Payday advances can be an effective credit option for many people, providing the flexibility they need to weather short-term financial difficulties. Kristina Scott of the Alabama Policy Project mischaracterizes payday advances as “a broken product,” when, in fact, thousands of Alabamians choose payday advances over other options, such as bank overdraft fees, because they are often less expensive and the process is straightforward and transparent. (more…)
Contrary to whatever you may hear from Rep. Luis Gutierrez in Washington, the payday loan reforms on the books in Illinois do not adequately protect consumers. Regulations that were established when the General Assembly passed its major reform bill in 2005 defined a payday loan as one with a term of 120 days or less. Following the passage of this measure, lenders circumvented it by stretching their terms one day beyond that limit, which qualified them as purveyors of “consumer installment loans” under a 1963 law. A recent report from the Woodstock Institute found that these small-dollar installment loans — including subprime auto loans, retail installment loans, personal lines of credit, and check solicitation loans — face little oversight and no restrictions on interest rates. (more…)
A regulatory exclusion in a directors and officers liability insurance policy applies to an insurance regulator acting as liquidator, according to the Nebraska Supreme Court.
The ruling is believed to be the first by any state Supreme Court upholding a regulatory exclusion as applied to insurance regulators. (more…)
The Federal Housing Administration has a loan program, 203(k), that offers borrowers money to buy and repair a fixer-upper. The loan can be used for the purchase of the house and the cost of the repairs.
To be eligible, borrowers must plan to occupy the home; investors are not eligible.
Loans are available at fixed rates for 15 and 30 years.
Properties that are eligible are: single-family homes, condominiums, townhouses, mixed use buildings, and buildings with one to four units.
An FHA approved consultant will inspect the home and estimate the cost of your construction. The consultant also will assist you in determining the scope of repairs and budget the costs for the renovation job.
Detroit Public Schools expects to be millions of dollars short on payrolls through most of the remaining school year, documents obtained by the Free Press show.
he district’s shortfall is projected at $21.6 million on the March 17 pay date, $16.1 million on April 14, $17.4 million on May 12 and $21.3 million on June 9, according to reports the district files with the state under a consent agreement.
In addition, the district has at least $42 million in overdue bills as of Jan. 29 — double the arrears reported in November. The shortage includes $9.2 million in retirement payments to the Michigan Public School Employees Retirement System. (more…)
For a real life demonstration of how inadequate McCain’s health insurance plan is, even for well-off pharmaceutical company retirees, I offer the following from Bob Ehrlich who wrote in his eNewsletter for DTC Executives (find his entire article over at DTC Perspectives Blog):
“I am considered a Pfizer retiree. I worked there for about three days after their takeover of Warner-Lambert in 2000. I am covered for health insurance by the Pfizer retiree plan. When I received the retiree newsletter last week I was rather shocked to see that insurance costs will rise dramatically starting in 2009. Apparently Pfizer and many other corporations have capped their contributions which reached a peak in 2008. So all retirees are going to carry the up charges from now on.
“Pfizer says our costs will be $5216 in 2009, $8357 in 2010 and $11,808 in 2011. Sounds like a bubble to me. The company says these rates are still less than if we went out on our own to buy health insurance. I do not like paying these rates but I can afford it. What about the majority of their retirees who cannot afford such rising costs? I imagine there are millions of retirees who face this same dilemma from thousand of corporations.”
If McCain were elected president and was able to implement his $5,000 tax credit for buying health insurance in the “open” and de-regulated insurance market, Erhlich would immediately lose $216 and up to $6,1808 in 3 years. That’s considering just the cost of subsidized benefit. He would also be likely to pay taxes on the portion of the benefit paid by Pfizer.
What would Erhlich have to pay for health insurance if it were not subsidized by Pfizer? That is, what would he pay in the “open” market? If he is going to pay $11,808 for his share of a subsidized plan, I got to imagine the total bill for his plan is at least 2X that! Yikes! Could he afford that in an “open” market? What group would he be able to join that can offer a better deal than the thousands of Pfizer retirees?
Maybe this is why only 31% of Pharmaceutical employees who have taken my “McCain vs. Obama: Who’s Better for Pharma” survey say they will vote for McCain versus 54% who say they will vote for Obama.
When the GOP Congress passed and President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, supporters hailed the measure as a victory for “personalВ responsibility.”
Three years later, the bill has managed to dent the number of bankruptcies filed in America — from 1.6 million in 2004 to 850,912 in 2007, according to the nonpartisan American Bankruptcy Institute. That number is great for the banks, but in the wake of America’s subprime mortgage and home foreclosure wakeup call, you can’t argue that either American lenders or consumers are exhibiting more personalВ responsibility.
