WSJ.com: Bankruptcy Filings Leapt 9% Last Year

By SARA MURRAY

WSJ.com

The number of Americans filing for personal bankruptcy topped 1.5 million last year, as high long-term jobless rates and depressed home prices drove more households to seek court protection.

Personal bankruptcies rose to 1.53 million, up 9% from 2009, the highest level since a revamp of the law took effect in 2005, according to the American Bankruptcy Institute, an association of attorneys and other bankruptcy professionals, and the National Bankruptcy Research Center.
A handful of Southwestern states accounted for much of the uptick in filings by households buckling under debt. "There are two groups of people who have had really high filings during the [financial] crisis—the Pacific Southwest and the Southeast," said Ronald Mann, a Columbia University law professor.

Conditions have improved in the Southeast, with filings dropping last year in Tennessee, South Carolina and Alabama. But the Southwest continues to struggle. In California, bankruptcies were up 25% from a year earlier. In Arizona, they rose nearly 24%.

To continue reading, follow link below:
http://online.wsj.com/article/SB10001424052748704111504576060181631140482.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Credit Repair: Things You Need to Know

By Jamal C. Wright, Esq.

In my field of Bankruptcy, I get more inquiries about how to improve credit reports than any other legal issue. More often than not, I get approached when the issue becomes critical. The debtor has come to a point in their life where they wish to purchase a house, a car or an education. But if you know what I know about credit reporting agencies (CRA’s) and their practices, then you wouldn’t approach me at all. In fact, I don’t want you to approach me about cleaning your credit report. No lawyer does. We will get to why in a moment. Here’s my chance to tell you a little bit about what I know. Let’s break it down to 3 basic points:

• (1) Tiiiiime… aint on my side, no it’s not!
  

There is no quick fix to your credit report. People ask me all the time if I could do something, immediately, to bring their FICO scores up twenty points. Nope. Your Fico score is concocted from a secret algorithm that only the people at Fair-Isaac Corporation know. Their secret is as protected as the ingredients to Coca Cola. However, it is public knowledge that this score is derived from the credit history told about you, by the “big 3” credit reporting agencies. So to change your score, you must change history, so to speak. This takes time. People should give themselves 3-9 months after they have begun work on their reports to look for a significant change in their FICO score.

• (2) One web site: AnnualCreditReport.com

Not FreeCreditReport.com. This site is credit report improvement central. This site is one that the three CRA’s are forced to maintain by federal law. It’s the only site you should waste time on, despite the lack of a catchy jingle. In the site’s own words, they admit:

“AnnualCreditReport.com provides consumers with the secure means to request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies in accordance with the Fair and Accurate Credit Transactions Act (FACT Act).”

They also give you a free report whenever you have been turned down for credit or a job, etc… I always say that nobody should EVER have to pay for a credit report.

What CRA’s do not admit so readily, is that the same federal law requires them to be 100% correct in everything they report. This means if they say you owe someone $100 and you really owe $101, they MUST investigate and MUST either correct it or erase it within 30 days of becoming aware of the inaccuracy, or else. It’s very hard to maintain 100% correct trade lines, since what you actually owe a creditor, can change from moment to moment. That’s the rub and it works in your favor, because frequently we find that CRA’s just erase the trade line, hence the saying, “clean one’s credit.” Who will bring the inaccuracies to their attention? You. Your attorney could do it, but the credit lobby in Congress made it so that when attorneys get involved in the process the CRA’s actually have MORE than thirty days to investigate. How do you bring it to their attention? You dispute them.

• (3) The CRA Dispute
  

When you go to AnnualCreditReport.com, you will be getting the most recent version of your report from the “Big 3.” You will also be able to start your dispute process. The reports will contain a confirmation number. This number will allow you back into the system for the next 30 days on the individual CRA websites, to dispute trade lines. The hardest thing about starting this process is finding the actual “dispute” page on each of the three CRA sites. They aren’t exactly in plain view.

