FINANCIAL NEWSLETTER June 2010

Early Filing can Saves Assets

Don't wait too long

People should consider bankruptcy when their financial woes begin, not after they have borrowed more money, and used up their savings and retirement funds to survive.

Most people are honest and decent, and feel compelled to exhaust every possible resource and it's only when they are at the bitter end that they come in and consider bankruptcy. Do you really want to reach that point?

People usually fight hard to stay out of bankruptcy. They drain all of their savings, including retirement savings accounts. They sell furniture, cars, boats, jewelry and other personal items. Hoping that things will change, keeps them struggling to survive, waiting for things to improve. Unfortunately they often continue to pay credit cards and get behind on their mortgage. They often wait too long. Disposing of assets that they could keep and leaving themselves in worse shape than necessary. I wish those people, left with nearly nothing before checking into bankruptcy, saw an attorney months earlier.

The time to check on bankruptcy is when you lose your job, your overtime is reduced, or whatever causes you to begin having trouble paying your expenses. It puts you in a position to consider the option and decide when it is time to use it. .

The cost of fighting a losing battle.

People struggling with debt that they cannot reasonably expect to repay, are prolonging their financial plight and lengthening the recovery period for the nation. The greatest good comes from getting back on your feet financially - a fresh start.

COMMON CAUSES OF FINANCIAL PROBLEMS:

I find that one of the big causes of financial problems is that people tend to spend too much on housing and cars. If you keep your mortgage payments at 25% or less of your net income, and limit car payments to 9% of your net income, you should have sufficient funds to pay all of your other expenses. Of course everyone's situation is different. Some people have high child care bills or medical expenses for example, and people with very high incomes can afford to pay a higher percentage on expenses where they choose.

One good financial planning idea is to spend:

50% of your income on the things that you need, such as housing, and food;

30% on things that you want, such as premium TV channels, Internet, and vacations; and

20% on paying off debt, then saving (everyone needs a rainy day fund), and saving for retirement (don't count on social security as your only retirement income).

You may be able to discharge debts in bankruptcy and keep everything that you own.

Find out about your options before you spend your savings. In Delaware, you can file a chapter 7 bankruptcy, and keep up to $50,000 worth of equity in your home, $15,000 of equity in a vehicle ($15,000 in a second vehicle for a married couple) and $25,000 ($50,000 for a married couple) in personal property, plus clothing, retirement accounts (unlimited amount) and some other assets, without having to pay anything on your unsecured debts. If you have additional property, chapter 13 bankruptcy may be an option. Chapter 13 involves making payments for 3 - 5 years.

Mortgage Issues?

The best thing to do may be to contact your lender for a mortgage modification. Beware of anyone else trying to sell you modification assistance: you shouldn't have to pay.

Go to makinghomeaffordable.gov for assistance with Fannie Mae and Freddie Mac insured mortgages.

Check on state mortgage assistance programs.

Let your Congressman and U.S. Senators know if you can't get help.

Did you know that a chapter 13 bankruptcy can save your home from foreclosure?

You can stop the foreclosure up to the day of the Sheriff's Sale, but seek advice about this option as soon as the foreclosure starts, so that you can be prepared. You will have to resume your regular mortgage payments, and pay the arrears, usually over a five-year period.

FINANCIAL ASSESSMENT - Self test

-Unable to pay all your bills as they come due?

-Is the total amount of your debt increasing?

-Are you only making minimum payments on credit card debt, or not paying at all?

-Do you have medical bills, repossessed vehicles, large debts, or other debts that you are not paying?

-Are you behind on your car loan, rent or mortgage?

-Have you taken out title loans, or payday loans?

-Is your financial situation bad, and not improving?

-Are you living without a cash cushion, or any savings or funds for emergencies?

If you answered yes to any of the questions above, it may be time to explore your options by contacting my office.

Don't live in virtual slavery to your debt. You are entitled to relief, a fresh start, and a life.

Some tips:

If you are receiving HARASSING PHONE CALLS, you can write to each creditor and instruct them not to call you on the phone. Send the letter certified mail, return receipt requested.

If you think that you can manage to repay your debts, but need assistance, contact a reputable credit counseling company, like Consumer Credit Counseling: 800-642-2227. They may be able to lower some payments, resulting in one affordable single monthly payment.

If you had to use credit cards as a SAFETY NET to pay your expenses during a period of unemployment, lay off, reduced income, disability, or increased expenses (adjustable mortgage, increased credit card interest), it may be time to be realistic and accept that you can't pay the bills.

