The reinstatement is the latest in a long and winding series of events and fall from grace for the former Atlanta Falcons who was so popular his image graced the cover of video games.

Vick recently finished serving a 23-month prison sentence for charges related to the illegal dog-fighting operation he ran out of his house. Shortly after the charges were announced he was suspended indefinitely from the NFL by Goodell.

The reinstatment could have huge implications on Vick’s bankruptcy plan. Vick filed bankruptcy on more than $20 million in debt. He lists $16 million in assets, but is trying to keep many of his assets.

In April, a judge rejected Vick’s Chapter 11 bankruptcy. A chapter 11 is rare for individuals, but Vick’s case is somewhat unique do to the size of his estate and debts, and his desire to retain property.

But the plan involved a $1 million payment to his creditors upfront, and that was cash Vick didn’t have. He tried to auction off one of his homes, but no bids were made on the $3.2 million residence.

A new bankruptcy plan is built around his ability to once again earn big bucks in professional. Before his arrest, Vick was in the middle of a 10-year, $130 million contract.

But it’s unlikely he’ll be able to command those dollars again. Several teams, including his former team the Atlanta Falcons, have already said they aren’t interested in signing the quarterback.

But there’s still a good chance that one of NFL’s 32 teams will take a chance on the former star, even though he hasn’t played since the 2006 season.

This translates into a larger billfold of debt, which often times can’t be cradled and results in bankruptcy.

According to the Boston-based National Consumer Law Center, nearly 33% of all personal bankruptcy participants were found to have far less than the recommended level of personal savings.

In fact, their debt to savings ratio was so lopsided that all 33% were nearly three times inflated in their debt. Meaning, when they filed bankruptcy, they had three times as much debt as they did asset or liquidity.

Although this may seem a bit brash, it’s not uncommon to the rest of the national consumer base.

No one we interviewed on the panel was surprised to hear that consumer debt is consistent with bankruptcy filings, according to research by the Federal Reserve.

Furthermore, the same research indicates that household debt is at a record high relative to disposable income.

It’s the panel’s concern that we’re at an unprecedented level of debt and it will most certainly cause serious risk to the long-term financial health of American households.

Moreover, the panel agrees with the same Federal Reserve research that tells that a high level of indebtedness among households could lead to increased household delinquencies and bankruptcies.

We asked the panel their thoughts on this and first to respond to our inquiry into the lack of savings by nearly all bankruptcy participants was our famed expert Marty Sumichrast, of the Sumichrast Report:

“I am deeply troubled by the enormous government and personal debt levels.

“There is simply no way that we can ring up a $20 trillion debt over the next 10 years and expect that we will be able to sustain our economic leadership in the world (or financial dominance in personal wealth either).”

From this honest and somewhat eye-opening response, another financial guru, Barry Ritholtz, concurred.

Ritholtz, who has spoken on such matters on CNN, CNBC, Bloomberg, PBS and Fox networks, asserts that the nation was in a “free fall recession from September through March, this free fall is over but we are still contracting.”

However, even though we as a nation are still in an economic constraint, Ritholtz urges that does not mean there shouldn’t be unprecedented levels of personal savings.

He feels that it will only be in saving that our nation will recover.

As in other facets of life, in any storm there is birth.

It is the job now of all who can, to give birth to a new zeitgeist of fiscal well being.

Everyone on the panel agrees that being frugal is now the chic way of life. “It is now cool to be frugal.”

Capitalizing on the new style of saving more and spending less is Meg Beach.

While Ms. Beach holds a Masters Degree from the University of Massachusetts in Neuroscience, she actually finds herself spending the majority of her time working from her blog Being Resourceful.

This innovative blog was designed by Beach to recommend the inside scoop on all things savvy.

Beach offers daily discounts, savings and special offers by top retailers that otherwise would be lost in the vastness of the Internet.

This format is becoming increasingly popular as more and more consumers around the country are searching for avenues of saving.

Ms. Beach excitedly remarks on the new style of save large and spend small:

“My audience for Being Resourceful is anyone who wants to pinch pennies without sacrificing the splurge! Through regular visits to the site, readers will find amazing deals on the basics like food and clothing, and also on the more fun things like entertainment, accessories and even home improvement, sporting events and gifts.

“I post links to printable coupons, offer discount codes for online purchases, and give a head’s up for great sales. On top of killer discounts, for someone who might be facing bankruptcy, Being Resourceful offers great ways to cut expenses in half through buy-one-get-one-free (“BOGO”) coupons.

“Life doesn’t end when someone faces bankruptcy; they just need to have a paradigm shift, and these deals can help sweeten the deal!”

Those interviewed made it clear that to not only to recover from, but also to avoid filing bankruptcy, it is imperative to maintain a savings that is intertwined within a personal budget.

Here’s a boiled-down look at the latest figures:

• Consumer prices up .7 percent: This jump in inflation is the largest since last July, and just over the .6 percent that most economists were predicting. Experts are apparently attributing the jump to increased gasoline prices.

• Industrial production down .4 percent: In response to decreased demand for a variety of consumer goods, many manufacturers cut back on production in June. Goods in this category include cars, machines and household appliances. The good news: in May, production fell by 1.4 percent – some experts see June’s lower drop as a sign of the recession’s easing.

• 2009 prices down 1.4 percent from 2008: Though month-to-month to prices rose in June, prices are still lower than they were this time last year. Interestingly, this is the biggest year-to-year drop in about 60 years.

• Energy prices up 7.4 percent: This jump was affected partly by the 17.3 percent leap upward gasoline prices took last month, as the summer travel season began. Analysts are reportedly predicting, though, that prices should ease a bit as the summer continues – this month has already seen some decline.

• Car and clothes prices up .7 percent, airfare down .6 percent: Reflecting various trends in consumer demands, some month-to-month changes cancel each other out in the final tally of price changes.

Though economists predicted a slightly lower rise of .1 percent in core inflation (which does not take into account food or energy), the .2 percent rise is considered reasonable by most standards.

Since last year, inflation has risen 1.7 percent, a number that jibes with downward pressure on prices typical of a recession.

The Labor Department’s numbers for last month show a current unemployment rate of 9.5 percent, up only slightly from May (9.4 percent).

This number translates to about 14.7 million Americans currently out of work.

If you’ve suffered a job loss and are considereing filing bankruptcy, check out www.TotalBankruptcy.com for bankruptcy information and lawyers.

Check out these MLB players who turned to filing bankruptcy when their money troubles caught up to them:

1. Lenny Dykstra, former star center-fielder for the New York Mets and Philadelphia Phillies, filed for Chapter 11 bankruptcy protection this month. He has no more than $50,000 of assets and between $10 million and $50 million of liabilities.
2. Bill Buckner, a former Red Sox player, went bankrupt in 2008 after his post-athletic career car dealership failed.
3. Baseball Hall of Famer Gaylord Perry went bankrupt in 1987 after filing for Chapter 7 bankruptcy. Having played for an astounding eight different MLB teams over the course of his 35-year career, Perry’s post-MLB career farming endeavors failed in the mid-eighties.
4. Pitcher and predicted Hall of Fame nominee Tony Gwynn filed bankruptcy in his sixth season in the league, citing back taxes of slightly over $1 million and poor investments, which he blamed mainly on his agent.
5. Rollie Fingers, a Hall of Fame pitcher inducted in 1992, filed bankruptcy in 1989 after investments in pistachio farms, Arabian horses and wind turbines went awry. It’s said he owed more than $4 million and his assets were listed as less than $50,000. He was also involved in a tax scandal in 2007.

Suite Solutions is offering $30,000 in college scholarships to the children of parents who filed for bankruptcy in California.

That’s some serious cash for higher ed for some families that could seriously use it. Suite Solutions is focusing on California, a state that has had more than its share of financial struggle.

Three finalists will receive $5,000 each and 15 more students will get $1,000.