Forget high gas prices. If you’re among the 1 in 5 households with credit-card debt service payments exceeding 10 percent of your income, you probably have bigger problems. Congress refused to cap interest rates at 30 percent when it passed the bankruptcy bill. Predatory lenders remain free to charge usurious interest rates, as well as to assess whopping late-paymentВ penalties.
A report, “For a New Thrift: Confronting the Debt Culture,” released last month by the Institute for American Values, Public Agenda and other do-gooder groups, catalogs the many ways that private and public institutions are making it fast and easy for working people to do the wrong thing with their hard-earned dollars.
Financial institutions that previously encouraged Americans to save a portion of their income now encourage consumers to borrow for daily household expenses such as groceries. The credit-card industry pioneered a set of “practices and products that ensured long-term consumer dependency on expensive credit,” the reportВ noted.
The report’s lead author, Barbara Dafoe Whitehead, told me that when her group first started throwing out the term “thrift,” others saw them as “stingy unimaginative people who live dreary lives.” I hesitate, lest I come across as a middle-aged woman wagging a finger at young people for spending too much money — which often entails having loads ofВ fun.
So let me frame this as a class issue. People who are stuck in the credit-card trap — or worse, the payday lenders’ snare — face huge impediments to becoming middle class. It is shocking to learn that 56 percent of college students carry four or more credit cards. That’s a big problem, but at least these young adults are likely to see the day when their incomes can buy an end to a cycle of debt. The majority of workers, who are not college graduates, stand to lose the most if they get snared by the lure ofВ over-borrowing.
As Whitehead noted, once people enter the late-payment-penalty loop, they are “are reduced to falling down the ladder.” Washington should be encouraging working families to save. As Whitehead noted, there has to be “a saving culture” that encourages working-class families to put money aside for the future, or “you’re in trouble as a middle-classВ society.”
John McCain was one of 55 GOP senators, who along with 18 Democrats, voted for the bad bankruptcy bill. Barack Obama voted against the bill, but like McCain, Obama also voted against the amendment to cap credit interest at 30 percent. At a Wednesday roundtable on predatory lenders, Obama accused McCain of siding with the credit card-companies and faulted Washington’s coziness with the predatory lendingВ lobby.
Too bad for Obama that Wednesday was also the day Jim Johnson resigned from Obama’s vice presidential search committee — after the Wall Street Journal reported that Johnson received $7 million in below-market-rate loans from subprime giant Countrywide Financial Corp., through an informal program for “friends” of CEO Angelo R.В Mozilo.
American consumers could use some friends in Washington, too. Supporters justified the 2005 bankruptcy bill as a way to discourage bad-faith borrowers who rack up big debt without paying it back. OK, mission accomplished. Now, having helped the banks, Washington should do something about rapacious bad-faith lending before there is a cascade effect across the economy. With the proliferation of predatory credit-card companies, the subprime mortgage and payday lenders, Whitehead said of the recent spate of foreclosures, “We haven’t seen the end of thisВ yet.”
As times are getting harder in the UK with the cost of living steadily on the increase individuals are finding they are living from hand to mouth. This is not a great position to be in especially in the event of an emergency that requires some extra cash.В Knowing that your car is due for its MOT and that funny rattling sound under the hood has gotten louder you may be having kittens wondering how you are going to pay for its repairs.
Not having access to a vehicle is simply not an option as you rely on it for all your daily tasks, so where can you turn to for the extra money. Many more individuals have been looking in the direction of pay day loans to help ease the financial strain.
Pay day loans have increased in popularity possibly because traditional lenders are refusing to offer credit as they themselves simply don’t have access to them. The unfortunate part of the pay day loans is not only the incredibly high percentage you pay for the privilege of borrowing, usually in the region of 25% of the amount but also the fact that it is usually for an extremely short period; namely 30 days or until your next pay day, hence the name.
While it may appear to be the only feasible option it may in fact cripple you further if for whatever reason your pay is short or something else comes up.
The number of IRS audits increased in 2007. See my recent article “IRS Ramps Up Audits” to read more about what is causing this increase and who is targeted.
What can you do to be prepared?
#1 Build a defense for your rental real estate losses.
While the IRS has not specifically targeted returns that deduct rental real estate losses, if you are selected for audit, your rental real estate losses will be questioned. If you claimed real estate professional status, the IRS will ask you to prove that you qualify. If you claimed the $25,000 loss exception, you will be asked to prove that you meet the “active” threshold.
Here’s what you can do:
First, make sure you clearly understand the rules for taking your rental real estate losses. You can deduct rental real estate losses to reduce you taxes but the rules are very specific. Knowing these rules inside and out will increase your chances that your audit will result in no adjustments to your rental real estate losses.