Beware of debt settlement companies. The majority are so bad that the Federal Trade Commission has been working to put them out of business.

WHAT OTHER CLIENTS HAVE SAID:

"My husband and I were clients of James Reed.... We found ourselves deeply in debt. [My husband] was making only 30% of what he had been making. Mr. Reed...was very knowledgeable, personable and honest about what was involved [in a bankruptcy]...he made us feel comfortable...and seemed to have a very genuine interest in our financial situation. Right away, we stopped paying our debts. The bankruptcy went just as he told us it would. Now we are debt-free...just what we needed to get a fresh start. I would recommend James C. Reed to my friends..." Jennifer W.

"You took the stigma and fear out of having to file for bankruptcy, right away, making it easy to proceed...the peace of not owing anyone is almost a tangible feeling. I would recommend you to anyone who is still hesitant to go through this process." Pat S.

FOR DEBT RELIEF: Contact the law office of James C. Reed, P.A., (302) 227-2477

I am a member of the National Association of Consumer Bankruptcy Attorneys (NACBA), the premier association of attorneys who do personal, consumer, and small business bankruptcies. I have attended its annual convention each of the last three years, which provides 2 ½ days of information and continuing education, to keep me updated on the latest bankruptcy developments, and enables me to provide better service for you. I have also attended a two-day workshop and several additional hours of continuing bankruptcy education in the past couple of years.

James C. Reed, P.A. is a federally designated debt relief agency. We help people find relief from their financial problems, including, where appropriate, filing for relief under the bankruptcy code.

____________________________________________________________________________________

FINANCIAL NEWSLETTER - DEC. 2009

COMMON CAUSES OF FINANCIAL PROBLEMS:

Job layoffs, disability, injury, business failure, or other decrease in income.

Due to low paying jobs in Sussex County, your income may not be sufficient to pay your household expenses.

Increased mortgage payments, increased interest rates, or other increase in expenses.

Medical expenses contribute to 62% of all bankruptcies.

Exotic mortgages have caused a foreclosure crisis.

Overspending, overuse of credit cards.

Mortgage or car payments that are just too high.

You may be able to discharge debts in bankruptcy and keep everything that you own.

Find out about your options before you spend your savings. In Delaware, you can file a chapter 7 bankruptcy, and keep up to $50,000 worth of equity in your home, and $25,000 ($50,000 for a married couple) in personal property, without having to pay anything on your unsecured debts. If you have additional property, chapter 13 bankruptcy may be an option.

Mortgage Issues?

The best thing to do may be to contact your lender for a mortgage modification. Beware of anyone else trying to sell you modification assitance: you shouldn't have to pay.

Go to makinghomesaffordable.gov for assistance with Fannie Mae and Freddie Mac insured mortgages.

Check on state mortgage assistance programs.

Let your Congressman and U.S. Senators know if you can't get help.

Did you know that a chapter 13 bankrutpcy can save your home from foreclosure? You can stop the foreclosure up to the day of the Sheriff's Sale, but seek advice about this option as soon as the foreclosure starts, so that you can be prepared. You will have to resume your regular mortgage payments, and pay the arrears, usually over a five-year period.

FINANCIAL ASSESSMENT - Self test

-Unable to pay your bills as they become due?

-Is the total amount of your debt increasing?

-Are you only making minimum payments on credit card debt, or not paying at all?

-Do you have medical bills, repoed vehicles, large debts, or other debts that you are not paying?

-Are you behind on your car loan, rent or mortgage?

-Have you taken out title loans, or payday loans?

-Is your financial situation bad, and not improving?

-Are you living without a cash cushion, or any savings or funds for emergencies?

If you answered yes to any of the questions above, it may be time to explore your options by contacting my office.

BANKRUPTCY DEBT RELIEF is provided for in the U.S. Constitution, and has a biblical basis, Deuteronomy 15:1-2? If you need to take advantage of this option, it doesn't help you, or society, for you to continue to live in virtual slavery to your debt. You are entitled to relief, and a life.

If you are receiving HARASSING PHONE CALLS, you can write to each creditor and instruct them not to call you on the phone. Send the letter certified mail, return receipt requested.

If you think that you can manage to repay your debts, but need assistance, contact a reputable credit counseling company, like Consumer Credit Counseling: 800-642-2227. They may be able to lower some payments, resulting in one affordable single monthly payment.

If you had to use credit cards as a SAFETY NET to pay your expenses during a period of unemployment, lay off, reduced income, disability, or increased expenses (adjustable mortgage, increased credit card interest), it may be time to be realistic and accept that you can't pay the bills.