Qualifications for the bankruptcy are:

• Child whose parents filed for bankruptcy in California
• Southern California resident.
• High school senior graduating in the spring of 2009 or current undergraduate college student enrolled for the upcoming fall semester at a two-year or four-year accredited college.
• Student who demonstrates participation in his/her school or community through academic achievement, participation in extracurricular activities and/or community service.

If you meet the above, you can apply by visiting [www.suitesolutions.info].

This is a great opportunity for some folks that could use a little help, and just another reminder that, for many people, bankruptcy isn’t the end. It’s a fresh start.

Get more information on life after bankruptcy.

In advertisements, Stein shills for the group which claim to offer you a free credit score. As several blogs point out:

1. Your credit score doesn’t tell the full story. While your credit score is important, you’ll need more information if you want to take action to improve. In order to see what’s bringing your credit score down, you’ll need to see your credit report, which includes any claims against you.
2. FreeScore.com isn’t actually free. After giving you a “score” for free, they begin charging you monthly fees.

While some people may want to check their credit score monthly, in most cases you don’t need this kind of scrutiny. In fact, simply requesting your credit score or credit report can affect your credit score.

You are entitled to a free annual credit report from the government. And the government makes one available at exactly one - and only one! - Web site: Annualcreditreport.com. Don’t be fooled by similar or imitator sites.

If you’re in debt and trying to get out, you may become a target of predatory merchants. These groups are looking to make a quick buck off your troubles.

Avoid this by informing yourself, reading the fine print and sticking to reputable, trustworthy sites and sources.

In advertisements, Stein shills for the group which claim to offer you a free credit score. As several blogs point out:

1. Your credit score isn’t helpful, although your credit report can be.
2. FreeScore.com isn’t actually free. After giving you a “score” for free, they begin charging you monthly fees.

This is what’s known by some as a “predatory bait-and-switch.” In other words: Stay away from this site!

You are entitled to a free annual credit report from the government. And the government makes one  available at exactly one - and only one! - Web site: Annualcreditreport.com. Don’t be fooled by similar or imitator sites.

If you’re in debt and trying to get out, you may become a target of predatory merchants. These groups are looking to make a quick buck off your troubles.

Avoid this by informing yourself, reading the fine print and sticking to reputable, trustworthy sites and sources.

With that income gone, the Herrons began falling behind on payments. Their cars were repossessed, and husband Thomas was forced to walk several miles to get to his job.

Now, the couple is facing foreclosure, and they’ve turned to their pet boa constrictor to help raise money. While holding a garage sale to raise cash, they set up an impromptu photo studio with their snake. For $5, visitors could takea picture with the pet and leave with a printed copy.

This couple is certainly sharp and creative, but the story is also sad. You shouldn’t have to sell all of your possessions just to protect your home. Had the Herrons considered bankruptcy, they might have been able to keep their cards, home, belongings and snake.

Bankruptcy is designed to help just like the Herrons. A good couple that, due to circumstances out of their control, fell on hard times. With the unemployment rate in Tennessee above 10 percent, many more couples may soon find themselves in financial dire straits.

Just remember: You have options. You don’t have to lose it all. Filing bankruptcy can help you control your debt, and stay in your home.

With home foreclosures in Los Angeles still on the rise this year, the Los Angeles Times provides five first-hand accounts from people facing foreclosure.

It’s a simple, captivating and heartbreaking read. Each of the five people profiled offers a distinctively different tale, but they’ve all faced the same stress: How do we stay in our home?

In reading their stories, I think there are several lessons that we can take away, particularly if you’re facing foreclosure or other financial struggles.

1. You can’t take action soon enough. Many of the people in the article waited until it was too late to take action. Time is not on your side if you are facing foreclosure. Don’t wait until you receive an eviction notice. If you are getting behind on your payments, then take steps today to improve your situation. The sooner you start, the more options you may have. If you lose your job and notify your bank right away, they may be more willing to work with you. Then again …
2. The banks are not on your side. Several of the people in the story mentioned how unwilling their banks were to work with them. Often the banks wouldn’t even respond to requests for help. One bank wouldn’t lower a man’s $500,000 mortgage, but sold his house for a fraction of that! Also, several couples went to the bank seeking help only to have more loans pushed on them with higher interest rates and higher monthly payments.
3. Know your rights. Some of the people turned to bankruptcy for help, only to report having banks turn up on their doorsteps with foreclosure notices. If you file bankruptcy, all foreclosure efforts must stop until your case is resolved. If you file, and a bank shows up on your doorstep, report this to your lawyer immediately. The bank is in violation of the law in these cases.
4. Even the prepared can struggle. The people profiled had money in savings and retirement accounts. They owned their business and were often responsible. But still, they faced hardship. Even the best prepared can struggle. Don’t let your pride keep you from seeking assistance.
5. You need long-term help. When hard times hit - like a job loss or injury - it’s difficult to say how long the trouble will last. Will you find work soon? Will things recover quickly? You never know. But many people get in trouble by trying short-term fixes that only complicate their problems. If you find yourself slipping into serious debt, you should look into real, lasting solutions right away.
6. Help is available. Most of all, don’t give up hope. You have options. The people in this story turned to free legal aid organizations for help. For many people, filing bankruptcy allows them to stay in their home. Other people need short-term assistance to help with food and child care. The support is there, if you take advantage of it.

The “Helping Families Save Their Homes in Bankruptcy Act of 2009” would allow bankruptcy judges to restructure home mortgages to prevent foreclosure and keep more people in their homes.

When it came up for a vote this summer, the bill was defeated after some heavy lobbying efforts by banks and lenders. But the reform may not be completely dead.

This week, the Senate Committee on the Judiciary will hold a hearing called “Worsening Foreclosure Crisis: Is It Time to Reconsider Bankruptcy Reform?”

This hearing could rekindle talks of giving bankruptcy judges more power to adjust mortgages to make them affordable. We’ll follow the hearing closely and keep you posted on any developments.

Scammers are apparently preying on struggling and out-of-work Americans in two major ways:

• Identity theft scams: Some scammers pose as employers and post fake job opportunities on employment websites or hack into legitimate companies to get job seekers’ sensitive information.
• Get rich quick scams: Others are posting lucrative-seeming job offers, knowing that many people are desperate to recover their lost finances. After a victim makes his or her initial “investment,” the scammer keeps the money.

At the beginning of the month, the FTC announced that it has initiated eight new lawsuits and settled or resolved seven others against companies responsible for conning consumers out of money.

The announcement is particularly poignant because many of the scams in question involved consumers already struggling to pay bills, thanks to rough economic conditions.

As part of its consumer protection efforts, the FTC has posted this video for consumers to view.

It includes confessions from a scammer who eventually went to jail for his misdeeds and personal accounts from Americans who were victimized by costly scams.

BusinessWeek reported that scammers have used stolen information in a variety of ways.

Some fraudsters sell stolen information to illegal immigrants who need Social Security Numbers for employment; others opt for more traditional identity theft crimes.

In one troubling case, online jobseekers’ sensitive information was apparently compromised in a data breach at a company called Aetna.

So what can you do to minimize your potential for getting scammed or becoming the victim of identity theft?

• Guard your personal data. Treat any identifying numbers (credit card, SSN, bank account, etc.) like gold. Legitimate companies generally don’t need your identification digits unless you’ve been offered a job (which means you’ve spoken to a person!) or need high-security clearance.
• Be skeptical of too-promising offers. If a business or investment opportunity sounds too good to be true, it’s likely a scam. The video above has some tips on how to identify and avoid costly and dangerous “opportunities.”
• Get thee to a job fair. If you’re looking for jobs, a job fair can be a great place to make contact with actual humans. Afterwards, you’ll have a better sense of who’s receiving your application (as opposed to risking sending it to a malicious scammer).

The good news is that the FTC has taken action to protect your consumer rights.