Second, document your real estate activities. Proper documentation is the number one defense you have. The IRS wants to see not only the number of hours but also the activity you were doing and for which of your properties or businesses. Need help? I’m here to help you!
#2 Clean Up Your S Corporation
The number of S corporation audits jumped in 2007. The IRS is looking at specific items; here are a few of those items you need to be aware of:
- Your salary -
How much did you receive as salary and when did you receive it? As an owner, if your salary is too little, you could be in trouble. But from a tax planning standpoint, if your salary is too much you will be overpaying your taxes! There is a balancing point to master here.
The timing of when you receive your salary is important as well. Big lump sum payments made once or twice don’t look like salary and could be drawn into question.
- Your distributions -
How much did you receive as distributions and when did you receive them? Smaller distribution amounts that are paid more frequently than quarterly don’t look like distributions. These amounts will be scrutinized!
Here’s what you can do:
Your #1 defense is documentation. How did you come up with your salary amount and your distribution amount? How did you determine when you would pay your salary and when distributions would be made? Once you have this documented, you need to make sure what your S corporation is paying is reasonable. So, take another look at your salary and distributions and ask yourself if it makes sense for a business to pay these amounts.
Not sure what your S corporation should be doing? Then you are in the majority, that’s why the IRS is having a field day with these audits! I can help walk you through the exact steps you need to take to determine your salary amount, your distribution amount and how to document both so you are ready for an IRS audit.
#3 Support Your Expenses
There are certain expenses the IRS will always look at in an audit. These expenses are travel, meals and entertainment.
The #1 thing you can do is to make sure you can support these expenses. The IRS will want to see the who, what, when, where and why of each of these expenses. Who was there, what was the business purpose, when was it, where was it and why was this an ordinary or necessary expense for your business.
Not sure if your documentation will pass an IRS audit? I can help!
By now, you realize the key to surviving an audit without any adjustments is proper documentation. If you are among the many who do not document as you should, it’s not too late! Even if your documentation has not been ideal in the past, make a new start right now! Understand what you need to document and then on a daily, weekly or monthly basis, make sure your documentation for that day, week or monthly is in order. Once you have the hang of it, go back and start to document what you didn’t in the past. Remember, the IRS can audit a return 3 years after it has been filed (and 6 years if the tax return filed was considerably incorrect).
It can be quite nerve racking when the bill collectors are calling and sending demand notices, however you can handle it. There are ways you can protect
yourself and also ways to properly handle your debt collectors.
There is a bill meant to help individuals deal with aggressive debt collectors. The Fair Debt Collection Practices Act is a guideline that must be followed when a debt collector is attempting to collect payment on a debt. It is prohibited by law for a collector to call your home before 8 a.m. and after 9 p.m.. They are prohibited from disturbing you with calls after you have insisted they do so, neither can they threaten to seize your salary. For more information go to => www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#801.
If you have an answering machine, you can screen your phone calls before you answer them. Adding anonymous call blocking to your phone line can also help from receiving the unwanted collection calls. Well, at least from having to talk with the person on the other end. However, if you decide to answer the phone you can request that the collector no longer call you. Once you have stated to them that you don’t want any further phone calls, legally they have to stop the phone calls to you.
Before you take some of the more drastic measures, you should consider making arrangements with the company to pay off the debt. In many cases, the collector is authorized to reduce the amount owed in order to collect the money. Usually, if you make payment arrangements on the debt, the collection calls from that company will stop.
Do try to keep a record of calls that take place between the collectors and yourself. If you agree to any form of payment, it should be recorded on paper and it should bear both your name as well as the other party’s name. Try your best to keep the agreement you have made, if you are unable to keep it notify the company as soon as possible. If you have indicated that the collector cease calling you, you can record any further calls made to you by them. Be sure you alert them to the fact that the calls are being recorded. It is usually helpful in reducing the number of disturbing calls.
In most cases, you will be able to negotiate the amount of money you will be paying off. It is common for the agency to get a small cut of the amount they can successfully retrieve. Thus, for many debt collectors, they are willing to collect smaller amounts to offset their losses. Any amount of money is better than nothing.
If you agree to a smaller payment, be sure to request that there should be no further negative marks placed on your credit report. Also, be instant that they promptly report the payments made as well as adjusting the amount that is owed on your credit report.
When you have made the first payment, an agreement should be reached. The contract should reflect the amount owed as well as the specific terms of agreement. Keep your first payment to a minimum as far as possible. This will insure that they will keep their end of the agreement and hold true to the contract.