If you contacted my office and the passage of time has not improved your situation, it may be time to take a positive step toward financial recovery.

FOR DEBT RELIEF: Contact the law office of James C. Reed, P.A., (302) 227-2477

James C. Reed, P.A. is a federally designated debt relief agency. We help people find relief from their financial problems, including, where appropriate, filing for relief under the bankruptcy code.

Life is full of ups and downs, some are financial.

The following people had serious financial problems at one point in their lifetime:

Thomas Jefferson, 3^rd President of the United States

Abraham Lincoln, 16^th President of the United States

Ulysses S. Grant, General, U.S. President

Harry Truman, 35th President of the United States

Elliott Ness, FBI hero

William Penn, founder of Pennsylvania

John Wayne, Hollywood film legend

Willie Nelson, country music superstar

Doris Day, actress

Judy Garland, actress
Conrad Hilton, founded Hilton Hotels

Some had to file bankruptcy:

John Connally, 3-term governor of Texas, Treasury Secretary of the U.S., filed chapter 11 in 1987

George McGovern, Governor, U.S. Sen., Pres. candidate

Larry King, TV talk show star

Anna Nicole Smith, American supermodel

Marvin Gaye, musician and singer of "What's Going On"

Andy Gibb, 1970's rock star

Merle Haggard, country singer

M C Hammer, Grammy winning rapper

George Jones, country singer

Wayne Newton, Las Vegas superstar

Tammy Wynette, country singer

Samuel Clemons, aka Mark Twain, writer

Rembrandt van Rijn, painter of Mona Lisa

Frank Lloyd Wright, legendary architect

Gary Burghoff, Mash star "Radar"

Redd Foxx, comedian

Burt Reynolds, actor

Mickey Rooney, actor

Dorothy Hamill, Olympic ice skater

Joe Louis, Champion boxer

Sugar Ray Seales, Olympic boxer

Leon Spinks, Heavy weight champion of the world

Johnny Unitas, football star

Michael Tyson, heavyweight champion boxer

Melvin Belli, legendary injury lawyer

Walt Disney, founded Disney Co., Disney World

William Durant, created General Motors

James Folger, invented Folger's Coffee

Henry Ford, founded Ford Motor Co.

William Fox, founded 20^th Century Fox Film Corp.

Polo Guicci, fashion mogul

H. J. Heinz, founded Heinz Co.

Nelson Bunker Hunt, formerly World's richest man

Marvin Mitchelson, lawyer who invented palimony

WHAT OTHER CLIENTS HAVE SAID:

"My husband and I were clients of James Reed.... We found ourselves deeply in debt. [My husband] was making only 30% of what he had been making. Mr. Reed...was very knowledgeable, personable and honest about what was involved [in a bankruptcy]...he made us feel comfortable...and seemed to have a very genuine interest in our financial situation. Right away, we stopped paying our debts. The bankruptcy went just as he told us it would. Now we are debt-free...just what we needed to get a fresh start. I would recommend James C. Reed to my friends..." Jennifew W.

"You took the stigma and fear out of having to file for bankruptcy, right away, making it easy toproceed...the peace of not owing anyone is almost a tangible feeling. I would recommend you to anyone who is still hesitant to go through this process." Pat S.

KEEP YOUR EXPENSES UNDER CONTROL

An important step is to keep the three biggest expenses within a reasonable percentage of your NET income. Consider the following guidelines:

HOUSING 33-38%

Only 19.5- 25% of net income for your mortgage payments

TRANSPORTATION 15-19%

Only 5.7- 9.2% for car payments

FOOD 13-14%

If you spend more on these three biggest categories, then you will really have trouble paying for everything else. Spending the maximum on these three leaves only 29% for all of your other expenses.

BUDGET is not a four-letter word. Keeping track of your expenses and comparing it to your net income enables you to plan your spending.

Plan some recreation, enjoyment, vacation, etc.

Savings are critical. It you don't save something for unexpected expenses, it can break your budget. When you have provided for your current needs, there is always retirement to save for, or education for your children, or the new car.

Failing to plan (budget), is planning to fail.

"We didn't actually overspend our budget. The allocation simply fell short of our expenditures." Keith Davis.

"A bargain is something you can't use at a price you can't resist." Franklin Jones

James C. Reed, P.A.
6 Century Plaza, 19633 Blue Bird Lane, Suite 6
Rehoboth Beach, DE 19971
Phone: 302-727-0236
Toll Free: 888-844-1848
Map and Directions