Remember, though, that you play the biggest role in actively protecting yourself!

The agency has started a Web site: Faces of Foreclosure.

The site strives to collect information from those individuals caught up in the personal crisis that is home loss.

The group hopes that the information collected on their Web site will “provide the building blocks for strong advocacy and ultimately, good public policy as it relates to the housing market in all its facets,” according to a statement from the agency as reported by the Bradenton Herald.

The site asks foreclosure victims questions that include what type of home they owned, the  size, their experience working with their lenders and what factors contributed to the eventual loss of their homes.

Foreclosures in the area around Bradenton, Florida are comfortably on their way to smashing the record, set last year, so there are plenty of stories to chronicle.

Mary Aston, a local realtor, believes the idea may help prevent another crisis like the one the area is currently experiencing.

“We still have foreclosures coming in, and I really do think if the data will help fix the system, then it’s never too late,” Aston says.

“Maybe it will prevent similar mistakes from being made in the future or maybe it will help people now who are trying to avoid foreclosure.

Other Realtors feel the data collection is overdue.

“I feel like we’re way behind,” says Kathy Marlowe. “We should have been collecting data two years ago.”

Marlowe doubts the project will help as much as its planners intend. “How can you help people avoid foreclosure when they owe $300,000 on a mortgage on a home that’s worth only $175,000? Why would they even want to stay in that house?”

A spokeswoman for the Florida Association of Realtors, Marla Martin, says the study will provide more information than standard foreclosure and bankruptcy numbers services provide.

“They don’t tell you a lot about who’s going through it,” she told the paper.

“It seems like it’s better to have all the information you can gather out of the problem itself if you want to find a workable solution or at least some answers.”

The project has received a $97,000 grant from the National Association of Realtors to assist with foreclosure prevention and promote foreclosure prevention awareness.

The organization has furthered the initiative by purchasing statewide radio spots to inform the public of their project.

Another area realtor, Greg Owens, feels that the project will have a positive impact if the information obtained is used to lobby legislators.

“I feel that to give this a human face may change public policy in the future in order to avoid this situation again. I believe we could have avoided these massive failures and kept a lot of these people in their homes.

And frankly, that is going to take a lot of changes to avoid this happening in the future.”

Source: Bradenton Herald

Thomas-Rasset was recently found liable for willful copyright infringement and ordered to pay damages of $80,000 for each of 24 songs she was accused of sharing illegally over the Internet.

This is the second time that a jury has ruled against her.

In 2007, a jury ordered her to pay $222,000, but that decision was thrown out after the presiding judge acknowledged he had made a mistake while giving the jury their deliberating instructions.

In both instances, Thomas-Rasset has told reporters that she does not have the means to pay the RIAA and would not do so even if she were able.

According to Ira Rothken, an attorney who has represented Web sites that offer mechanisms for free file-sharing, the bankruptcy court may allow Thomas-Rasset to avoid paying the damages.

Historically, the bankruptcy law prevented a defendant from discharging the debt of someone found liable of willful copyright infringement.

However, Rothken believes that in 2008, the Ninth Circuit Court of Appeals found in the case of Barboza vs. New Form that “willful” meant one thing in a civil trial and something else during bankruptcy proceedings.

In copyright cases, “willful” simply means the defendant understood what they were doing.

According to the Ninth Circuit, bankruptcy laws mandate that for debt to be non-dischargeable, the plaintiff (the RIAA in this case) must prove that the defendant (Thomas-Rasset) was “willful and malicious” in her actions, and intended to cause the RIAA harm.

Kathryn Bartow, an attorney whose firm often represents major film studios, wrote in February that “(Barboza vs. New Form) serves as a warning to trademark and copyright owners as well as the counsel who represent them in willful infringement cases.”

If the jury in her recent case had found Thomas-Rasset guilty of copyright infringement as opposed to the “willful infringement” she was eventually declared guilty of, her debt would have been even easier to discharge.

“If she had one on that point,” Rothken says, “[the debt] would be absolutely dischargeable without even having to have another hearing in bankruptcy court.

Now her conversation [with the RIAA] must be, ‘Hey, if we can’t settle, I’m going to go forward and file for bankruptcy,’ and they’ll say “Well, you’ll have to have another trial.”

Fred von Lohmann, an attorney for the Electronic Frontier Foundation, which advocates for Internet-users, believes that proving Thomas-Rasset’s malice might be very difficult for the RIAA.

“No. 1, I’m not at all sure they’d be interested in trying this case again,” von Lohmann says. “And No. 2, I’m not sure they’d win.”

The RIAA may not wish to push the matter to the point where Thomas-Rasset opts to seek shelter in bankruptcy. It has said that it wishes to settle the matter out of court, particularly since they have already achieved a coup by proving their case sufficiently to twenty-four average Minnesotans with no ties to the recording industry.

Pushing the matter further, many industry insiders agree, expends their public relations point and causes the group to be seen as bullies.

Over at the Washington Post’s Bankruptcy Beat, Jacqueline Palank looks at the bankruptcy troubles of high-end designers around the world. The list includes:

• Christian Lacroix
• Fred Leighton
• Lambertson Truex
• Charles Chang-Lima’s design studio

Money’s tight for everyone these days, whether you’re wearing Chuck Taylors or Manolo Blahniks. Here’s to hoping you look good, whatever the economic climate.

1. Abe Lincoln, the 16th President of the United States sought asset protection in bankruptcy when he declared in 1833. It took him 17 years to pay off friends who had given him money to start his business.
2. Recently deceased TV legend Ed McMahon filed for bankruptcy upon learning that he was late $644,000 on a $4.8 million loan for a home in Beverly Hills, California. His lender had filed a notice of default.
3. Oscar-winning film producer, and animation and theme park pioneer Walt Disney filed for bankruptcy in 1923 after backers for the corporation he started two years earlier pulled out. In 1921, he started the Laugh-O-Gram Corporation in Kansas City, Missouri, with only $15,000 from investors. It proved to be too problematic for New York distributors of his animated fairy tales.
4. Trailblazer automobile manufacturer Henry Ford went broke almost three times before he sold his first car, and filed for bankruptcy.
5. Marvin Gaye filed for bankruptcy in 1976 after an expensive divorce, tax problems, and drug addictions. To deal, he moved to Hawaii and lived in a bread van.
6. M.C. Hammer decided on filing bankruptcy in 1996 after telling the U.S. Bankruptcy Court Central District of California that he was $13.7 million in debt and had only $9.6 million in personal assets.
7. Talk-show host and best selling American author Larry King filed bankruptcy in 1978 at which point he was $352,000 in debt, accused of stealing $5,000 from a business partner, and charged with grand larceny.
8. In 1979, Tom Petty filed for Chapter 11 bankruptcy with debts of $500,000. He was in the middle of negotiating a ploy against MCA Records which had recently bought Petty’s indie label Shelter Records. Not wanting to go to a new label without consent, Petty viewed bankruptcy as a way for him to negotiate a fresh deal with his new label home.
9. Anna Nicole Smith, 1993’s Playboy Magazine “Playmate of the Year,” filed for bankruptcy in California in 1996 as a result of an $850,000 judgment against her in a sexual harassment lawsuit.
10. Donald Trump’s Trump Entertainment Resorts Inc. filed for Chapter 11 bankruptcy protection on February 17, 2009. His casino group, Trump Entertainment Resorts Inc. had assets of about $2.1 billion and total debts of about $1.74 billion as of December 31, 2008.

When filing bankruptcy in California, Dykstra, who is 46, claimed less than $50,000 in assets and between $10 million and $50 million in debts.

In an e-mail to the Inquirer, Dykstra, currently a resident of Lake Sherwood, California, said that “sometimes the difficult decisions in life are the most necessary.”

