refinancing programs including Connecticut, Delaware, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio and Pennsylvania.

With over $450 million committed thus far, states hope that they can help homeowners who can’t afford their home or need temporary help until their normal funding situation is restored (such as a new job).

Factors involved in determining if assistance is necessary for mortgage holders include:

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Finding A Financial Planner You Trust

October 1, 2008 – 10:25 pm

Considering the current rocky condition of the economy, watching your finances appears to be even more important than usual.  U.S. News and World Report offers ideas on the best way to get someone to help you: a financial planner.

As the article points out, if you’re not careful in choosing a financial planner, it’s possible that they will invest your money in mutual funds, stocks, corporate bonds, derivatives or any of a plethora of financial investments that could lead your life savings and retirement plans into the abyss.

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Credit Terms Being Tightened Up By Lenders

September 20, 2008 – 3:03 pm

The recent mortgage crisis has had residual effects in many areas of the economy and that includes lending practices around credit cards and loans.

Financing companies are going so far as to offer certain debtors a bounty for closing their loan obligations according to Pittsburgh’s Tribune-Review:

“National City Corp., among the financial institutions hit hardest by the mortgage mess, has begun offering credit line holders $200 for closing accounts with no balance.”

According to Michael Mooney, chief lending officer at Fidelity Bank in the Pittsburgh area, banks are starting to revert to old lending rules they used prior to the easy money era of sub prime and look for such qualifying metrics as credit record, debt-to-income ratio and good income and collateral.

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Sub-Prime Crisis Have Your IRA Down? Move To Nicaragua

September 20, 2008 – 2:14 pm

With many 401K’s and IRA’s affected negatively by the recent sub-prime crisis and its affect on the stock market, imminent retirees may wonder what they can buy with what remains of their retirement nest egg.

A recent article in The Financial Times suggests that plenty of beautiful land is available in Nicaragua and there are already quite a few ex-patriates living in relative luxury on personal finances that support one-fifth the cost of a comparable set-up in the United States.

One of the people featured in the FT piece, Chris Renshaw, had originally planned to stay in Costa Rica but found it too crowded for his linking so he moved to nearby Nicaragua which was much cheaper and less developed.

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30-Year Mortgage Rates Plummet and Prompt Refinancing

September 20, 2008 – 1:46 pm

Freddie Mac’s weekly nationwide Primary Mortgage survey showed the fifth consecutive weekly decline in 30-year mortgage rates. Declining from 5.93 percent to 5.78 percent, this was the lowest level since February according an article in the South Florida Business Journal, and is leading many mortgage holder to re-financing.

Re-financing can be a good move for many considering that rates have increased for many and the new lower rates will make a difference in weekly, household budgets.

In fact, Wikipedia offers several reasons for refinancing:

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Credit Card Fees for Merchants, Too

September 18, 2008 – 4:27 pm

Consumers are well aware of credit card fees. But, merchants suffer, too.

According to a report by Nova Scotia’s Chronicle Herald, some merchants may be paying 2-3% of a total transaction to the credit card company now - but there’s more to come.

Small business owners worry that with new “premium” cards being offered by credit card companies will force them to pay nearly double the current fees. Mike Foran, a jewelry boutique owner, tells the Chronicle Herald, simply, “It’s a cash grab.”

The “premium” cards will offer incentives to consumer credit card holders for using their card, such as cash back, travel rewards and so on.

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Personal Bankruptcy Deception Costs Judge in New Orleans

September 18, 2008 – 4:06 pm

New Orleans federal judge G. Thomas Porteous may face impeachment hearings before Congress for accepting gifts from lawyers and for concealing debts related to his personal bankruptcy according to the Wall Street Journal Law Blog.

The judge’s lawyer contends that this is the most severe punishment ever handed out to someone residing on the federal bench and feels that it’s unwarranted. But, the facts may tell a different story.

In 2001 when the judge filed for personal bankruptcy, he allegedly incurred significant gambling debts under a fictitious name even though he had been specifically told by officials not to incur anymore debt while in bankruptcy proceedings according to a report by a Fifth Circuit investigative committee.

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