Earlier this year, Section 109(e) of the Bankruptcy Code was amended to increase the debt limits for individuals to file for protection under Chapter 13 Bankruptcy to $2,750,000 in total debt, and eliminated the distinction between secured and unsecured debt. Previously, the debt limits capped eligibility for Chapter 13 Bankruptcy at approximately $1,400.000 in secured debt and $425,000.00 in unsecured debt.
As a consequence of this change, business owners who may be burdened with substantial personal guarantees on business debt can now avail themselves of bankruptcy protection in Chapter 13 and avoid many of the administrative burdens ...
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NYC Taxi Bailout Plan May Provide a Bonus to the IRS
As an attorney who has had his finger on the pulse of the taxi industry since the crisis began in early 2016, I am compelled to comment when I think that an injustice is occurring
Although, on the surface, the NYC restructuring program with Marblegate/Depalma/Fieldpoint that formally rolled out on September 19, 2022 looks promising on the surface, an issue that had held the rollout back until now has not been adequately addressed - namely the tax consequence of the loan reduction.
Since this issue has not been adequately resolved, it has been buried in a general disclosure and disclaimer that most taxi owners may be missing since their ...
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Retirement Savings Down – Financial Stress Rises
Employees’ 401(k) accounts may have taken a hit during recent market volatility, but that’s not the only reason balances may be down.
A new study from Morgan Stanley finds 62% of employees have reduced their short- and long-term savings contributions amid high inflation and concerns about a possible recession.
Almost one-third of respondents reduced contributions to their 401(k) plans. Meanwhile, 26% said they’ve cut back on paying down debts, 25% reduced their long-term savings, 24% scaled back emergency and short-term savings, 19% whittled down contributions to health savings accounts and 13% reduced contributions to a college savings ...
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Car Prices Are Surging and Affordability is Decreasing
The purchaser of a new car financed an average of $40,290.00 during the second quarter of 2022, according to credit monitoring company Experian - an increase of 13.2% over the last year’s figure. The price of the average new car has also soared over the past year to $48,182.00 in July, 2022 compared with $42,736 in July 2021.
Overall, incomes have not kept pace with these increases, which have left many working longer than ever to pay off their new cars over ever-increasing terms. As of July, 2022, the average wage earner would need to work 42.2 weeks to pay off the average new car. In addition, the average borrower is now committing to ...
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What If I Do Not Qualify for Student Loan Forgiveness?
President Biden’s recent announcement proposes to forgive up to $20,000 for borrowers earning less than $125,000 a year.
For people who don't qualify for Biden's loan forgiveness program or may still have student loan balances left even after forgiveness, there are still options available to reduce student loan obligations. Please note that each of these programs have been available for some time and have stringent limitations. You should contact your servicer or https://studentaid.gov for more information.
Working for the Federal Government
People who work for the federal government could have a government agency repay their ...
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Buy Now Pay Later Could Lead to the Financial Downfall of a Generation
For the past 60 years, Americans have been impacted by the vicious cycle of credit cards. Now there is a new kid on the block.
"Buy Now, Pay Later" (“BNPL”) has taken the personal finance arena by storm. The number of Americans who have used the lending model, which is highly popular in Australia, has increased 300% every year since 2018, according to Bloomberg.
BNPL companies like Afterpay, Klarna and Affirm claim that the model is financially inclusive to people who can't access traditional forms of credit. Consumer Finance Advocates argue the model is under-regulated and poses risks to consumers. If this sector continues to grow, ...
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Three Suggestions to Move Forward After Bankruptcy
There is life after bankruptcy. Try these three suggestions to develop new financial habits:
First: Change how you talk about money
To truly know your “money self,” pay attention to what you say and hear about it on the job, at home, while out with friends. There is often a tendency to focus on the negative. Change your language if you want to change your money attitudes, which is the first step in improving money’s place in our lives.
Start by using positive language around money today. Begin saying “I choose not to” buy this item or “That is not a financial priority.” This demonstrates that you are making conscious choices. ...
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Biden Admin Reinstates Forgiveness of Student Loans Caused by Fraud
Tens of thousands of borrowers who attended for-profit schools like Corinthian Colleges and ITT Technical Institute that defrauded students will have their student loan debts eliminated after the Education Department rescinded some changes made during the Trump administration that gutted a relief program, the New York Times reported. “Borrowers deserve a simplified and fair path to relief when they have been harmed by their institution’s misconduct,” said Miguel Cardona, the education secretary. “We will grant them a fresh start from their debt.” The change will eliminate around $1 billion in student loan debt owed by around 72,000 borrowers, ...
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Mortgage Forbearances Will Be Ending Soon – Then What??
Mortgage forbearance won't last forever. Here's what to do if it's coming to a close.
Mortgage forbearance has been a lifeline for many borrowers during the coronavirus pandemic. Under normal circumstances, forbearance lets you pause your monthly mortgage payments for a period of time that's determined by your mortgage lender. But under the CARES Act, all borrowers are entitled to up to 15 months of forbearance.
If you put your mortgage into forbearance early on in the pandemic, then you may be required to start making payments on your loan again in the coming months. In addition, and more importantly, there is no guarantee that your ...
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Six Million FFELP Borrowers Left In Limbo
When the U.S. government bailed out student loan lenders during the Great Recession, legislators unintentionally set off a series of cascading events that has left more than 6 million student loan borrowers locked out of a crucial benefit more than 10 years later amid the coronavirus pandemic.
Two consumer advocacy groups are pressing the Biden administration to change that.
"The Trump administration exercised executive authority to cancel student loan interest charges and pause loan payments for over 40 million federal student loan borrowers," a joint letter from the Student Borrower Protection Center and the National Consumer Law ...
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