His bankruptcy attorney, Walter Hackett, issued a statement indicating that the filing would:

“shield (Dykstra’s] from a host of meritless claims. This action will provide Mr. Dykstra time to reorganize his estate and successfully challenge the multitude of meritless claims that have been made against him.”

One troublesome asset-turned-debt appears to be The Players Club, a glossy magazine that Dykstra launched in 2008.

The publication targeted professional athletes and advertised many of the creature comforts reserved for the ultra-rich, including private jet services.

Dykstra has been accused of not paying for services rendered to the magazine, with at least one staff member, Kevin Coughlin, a former photo editor, filing a lawsuit to recover unpaid wages.

Coughlin wrote an article detailing his experience working for The Players Club for GQ magazine, titled, “You Think Your Job Sucks? Try Working for Lenny Dykstra.”

When contacted by the Philadelphia Inquirer regarding the claims that he was in dire financial shape, Dykstra told a reporter that he was taking the call while driving his Rolls Royce, implying that he was doing well financially.

Dykstra’s bankruptcy filing reports that the former slugger earned $36.5 million during his twelve year MLB career, which ended with his retirement in 1996. Eight of those years were spent in Philadelphia.

Dykstra has also reported having made millions of dollars via Wall Street investment opportunities.

He has also invested in numerous entrepreneurial opportunities, according to the LA Times, including the above mentioned magazine, a chain of car washes and even a column for investment site TheStreet.com.

As recently as April, Dykstra told ESPN that he was worth $60 million. The same article reported that Dykstra has been the subject of two dozen legal actions in the past two years, with litigation pending or in progress from coast-to-coast.

His filing lists credit-card companies, banks, attorneys, printers and auction houses among his creditors.

He owes JPMorgan Chase & Co. $12.9 million and $229,000 to his literary agent.

The three-time all-star owns a mansion in California worth $18 million, but this property is reported to be in foreclosure.

Even family members are piling on—Dykstra’s brother, Kevin, is also suing the former player and claiming that he was not paid his stake when Dykstra sold a chain of car washes the two co-owned for $50 million.

The fate of his Rolls Royce remains unclear.

Sources: The Philadelphia Inquirer, The Los Angeles Times

The experts include:

• a popular blogger dedicated to giving readers the deals not otherwise known by the general public
• a Washington D.C. based corporate mogul who runs a billion dollar HP company and is seen as a visionary in the world of finance and economic reform
• a Chicago-based real estate expert who aids his consumers daily in the plight of real estate purchasing, financing and recovery
• a Wall Street broker and top blogger
• a San Francisco-based financial guru with a leading blog
• leading hedge fund managers

The prevailing thoughts were that of tension, apprehension and uncertainty by all who were a part of this informal questioning.

Along the same lines, the impressions of where the country stands were similar, with a new moniker being placed on our economic status: “The Great Depression 2”.

Whether this characterization is true still remains to be seen and might only come to fruition in hindsight.

However, one thing is clear: Relief is long from being in sight and life as the general consumer knows he or she will not see full recovery for as much as 10 years.

The first of the five questions asked of our financial experts was that of a more simplistic one.

With little frill or extravagance those being questioned were given the short task of offering their opinions on the current economic status of the country. Simply stated,

How would you describe the current status of the economic climate within our country?

While the responses by all the respondents were of similar nature, with similar tone and rhetoric, there were certain responses that defined a tenure in our society, thus producing a billboard effect for the voice of our country’s consumer.

David Hochberg, President of Townstone Financial a Chicago-based Mortgage company, is seen throughout the home loan industry as an expert in loan services as well as a viable source of accurate information as it pertains to the common consumer of home loans, was plain in his response to the question.

Hochberg states that Illinois, in particular, is in a state of peril not seen for decades.

With the home loan industry under heavy constraints and more and more debtors facing the bankruptcy cycle, Hochberg feels it will be many years before the lending institution recovers.

Even then, Hochberg continues, “the composition of the typical home loan applicant will be much different as will their needs.”

Taking on more of a bird’s eye view of the nation’s economic status while simultaneously drilling deep into the overall perception of where our economy sits is David Morris who is the Director of Mergers & Acquisitions for EDS Corporation (a Hewlett-Packard company).

Mr. Morris is a Georgetown alumnus who sits high a perch one of the country’s largest companies, and is relied upon to help orchestrate the company’s economic prowess amongst its competitors.

This in turn serves to provide a certain benchmark for the typical consumer to work from.

David had this to say about where the US economy sits:

“No bubble of any kind in our history has been solved on the first try or in an abridged manner. Pick up any piece of historical analysis by Robert Shiller for a glimpse of what to expect.

Injecting liquidity into the system only holds the doors open long enough for those in charge to execute their contingency exit strategies. A washout of failed participants is the only proven way to eradicate prior excess and cleanse the system.

We are simply in a synthetic environment that buys our government time to deal with the real problems at hand. Any upside in the stock markets between now and the end of the year should be looked at as a gift to exit long positions and reposition for the markets heading south into 2010.”

In a similar breath of displeasure and lack of short-term promise is the reply from John Thomas, a senior blogger for the site Seeking Alpha, which is widely considered to be the premier financial blog site—even earning top honors from Time Magazine.

Thomas who works under the title Mad Hedge Trader (Thomas also works as a Hedge Fund Manager in his ‘day job’) was very clear in his opinion:

“We are now full faced in the great depression number two. With that, there is sure to be a 5-10 year gap for recovery with real estate finding itself more towards the 10 year mark.”

Finding conjoining thoughts with both Morris and Thomas is famed economic blogger Mike ‘Mish’ Shedlock.

Shedlock who has a vast knowledge of the trends and incubus of the nation’s economy offered a profound opinion on the US economy and bankruptcy.

Shedlock offers that we, as a nation, are now amidst a ‘secular attitude change” which is from a dismal “credit event similar to the great depression.”

Considering the overwhelming popularity of Mish’s blog, the nation seems to be taking notice of his perceptions, consequently Shedlock’s response to the question of where our economy stands in worth heavy consideration. As does those of the rest of the respondents.

Overall, anyone who resides within the US has felt the strains of economic uncertainty, financial unfamiliarity and personal debt shock.

For what comes next in this evolution remains to be seen.

No amount of forecasting, prophesy or analysis will completely tell the story of our nation’s newest economic collapse.

However, one particular aspect to this will remain constant, as it was in the 1930’s. The resolve and ingenuity of the American consumer to fare well in troubled times will far outlast a lack of funding or rickety financial flooring.

Filing bankruptcy is a decision not to be lead into lightly.

Although it was created to be a legal avenue to support the financial rebound for those who travel down its path, it is not meant to be—nor should it be—seen as a ‘quick fix’.

The tasks for such financial declaration are laborious and heavy handed, with numerous ramifications resulting from the process.

The ideological change which abounds from a successful navigation of bankruptcy, if followed as the process is intended to be, is such a reformation that most who chose bankruptcy resurface from it far better suited for financial freedom than those who succumb to the far less successful products of financial distress:

• foreclosure
• repossession
• lack of housing
• unemployment
• divorce
• illness, injuries or death

Consequently, filing bankruptcy can often be a prescription for financial remedy far better suited for the current economic status we Americans are knee deep in.

The Cubs are currently in the process of being sold by their owner, the Tribune Company, who filed for bankruptcy earlier this year. If the Cubs do file, they will be the first baseball team in forty years to do so.

Although still in negotiations, the Tribune is looking to sell the Cubs and Wrigley Field for around $900 million. This cash will go towards the Tribune’s own debt. The leading contender to take ownership of the Cubs is an investment group headed by Chicago-native Joe Ricketts, although there are rumors of another group making a late push.

By all accounts, jokes about the Cubs offense being bankrupt since April are fair game.

The cars in the showroom are the same, luxury brands of all types surrounding the centerpiece—a red Bugatti costing $1.6 million, but they aren’t selling.