After reviewing your reports and identifying the most “questionable” trade lines, go online and dispute them by clicking a few buttons. The process is amazingly simple for you. Not exactly the same for them. The CRA will take your dispute, go back to the original creditor and ask them to prove their claim. If the creditor can’t dig paper proof of the exact claim within thirty days (and unless they are Bank of America, they rarely can), the tradeline MUST be erased, or “cleaned.” As for your other negative tradelines, wash, rinse, repeat. There are twists and turns, but if you are consistent, you can wipe virtually all “inaccuracies” off of your report, thus enhancing your FICO score.

Legal Disclaimer: This site provides information about the law designed to keep readers informed of pertinent legal matters affecting the African-American community. But legal information is not the same as legal advice -- the application of law to an individual's specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer in your specific location if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.

Dr. Wilmer Leon’s Quick Remarks on the Possible Sale of Ebony Magazine

 

In this challenging time for print media, the historic jewel of African American periodicals, Ebony (like so many of our ancestors) is on the auction block. What was once a staple in so many African American homes is now struggling for its survival as many question its relevance.

During segregation Ebony and Jet magazines were key sources of information for the African American community about the community. With integration, too many of us left our communities, churches, and culture behind in order to assimilate into the dominant culture. With that, for too many, Ebony no longer reflects the community they live in; aspire to live in or a lifestyle that they see as relevant.

I have always felt that Ebony needed to incorporate more relevant political/economic/business information, analysis, and content to appeal to the growing African American middle and upper class. Life style and entertainment is great but that needs to be supplemented with the relevant information to maintain that life style. It's a difficult mix to maintain but necessary.

Selling Ebony/Jet does not mean that those magazines will cease to exist but with ownership comes control. The sale of Ebony/Jet goes back to the question of who will be left to define and interpret the issues that are relevant to the African American community and who will control its imagery. I don't know that Viacom has that mission or interest.

John H. Johnson said that Ebony was founded to "project all dimensions of the Black personality in a world saturated with stereotypes. We wanted to give Blacks a new sense of somebodiness, a new sense of self-respect. We wanted to tell them who they were and what they could do. We believed then--and we believe now--that Blacks needed positive images to fulfill their potentialities." The world continues to be saturated with those stereotypes and the community still needs positive images in order to fulfill its potential.

Dr. Wilmer Leon is the host of the Sirius/XM Satellite Show “On with Leon.”  To contact Dr. Leon for media requests or speaking engagements, please click here.

A BANKRUPT AMERICA

By: Leland C. Abraham, Esq.

While many politicians and talk show hosts debate whether America is in a “recession,” one thing is for certain, more people are filing for bankruptcy now than ever. The growing hysteria generated from the subprime mortgage crisis where companies like Bear Stearns, IndyMac, Freddie Mac and Fannie Mae are being bailed out or regulated by the federal government is of daily discussion by news media.

Growing unemployment and increased gas prices have taken a toll on individuals and corporations as well. However, individuals and corporations do have legal options to deal with their worsening financial situation related to their inability to pay their mortgage payment or looming credit card debt. Bankruptcy is a method that allows individuals or corporations to satisfy debts when they do not have the financial resources to cure claims with creditors. This article is intended to give you an overview of Bankruptcy as well as the pros and cons of it if you choose to pursue this legal option.

Bankruptcy is a legal process through which people and businesses can obtain a fresh financial start when they are in such financial difficulty that they can not repay their debts as agreed. Bankruptcy is created by federal statute; hence, jurisdiction for bankruptcy is under the federal courts.

There are four (4) different forms of bankruptcy applicable to consumers or individuals. Chapter 11 bankruptcy is a form of bankruptcy given to corporate entities for restructuring their business. When businesses become insolvent, corporations will file Chapter 11 bankruptcy to satisfy debts with creditors while still continuing to exist as a corporate entity after the filing of bankruptcy. For example, Michael Vick and his associated legitimate business ventures filed for Chapter 11 bankruptcy protection recently.