To save money, Ryan Dohogne, general manager of the dealership, says that his staff now take care of the window washing and plant watering on their own.

Similar stories crop up all over this stretch of California.

Until recently, high-tech centers like Silicon Valley were thought to be “recession-proof” given the industry and related economic activity centered nearby.

Last fall, however, previously invested funds ran out, and capital, normally provided by investment firms and venture capitalists froze up.

The result?
Santa Clara County, home to Silicon Valley, has seen bankruptcies increase 59 percent over the past year, and that number is projected to increase before the recovery catches up with the industry.

In other tech centers, things are no better.

Near Raleigh, North Carolina, unemployment has doubled, and is now at 10.7 percent.

The state has lost nearly 200,000 jobs since early 2008, and one out of every five has come from the Research Triangle, a tech sector near Raleigh and Durham.

In Boston, home to several tech centers, foreclosures have tripled since last summer and are on track to break records.

Professor Ed Malecki, a digital economy expert at Ohio State University, explains the dilemma.

“Venture capital,” essentially money invested in exciting ideas, “lives off of private wealth. There’s simply less of [that] around right now.”

In Silicon Valley, bankruptcy is a growing reality.

Sam Taherian, a bankruptcy attorney, says he is seeing a growing number of prospective clients visit and take advantage of a free consultations.

After that, he says, people typically take a month or two to decide whether or not to file, but just the number investigating the option suggests to Taherian that his caseload is about to get heavier.

Foreclosures are harder to spot in such a wealthy area, but even in a new complex of townhouses near Santa Clara, 10% of the units for sale are available because of foreclosures.

Robert Lei holds a master’s degree in semiconductor device physics, but he has bowed to the reality of the times—now he is a specialist in foreclosure sales.

“They don’t hang out signs because they want to be discreet,” he says. “They don’t want so many people to see so many ‘for sale signs’ and get scared away, like there’s something wrong here.”

Workers with master’s degrees are lining up at local food pantries and employment centers.

The recession took a while to reach Silicon Valley, but now that it’s here, things feel just about the same.

Recovery should be just around the corner, particularly with the emphasis on green jobs that will be fueled by the spirit of innovation and entrepreneurship that has made this region famous, but in the mean time, people are taking a cue from the rest of the country and simply trying to whether the storm.

Source: The Associated Press

And, unfortunately, many of us still aren’t reading every item included in these contracts.

Between irritatingly small type, difficult legal language and time shortages, that’s no major surprise.

But there’s one section of any agreement you should understand – the “arbitration clause.”

In contracts (especially those for credit cards), arbitration clauses state that, should a dispute arise between the card issuer and you, the card user, that dispute must be resolved out of court – that is, it must be arbitrated.

If your credit card agreement includes an arbitration clause and you have a dispute with your card issuer, you can expect something like this:

1. Your creditor files paperwork with an arbitration firm: The National Arbitration Forum (NAF) is one of the country’s largest arbitration firms. Many credit card companies, retailers and banks work exclusively with the NAF.
2. You get mail that announces the beginning of your dispute’s arbitration: This may be the only notification you get that your case is being arbitrated. It may be easy to mistake this mail for junk or an ordinary bill, which is why some consumers never realize their cases have begun.
3. An arbitrator decides your case: This is the part of the process that upsets many consumers: without a court-style hearing, ostensibly impartial judges decide these cases and alert the concerned parties. Also unlike court cases, there is no way to appeal an arbitrated decision.

Some consumer advocates have raised concerns about how arbitration clauses work – or don’t work – for run of the mill credit card users.

An article that appeared in BusinessWeek stated that most states do not require arbitration firms to release their figures, but in California, where such figures are released, the numbers are scary.

It seems that 99.8 percent of cases decided by NAF favor creditors, not consumers.

And a startling 93.7 percent of arbitration cases begin and end without any consumer participation.

This suggests that consumers are not even aware of what’s going on.

An Arbitration Reform bill has reportedly been introduced into both houses of Congress, and, if passed, could change the way arbitration cases work.

But the bill will likely face hurdles, since eliminating the arbitration option could mean that disputes flood courts, causing backlogs and increased costs.

To make sure you aren’t victimized by questionable arbitration practices, take these precautions:

• Read everything before you sign it. If you need help deciphering tricky legalese, consider enlisting the help of a bankruptcy attorney for an afternoon – any fees may save you money and time in the long run.
• Open and read all mail from your bank and card issuer. If you don’t understand something you see, call the companies until you get a clear explanation.
• Participate in your own case. Whether or not you sign up for a card that requires arbitration, know that your input can make a difference in how much you end up paying.

Panitchpakdi is worried about the effect a bankrupt country might have on the global economy, according to Edith M. Lederer, writing for the Associated Press.

According to Panitchpakdi, he is currently working to help 90 poor countries who have vulnerable economies.

In many of these cases, the nations carry debts beyond 100 percent of the value of their overall economies.

Such countries have been pleading for more money to shore up their economies, which have been placed under extreme stress by an economic crisis that originated in much wealthier, developed nations.

Once participant in the summit, Prime Minister Stephenson King of St. Lucia, implored the international community to recognize the direness of his country’s situation and provide “a significantly larger amount of grant funding” in the next several years.

“We simply cannot afford the stranglehold of additional debt,” King says.

The prime minister also pointed out that there is no international court to deal with a country filing bankruptcy and therefore every country would have to rely on its own set of regulations.

Panitchpakdi suggested that the United States Bankruptcy Code, specifically Chapter 11, might serve as a model for allowing countries to reorganize their debts.

Martin Khor, executive director of the South Center, a research organization based in Geneva, Switzerland, agrees that the need for such a system is growing.

“We are afraid that many developing countries will be plunged into a new debt crisis which would be very unfortunate,” Khor says.

He points out that the World Bank recently identified as many as 40 nations with serious debt problems that have arisen following the global economic downturn.

Khor feels that an “international debt arbitration system” is long overdue.

The idea was first raised by UNCTAD in the late 1990s, and later by the International Monetary Fund.

For nations whose reserves are running dangerously low, Khor suggests a court that could reorganize the creditors to meet with the debtor nation and calculate exactly what their debt is worth and how much creditors should be repaid.

Under such a system, there would be no litigation against a debtor, “and finally new financing should be given to the debtor so that the country can continue again as a viable entity,” Khor said.

Following the Asian tsunami crisis of 2004, the countries hardest-hit by the disaster were given a five-year debt moratorium by the international community, and Panitchpakdi says a similar moratorium may be needed again.

To address what he sees as “the missing link we are seeing at the moment in the international financial system – [which] is a system to deal with so-called sovereign debt insolvency by a country,” the UNCTAD chief believes that during a debt moratorium, “some new financing could be generated so countries could go on living and paying attention to their own economic growth – and at the same time to be looking at the debt restructuring in a way that would have the involvement of the international institutions like the International Monetary Fund.”

Whatever the eventual implementation, it seems likely that bankruptcy, just like everything else, is well on its way to going global.

Source: Forbes.com

The City of Chicago is looking into hiring some debt collection agencies - some of them with checkered pasts - to collect outstanding debts owed to the city. This includes unpaid utility bills and parking tickets.

Just a few months ago, the city quadrupled parking meter rates in the middle of massive economic turmoil. Now, they’ll be turning to collection agencies to ratchet up the pressure on financially strapped families.

From the Chicago Tribune’s story:

“A lot of the private companies that are in line for collecting government debt have long histories of hiring people who are abusive toward debtors,” said Joe Ridout, spokesman for Consumer Action in San Francisco. “They impugn the reputation of the government agencies that they are supposed to be helping out.”

Ridout said some collection agencies call people at work to try to embarrass them into paying. In other cases, he alleged, bill collectors have told debtors with Hispanic surnames that they could arrange for them to be deported unless they pay up.