Chapter 12 bankruptcy is used for agricultural purposes. This form of bankruptcy is used for farmers and fishermen. If there is a supply quota that the farmer or fisherman must meet and circumstances arise where he or she is not able to meet the quota for a specified amount of periods, he or she may file for Chapter 12 bankruptcy protection to satisfy those creditors whom they are not able to provide supply for.

Chapter 13 bankruptcy allows individual consumers to make monthly payments to save possession and ownership of real or personal property. Like Chapter 11 bankruptcy, Chapter 13 bankruptcy is a form of debt reorganization. People file for Chapter 13 bankruptcy when they either have a single asset with a lot of equity or a number of small assets that yield a high net value. Usually, individuals will file for Chapter 13 bankruptcy if they would like to save their home from foreclosure. The person would use Chapter 13 bankruptcy to reorganize their debts and the person would make a monthly payment plan to pay off the debt of the bankruptcy estate in three (3) to five (5) years. For example, if an individual had $50,000 worth of debt and an average interest rate of 50%, the bankruptcy would reorganize that person’s debt to where the person may owe $44,000 and have an interest rate of 40%. That person would be expected to pay off the new balance of the debt through a monthly plan payment for either a three (3) or five (5) year period.

Chapter 7 bankruptcy is the most common bankruptcy for individuals or corporations. This form of bankruptcy is for individuals or corporations who have accumulated so much debt that debt counseling or debt management is really not an option for them. The Chapter 7 bankruptcy serves as a debt liquidation in which all of the applicant’s debts are discharged and the applicant is given a “fresh start.” If a corporation files for Chapter 7 bankruptcy, they will no longer exist as an entity.

There are several qualifications for the Chapter 7 bankruptcy. One such qualification is the median income qualifications. All individuals who wish to file for Chapter 7 bankruptcy have to fall within an income range. This income range will vary by state, but it usually is around $37,000 for a household of one. There are incremental increases to this income qualification the more people are in the household.

Another qualification to the Chapter 7 bankruptcy is the residency requirement. Generally, an applicant for Chapter 7 bankruptcy must live in the state in which he or she files for at least six (6) months. Although this is the residency requirement to file for Chapter 7 bankruptcy, there is a separate residency requirement in order to qualify for the state’s exemption laws. An exemption allows a debtor to protect an asset from being included in the bankruptcy estate to be distributed by the Chapter 7 trustee to creditors.

Advantages and Disadvantages

There are advantages to filing for bankruptcy. First, debtors can obtain a financial fresh start after they receive a discharge. For example, a debtor who files a Chapter 7 bankruptcy will be able to be discharged from paying most credit card debts. Second, creditor’s collection efforts will stop as soon as an individual or corporate debtor files for bankruptcy protection under a Chapter 7 or Chapter 13. This is known as the automatic stay. If a creditor continues to try to collect on a debt after receiving notice of a bankruptcy filing by a debtor, the creditor may be cited for contempt of court and/or ordered to pay damages. Also, you cannot be fired from your job solely because you filed for bankruptcy. Furthermore, you can freeze your FICO credit score by filing for bankruptcy.

However, there are disadvantages to filing for bankruptcy. Bankruptcy filing will remain on your credit record for up to ten (10) years. This record may affect future finance opportunities. So, it would behoove any potential applicant to not obtain any new credit cards or high interest loans after filing for bankruptcy for some time. But, research has given mixed results to the time when people or corporations can obtain new finance opportunities even after filing for bankruptcy.

Alternatives to Bankruptcy Filing

Another option that an individual or corporation might pursue is to directly contact the creditor and see if they are wiling to allow a lower monthly payment or extend the time to remit payment to lower the payments. Also, you can consolidate your debts by taking out a big loan to pay off all smaller amounts of debts that you owe.

If interested in filing for bankruptcy, please consult your local bankruptcy attorney in your area. We have provided a link to the National Association of Consumer Bankruptcy Attorneys for you to consult on this webpage as well.

Legal Disclaimer: This site provides information about the law designed to keep readers informed of pertinent legal matters affecting the African-American community. But legal information is not the same as legal advice -- the application of law to an individual's specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer in your specific location if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.