And who will be paying for the “work” these agencies are doing? City taxpayers. This could be a huge deal for collection agencies, who are licking their lips:

The Chicago contract could be a “giant deal,” said Sean Keegan, national marketing director of United Recovery Systems in Houston. He estimated a private company would need about 200 collectors and could keep 18 percent to 30 percent of what it rakes in for the city.

If you’re dealing with collection agencies, you should keep your rights in mind. Each state has their own laws regulating how collection agencies operate. Generally speaking, collection agencies:

• Are allowed to call only between 8 a.m. - 9 p.m. If you’re receiving calls late at night the collection company could be in violation of the law.
• Cannot use profane language.
• Cannot threaten physical harm to your or anyone else or threaten to damage your property.

If you feel your rights have been violated, speak with an attorney right away. And if you want the harassment to stop, remember that when you file bankruptcy the Automatic Stay court order puts a legally-binding halt to all collection actions.

Here’s how to set yourself up for success in borrowing.

Choose Affordable Payments: Before signing loan papers or credit card agreements, you’ll need to do a four-part math problem:

1. Check your budget. Determine exactly how much money you have left over each month (no generalizing!).
2. Calculate monthly payments for your loan. Again, make sure you know exactly what you can expect from the life of your loan – no assuming, no generalizing.
3. Compare the two numbers. If your leftover money is less than the monthly payments, you cannot afford the loan. Assuming you’ll get a raise or a bonus is dangerous, especially in this economy.
4. Leave a cushion. Remember: part of financial stability is saving money for unexpected emergencies, so if you’d have to spend all your income to cover the loan, you can’t afford it.

Beware of Hidden Costs: Make sure you read the entirety of a loan or credit card agreement before signing it.

If you’re not comfortable interpreting legalese, enlist the help of a bankruptcy attorney. Be on the lookout for the following.

• Fees & costs associated with the account. Yearly charges, overdraft charges, late charges, early payment charges and others add up quickly and can cost more than you realize.
• Fluctuating interest rates. Credit card issuers are infamous for advertising low interest rates, but not the fact that many such rates last for only a short period. Make sure you understand what events could lead to your paying more in interest (missed payments, going over your limit, etc.).

Avoid Common Predatory Practices: Unfortunately, some lenders will count on your ignorance about lending practices to trick you into paying more than you should.

Watch out for common schemes like the bait and switch, equity stripping, loan packing and loan flipping.

Many people are eager to reestablish credit after a bankruptcy filing, but don’t let this drive to improve your finances lead to poor borrowing decisions.

Right after filing bankruptcy, you can expect to pay a bit more in interest rates and to qualify for lower loan amounts.

But, if the offers you receive seem too expensive, wait a while.

With a year or so of strong credit practices under your belt, you should be able to get more affordable loans – and improve your chances of improving your credit and staying debt-free.

According to the survey, the most stressed states are California, Michigan and South Carolina. Across the country, stress is up slightly from April. From the report:

California has been battered by the housing bust, and Michigan has absorbed the brunt of the auto industry crisis.

“And South Carolina is a little bit of everything,” said Sean Snaith, economics professor at the University of Central Florida. “Manufacturing and construction jobs have been hard hit in the state.”

One common thread running through all three states is heavy jobs losses. Rising unemployment, in turn, is escalating foreclosures and bankruptcies.

Other states under intense financial stress include Oregon, Indiana and Tennessee. Las Vegas continues to be one of the most financially stressed cities.

Are you feeling stressed? Tell us how you’re coping.

Need stress relief? Learn how to stop creditor harassment.

This was the first time for such numbers since the subprime lending boom began.

Sources suggest that two major factors are contributing to the upswing in prime foreclosures:

• Rising Unemployment: Though the unemployment rate for those with some type of college degree is 4.4 percent (compared with an 8.9 percent rate overall), this number represents a significant jump from a year ago, when unemployment among the college-educated was just 2 percent. This means that some families who counted on sustained income to keep their houses are now struggling to make payments – or finding they cannot.
• A Glut of Unsold Homes: Because so many houses are currently on the market, selling a house has become a serious challenge, especially for those with bigger mortgages. This means that many of those struggling to pay off debts because of job loss cannot even raise money by selling their houses – the demand for real estate is currently very low.

As you may already know, it’s a great time to buy a first home.

The sheer quantity of homes on the market means you’ll have a lot to choose from, and the current interest rates favor the purchasers rather than the vendors.

But if you’re looking to sell a larger (rather than a “starter”) home, you may not be so lucky.

Those who may be pushed by tantalizing interest rates to buy a home sooner than they would have otherwise likely won’t be interested in large, elaborate homes – especially in light of the cautionary tales told over and over by those suffering from the current foreclosure crisis.

Experts have predicted a variety of timetables for the prime foreclosure crisis.

The least optimistic among these put the crest two years for now, with steady foreclosure action well into 2012.

And Making Home Affordable, the foreclosure-prevention plan introduced by the Obama administration has reportedly only helped about 17,000 homeowners to date – far fewer than the seven to nine million who could benefit from the program, according to its Web site.

If you’re concerned about losing your home to foreclosure, it may be time to speak with one of our sponsoring bankruptcy lawyers about your options.

The Numbers

• A recently released Consumer Reports survey showed that 20 percent of Americans (that’s one in five!) have been victimized by online criminals in the past two years.
• In that time, sources estimate that cyber criminals absconded with $8 billion of victims’ money.

These figures are shocking, but they don’t mean that victimhood is unavoidable. In fact, related studies have shown some important steps you can take to protect yourself, your computer and your personal information - credit card numbers, SSN, bank information, etc. - from thieves.

Dangerous Browsing

So how do online crooks trick you into parting with your cash? Much more cleverly than you might have suspected. A report released by McAfee called “The Web’s Most Dangerous Search Terms” reveals a lot about how online scams and crimes work.

The riskiest search terms are, in this order:

• Lyrics
• Free
• Web
• Gear, gadgets, games
• Olympics
• Videos
• Celebrities
• Music
• News

What does this mean for you? After you search a term, say, “song lyrics,” a list of websites will come up. You choose one by clicking on it. If the site is malicious, you could be compromised in a couple ways:

• Simply visiting the site could infect you
• Clicking on any links on the site could harm you

What Happens Once You’re Infected

Criminal sites often work by installing spyware onto your computer. You might find that some of your online passwords don’t work, then find yourself redirected to a site on which you have to enter personal information to “confirm” your identity.

Unfortunately, many scam sites look legitimate. And many Americans have spyware on their computers. Some spy programs work by recording password information you type in and sending it to another computer (the criminal’s).

How to Protect Yourself

1. Stick to sites you know and trust. Understand that, when you attempt to download things for free, you may get much more than what you pay – in an unpleasant way.
2. Install security programs onto your computer. You can buy them or check out these free security programs.
3. Update your computer regularly. Many updates are designed to protect against the latest scams and viruses.

Many of the “exotic” mortgage products and predatory lending strategies that allowed Americans of all income levels to overextend themselves on credit could only succeed in a culture where only those who work in the financial industry have adequate understanding of how the financial system works.

Money Smarts Lacking in the U.S.

If you’re like most Americans, you aren’t as financially savvy as you could be:

• Average scores on financial literacy tests administered to school-age children have dropped steadily over the years, with 62 percent failing in 2006.
• Surveys show that as many as 21 percent of 18- and 19-year olds have at least one credit card.
• Young adults (aged 18 – 24) spend about 30 percent of their income on repaying debt, three times the recommended 10 percent for this purpose.
• About one in five American households is “unbanked,” meaning that they do not keep their money in a standard, federally insured financial institution.
• Of households that carry revolving debt (such as credit card debt), the average amount is between $10,000 and $12,000 – and this doesn’t even take into account debt from mortgages, car loans, etc.

And, while these numbers are upsetting in themselves, they’re even more disturbing when considered in context: if almost nobody understands financial matters, who is expected to teach us?

Proposed Bill Would Fund Financial Literacy Education

While the current state of the economy means headaches for most of us, it also means our legislators are taking action to make things better. According to this press release, Senator Kay Hagan (D – N.C.) has proposed a bill that would provide funding to states that include financial literacy educational programs for sixth to twelfth graders.

According to the release, the bill would:

• Require that 80 percent of money be funneled to student instruction
• Allow the remaining 20 percent of funds to go toward professional and curriculum development

The bill is currently beginning its path through the Health, Education, Labor and Pensions committee of the Senate – consider contacting your senator if it interests you.

1. Bring Home the (Irregular) Bacon: According to this CNNMoney.com article, Marriott hotels found they could save two million dollars a year by switching their bacon from regular, rectangular strips to irregular slice – without sacrificing taste.Make it work for you: Now is the time to experiment with less expensive alternatives to your usual purchases – cuts of meat, brands of soap, Netflix packages. Don’t let a habit - also known as a rut! - keep you from looking for cheaper alternatives.
2. Reevaluate the Extras: When airlines began charging extra to check bags, board first, have snacks, etc., many Americans were less than amused. But we also learned to pack lighter and bring our own food along.Make it work for you: Most of us pay for stuff we don’t really need or use. Take the time to reevaluate your spending to find and cut unnecessary items. Whether you opt for a cheaper cell phone plan, fewer cable channels, slower Internet or a different thermostat temperature, you could end up saving noticeable money.
3. Share Whatever You Can: As this article describes, two Chicago-area wedding planners discovered they could save serious money by moving their complementary businesses into one storefront.Make it work for you: Sharing can mean a lot of things – trading nights of babysitting with friends, pooling funds with neighbors for a big purchase like yard equipment, renting a room of your house to a boarder, etc. Even carpooling or joining a vehicle-sharing company like ZipCar can save you money by spreading the costs over a large group of people.
4. Don’t Rule Out Bankruptcy: As GM and Chrysler have shown us, even major U.S. corporations sometimes need the protection of the bankruptcy court.Make it work for you: If your finances are beyond rescuing on your own, consider filing for Chapter 7 or Chapter 13 bankruptcy. This type of protection is a last resort, but it exists for a reason – to give struggling consumers and businesses a chance to start over financially. Check out these articles on celebrities who have filed for bankruptcy in the past.

What is Income-Based Repayment (IBR)?

IBR is a program introduced by the government in 2007; however, its full effects don’t start until July 1st – which is perfect if you’re a recent grad. Essentially, the program was designed to make sure that graduates who aren’t making the big bucks right after graduation aren’t spending all their earnings on repaying student loans.

IBR can help with people who meet the following criteria:

• Have loans (to students, not their parents) from either the Direct or Guaranteed (FFEL) loan programs or (most) government-funded loans
• Have enough debt to qualify. Specifically, have debt that would require you to spend more than 15 percent of your income in excess of 150% of the poverty level to pay off your loans in ten years – calculator available here

Interest Rates for Adjusted Loans

While the IBR program may make your monthly payments more affordable, it could also mean that your monthly payments don’t cover your full interest rates. This means that:

• For federally subsidized loans, the government would pay the remaining interest for the first three years
• For non-subsidized loans, the unpaid interest would be tacked onto the principal amount you owe

The second option may mean you end up paying more in the long term, but if your earnings increase over the years, this likely won’t be too big a problem. Plus, the IBR program has the unique caveat that any amount still due after 25 years is forgiven.

What is Public Service Loan Forgiveness?

It’s the other loan forgiveness program taking full effect this month, and it’s designed to help those who work in certain so-called public service jobs, including those for the government and nonprofit 501(c)(3) organizations.

If your job qualifies under this program, your loans may be forgiven in full after 10 years of work (during which time you make normal loan payments). And, if your salary qualifies you for IBR loan payments while you’re working, you can still use that program to make payments more affordable.

To find out whether your employment situation may qualify you for help with student loans, visit this website [www.ibrinfo.org].

DrSteve gives us the tale of a man in Texas who was living his dream - married, owned his own company, had health insurance - until a car accident radically altered his life and left him homeless.

The medical bills quickly blew past what his insurance would cover.  The owner and driver of the other truck did not have insurance, like 10-20% of vehicle owners despite the mandate to buy auto insurance, so Mr. Benson and his insurance company were unable to go after that source.

I’ve been doing some research on medical debt and bankruptcy lately, and this story was heartbreaking. Sadly, it shares much in common with many of the people who run into serious financial problems following an illness or injury.

Medical bills can quickly become overwhelming, even for the insured. If you need serious health care, the financial fallout is often more than just another bill.

Many people lose significant work time because of illness or injury. The new bills and loss of income may put strains on their mortgage or lead to an increased reliance on credit cards, which can also get out of hand quickly.

Fortunately, DrSteve’s story has a happy ending:

Eventually, he wound up in a shelter, and eventually he was able to put his professional chef skills to work in the “soup kitchen.”  From that he has worked his way back to sobriety, fulltime employment and housing.

If you’re facing severe medical debts, don’t wait to take action. If you need to get your debt under control, know that help is available.

You’re probably familiar with the tales of atheletes wasting their millions on lavish extravagances. Jason over at Automatic Finances has a great post that pulls some practical advice from athletes tales of money mispent on bad investment and shady “financial managers.” But what’s scary are these stats:

78% of retired NFL players are bankrupt within 2 years. For NBA players, 60% are broke within 5 years of retirement.

However, the athletes profiled by USA Today aren’t in this mold. Take Hall of Fame defensive lineman Willie Davis. He played for Vince Lombardi in the days before million-dollar contracts.

The now-73-year-old managed his money wisely - at one time, his banking investments were worth millions - has scene his fortune dwindle because of the housing bust. Former New Orleans Saints running back Deuce McAllister owned a Nissan dealership that was forced to file for bankruptcy.

These tales are reminder that even smart investments can turn sour for even smart businessmen. Financial pitfalls could befall anyone, even if you’ve saved for a rainy day or watch your budget closely.

Just remember: If you find yourself in rocky financial waters, know that you do have options, and there is help available.

It’s been a long-awaited return for Michael Jackson, as this would be his first concert in 8 years.

Whether the concert series was Jackson’s intent on returning to the music which gave him his glory, or if it were more of a financial life vest to keep Jackson and his entourage afloat, it’s certain his return was celebrated by his fans across the world.

In the course of Michael Jackson’s life and career he sold hundreds of millions of records and played in sold out arenas around the globe.

Jackson was a pop icon who gave us memories to last a lifetime.

With all this fame certainly came a fortune, so it’s plausible to assume that Jackson should of collected one of the largest fortunes in the entertainment industry in recent memory.

Sadly, this is not the case.

Due to faulty management and representation, excessive personal spending and surmounting legal bills, it’s rumored that Michael Jackson was facing bankruptcy.

The news of such financial distress came as both a shock and comfort to those in similar peril.

To know that an iconic person such as Jackson could be faced with the probability of filing bankruptcy made many feel they were not alone.

It also served as further proof that bankruptcy is not biased nor prejudice, it crosses all socio and ethnic borders.

The financial predicament which Jackson found himself navigating through was mostly due to the fact that Jackson’s camp continued to spend tens of millions of dollars a year even while his musical creation had been limited to his latest album in 2001.

In plain terms, his income did not meet his expenses, which is so often crisis which leads many into the bankruptcy fold.

To compound the issue, Jackson was faced with having to render himself to typical acts of desperation, which many do when in a similar situation, Jackson financed these personal debts by borrowing against assets and by some estimates his total borrowings at his death may have exceeded $500 million.

The iconic nature of Michael Jackson was not enough to ward off financial ruin.

As many others throughout the country are facing financial distress and the prospect of bankruptcy, there might be comfort in knowing the same man who will forever be known as the King of Pop, the creator of the ‘moon walk’ and owner of Never-Never Land was in the path of bankruptcy.

For many Americans, access to credit could decrease even more at a time when credit is already notoriously tight.

The reason? They’re reacting to increased unemployment rates and card defaults. Too many people are missing their payments.

Even if you’ve made all of your payments on time, you may still see your spending limit cut.

Traditionally, credit card issuers have reduced customers’ borrowing limits for one of the following reasons:

• Bouncing checks: When done consistently, this shows carelessness and suggests a borrower may not have enough money to make regular credit card payments.
• Making late payments: Though such payments may earn card issuers extra money in the form of late fees, late payments are dangerous if they become too late… that is, if they never arrive.
• Collecting unemployment: Unfortunately, job loss generally signals income loss. Though layoffs in this economy are often beyond an employee’s control, they may still push card issuers to limit borrowing ability.
• Taking cash advances: Besides being a terrible way to borrow money, cash advances (often in the form of payday loans) can signal to your card issuer that you’re in over your head financially.
• Living in the “wrong” neighborhood: Unfair as it may seem, your address may trigger a limit cut. If property values near you are falling, your credit card company may decide to slash your spending power.

Thanks to the unstable credit market, some people are seeing their limits cut for other reasons as well, including:

• Defaulting on another card: Universal default is the phenomenon that allows your action on one account to affect all your other accounts. In this case, a late payment on one card may cause your limit to be cut on another.
• Not using your card: Inactive or hardly active accounts seem to be getting hit by limit decreases, even when borrowers are in good standing.
• Running a low balance: Though this has traditionally been a positive move for credit building, sources report that these accounts have seen some cuts as well.

Part of your credit health (as quantified in your FICO credit score) is determined by your debt-to-credit ratio.

In other words, a comparison of how much money you’re currently borrowing (debt) to how much you could borrow (credit).

Staying well under your limits is one way to strengthen your credit.

First, be sure to read all mailings from your card issuer carefully.

If you receive a notice that your limit has been cut, don’t accept it without a fight.

Call and question your card issuer, particularly if you believe your account is in good standing and doesn’t merit such an action.

Jackson’s most famous residence, the lavish, one-of-a-kind, amusement park-like Neverland Ranch, hadn’t been his home for many years.

Amazing pictures of Neverland Ranch.

Jackson purchased the property in 1987 for almost $20 million. At the time, it was a working ranch, but under Jackson’s care it would become a shrine to the childhood Jackson never had. From nineMSN:

The singer spent $35 million improving the property, which featured two railway lines, two helicopter pads, its own fire department, a zoo and a plethora of amusement part-style rides. The property cost an estimated $10 million a year to maintain.

Jackson lived at the ranch for many years, and underprivledged and sick children from California and across the country came to visit his theme-park.

But all the while Jackson was very private about the property. Visitors weren’t allowed to take pictures inside, and they were required to sign confidentiality agreements upon arrival.

Perhaps the most intimate view of the property came from a lengthy “20/20″ report that highlighted some of the property’s extraordinary features.

But the joy of Neverland Ranch, named after the magical land in “Peter Pan” were children never grew up, wouldn’t last.

Jackson had an almost $25 million loan out on the house. In 2007, he was $23 million delinquent on the loan and foreclosure proceedings began.

In California, after you miss three mortgage payments in a row you have 90 ndays to make a payment. Jackson, who hadn’t released an album since 2001, was unable to make a payment.

For most people, this would have been the end of the line. For most people facing imminent foreclosure, bankruptcy is the best option for protecting their home. Of Course, Michael Jackson isn’t most people.

Jackson’s celebrity helped stop home foreclosure. His debt was transferred to another loan company, and the property stayed with him.

However, Jackson continued to have money problems. The zoo and many of the amusement park rides were auctioned off. With money problems and child molestation charges - stemming from a child’s visit to the ranch - Jackson said he could no longer feel at home there.

And then the man who had already spent so many nights in hotels across the world while on tour, began living elsewhere.

At the time of his death Neverland Ranch was still in Jackson’s possession. Today, the property is valued somewhere between $90-120 million. With his death, the property may be worth even more.

But with Jackson’s debts rumored to be near $500 million, the property could be auctioned off to pay his creditors. Others, however, say that the property may become a museum similar to Elvis Presley’s Graceland.

If we were too young to remember him belting out top hits as a round-faced child, we probably have vivid memories of him monster-dancing on MTV or dangling his kid over a Berlin balcony.

And as the globe starts to process his death, we take a look at the entertainer’s troubled fiscal life.

Jackson left this world with his checkbooks in disarray.

There was hope that his upcoming, sold-out 50 show London tour would sweep him out of the red, but that hope shattered yesterday when he died in an LA hospital after a cardiac arrest that was rumored to stem from a Demerol injection.

The King of Pop died with as much as $500 million in debt, according to sources recently cited in the Wall Street Journal.

When you look at some of his wild purchases, it’s not hard to understand how his debt got so out of control.

Some of the items he bought included:

• a Ferris wheel and the rest of the infamous Neverland playground
• a bronze sculpture of an Indian
• an arcade collection
• a personal ice cream cart
• a life-sized Lego model of Darth Vader
• a 1989 Rolls Royce limo with 24-karat gold trim
• a statue of E.T.
• a zoo (remember Bubbles Jackson?)

And that’s just a fraction of his possessions.

When Jackson was on trial in 2005 for child molestation charges, a forensic accountant testified that Jackson was spending $20-$30 million every year. (Jackson was later acquitted of all criminal charges.)

But Jackson’s money problems go well beyond shopping sprees.

Years before the criminal trial, Jackson settled a civil lawsuit for $22 million with a boy’s family who alleged Jackson sexually assaulted the child.

Jackson and his reps denied any wrongdoing and said he was settling to “move on”.

As recently as last year, Jackson was sued by the son of the King of Bahrain who said he owed him $7 million.

Jackson argued that he thought the sheik had given him gifts, but the sheik said he had actually invested in a songwriting business with the pop legend.

Jackson ended up settling with him for an undisclosed amount.

Lawsuits, settlements and frantic shopping sprees add up quickly.

So, the question left to answer is what happens to all of his debt now he’d dead?

Typically, family members are not responsible for the debts of a deceased love one; however, there are exceptions.

Read on for information on how Jackson’s debts could fall to people close to him.

Contrary to popular belief, in many cases, loans are not automatically dismissed just because the debtor dies.

Secured debt (debt tied to a property, such as a home or car loan) can still be repossessed by the bank to cover the balance of an unpaid loan.

That means a dead person can lose their home or car even after they’ve been laid to rest.

If another person’s name is on the loan, they would likely be responsible for the debt.

So, for example, if Lisa Marie Presley (Jackson’s former wife) signed on a mansion with him, she could likely be responsible for that debt.

If any person held joint credit cards or lines of credit with Jackson, it’s probable they would be responsible for paying the remaining debt.

Keep in mind, if a person is an “authorized user” on a credit card, (which is different than a co-applicant or joint account holder), then they typically don’t have to pay.

But there’s a twist—under certain circumstances, an authorized user may still be liable for those debts because the balances on those accounts may become the responsibility of the estate.

If someone was a co-signer on a loan Michael Jackson took out, he or she may very well be responsible for that debt.

Co-signers often get the short stick.

In fact, co-signers are usually even responsible for debt if the original debtor files bankruptcy (except in most cases of Chapter 13 bankruptcy).

As fans wander through the stages of mourning, a strong feeling emerges—Michael Jackson can’t not easily be defined, nor should he be.

He, like us, is a multifaceted, complex human being.

Being on the brink of filing bankruptcy doesn’t define you.

Yes, he was a debtor and a shopaholic, but he also was the King of Pop, a father, a son, a brother, an artist, a philanthropist and a friend to many.

Our hearts go out to his family.