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Debunking 3 Myths About Bankruptcy Designed to Terrify You

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Every parent who is worth their Dora the Explorer purchases knows that, sometimes, it’s necessary to bend the truth when dealing with their kids.

For example, while it would be ideal for kids to grasp that going to bed vs. staying up to watch TV is best for their health and long-term growth and development, a more pragmatic route typically involves conjuring up a monster of some sort who goes from house to house in search of kids who stay up past their bedtime. Is this lying? Yes. Does it work? Yes!

However, there are other myths that aren’t fundamentally ethical. Instead of pointing (okay, manipulating) people towards making smart choices that are best for them, these myths are designed to mislead and ultimately harm people. And in the grown-up world, there isn’t a better — or make that worse — example of this then when it comes to terrifying bankruptcy myths.

Here’s the thing: the fundamental purpose of bankruptcy law is not to punish debtors who can’t pay some, most, or maybe all of their bills. This isn’t the 1800s, and debtors’ prisons don’t exist anymore. Rather, the point of bankruptcy law is to provide debtors with legal protections so they can, eventually, restore their financial health. In other words, it’s not in society’s best interest for debtors to sink deeper and deeper in debt.

And so, if society doesn’t have it in for debtors, who or what is behind the scary bankruptcy myths that we’ll debunk in a moment? Why, creditors of course! They don’t want individuals and businesses that owe them money to file for bankruptcy, because once that happens creditors must immediately cease all communications and collection activity (e.g. lawsuits, wage garnishment, etc.).

What’s more — and far more egregiously to creditors — they must stand in line beside all other creditors and wait their turn to (in most cases) get a fraction of what they’re owed. Creditors hate that. They’d much rather intimidate and exhaust debtors into paying all or most of their overdue bill. In this respect, and quite strangely, the biggest threat for creditors doesn’t come from debtors. It comes from other creditors who also want a piece of the pie.

And so, now that you know that creditors are behind the horror story of bankruptcy, let’s look at three myths that many of them tell debtors, so they can get their money as quickly as possible and run away:

Myth: Very few people qualify for bankruptcy so you shouldn’t even bother.

Truth: Virtually anyone who passes their state’s respect means test can file for Chapter 7 bankruptcy protection. And if they do not pass the means test (because of a relatively higher income level), they can still almost certainly file for either Chapter 13 or Chapter 11 bankruptcy.

Myth: If you file for bankruptcy then you’ll lose everything.

Truth: Chapter 7, Chapter 11, and Chapter 13 all provide for exemptions that may allow debtors to keep assets, such as their primary residence, some personal items, and registered retirement funds. For Chapter 11 and Chapter 13 filings, debtors will be able to keep their car provided that they make timely payments during the reorganization plan.

Myth:  Filing for bankruptcy will permanently destroy your credit score.

Truth: Filing for bankruptcy will result in a significant credit score hit (the exact amount depends on the credit score at the time of filing — the higher the initial credit score, the larger the hit). However, it will not permanently destroy your credit score. You can apply for secured credit cards immediately after discharge, and within a few months you’ll be eligible for conventional credit cards— albeit at a pricey interest rate. Provided that you make full payment (not just the interest!), then your credit score will start to rise, and within about a year or so after discharge you can apply for a conventional credit card. After a couple of years, you can apply for a conventional mortgage, and then you’re fully back in the game. Chances are your credit score within a few years of bankruptcy will be higher than before you files, because you’ll have much better earning, spending and saving habits.

To learn more about bankruptcy facts — and just as importantly to learn more about bankruptcy myths — then check out the blog at charleshuberlaw.com. There are hundreds of easy-to-read articles on everything from how to file for bankruptcy, to how to deal with aggressive creditors, and more. Simply put, it’s the blog that creditors don’t want you to read!

Ways Scammers Trick You Out Of Your Money

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Ever since the inception of the internet, cybercrime has become a vastly lucrative business for hackers, bots and other nefarious online criminals. This is even in spite all the advancements made in security like biometrics, and promising payment trends such as the blockchain. Not even all the money in the world from billionaire Dmitry Rybolovlev can prevent such attacks. And that’s exactly why we have to be more vigilant about these schemes so that we can prevent it before it happens.

1. Free Trial Offer

There isn’t a moment in our online surfing lives where we aren’t blasted with a free trial offer. They can come in the form of antivirus programs, weight-loss programs, internet connectivity and so much more. But the word “free” always comes with a certain catch – you only have to pay for the shipping and the handling, which could be in a low price of $5.95.

But sadly, there’s a fine print that usually slip by the eyes of many – it could be because it’s in a color that blends into the background. These fine prints usually state that consumers are required to pay expensive monthly fees. Next thing you know, the $5.95 would then cost $99 per month once the free trial expires.

2. Phishing Scams

This has to be one of the oldest and some of the most prevalent scams there are today. These scams are when cybercriminals install malicious software onto your device after a user clicks on a link that they had received in an email or social message. This is done to trick users into sharing the login credentials of their bank account, work account, social account, or cloud storage provider. They can also steal your frequent flyer miles or health insurance.

3. Wi-Fi Danger Zone

We’ve all been to public places like the airport and the coffee shop, and willingly log into the local Wi-Fi zone. This login page resembles a free service or a pay service such as Boingo Wireless, and seems to be legit, so you join the network.

However, in some cases, there maybe a crook who’s actually mining your computer for your credit card, ebank, and other personal information. And that is why regtech is very crucial for financial institutions to implement.

4. In The Name Of Love

With a fair amount of people looking for love online, it only makes sense for scammers to use this as a way to scam unsuspecting people. As stated by the Federal Trade Commission, scammers create fake online profiles using photos of other people – even if they’re stolen pictures from actual military personnel. Then they would profess their love and then you a sob story that can only be resolved by sending them money.

5. Your Computer Is Infected

This one’s another timeless classic. You’re doing your usual online browsing until all of a sudden, a popup in what appears to be a legitimate-looking and sounding antivirus program shows up in front of you. It informs you straight up that your computer is infected and that t urges you to download its software in order to disinfect it. Moved by this, you click the link and now the malicious software is scanning your computer for login information.

In some cases the software offers to scan your computer for a fee, but of course, this doesn’t happen. Instead, the cybercriminal now has your credit card information.

6. Ransomware

As the name suggests, ransomware is a form of malware, that works by either holding your computer hostage or by blocking access to all of your computer’s files by encrypting them. People whose computer is infected with ransomware is typically ordered (through a pop-in window) to pay anything between a few hundred dollars to a few thousand dollars in order to get the key that unlocks their encrypted data.

Saving for the Long Term

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With 2019 in full swing, New Year’s Resolutions germinate in the minds of people everywhere. These resolutions run the gamut — everything from physical health and mindfulness, to personal relationships, professional aspirations and money top the dockets of hope that only a New Year can bring.

According to Statista, people had their priorities straight in 2018 (at least, when they made the commitment). Eating healthier, getting more exercise and saving more money each tallied 37 percent of answers in the multiple-response survey.

Assuming 2019 is anything like 2018, let’s discuss how people can save more money, specifically to meet long-term goals and needs.

Understand Daily Spending

Daily spending must be understood before a plan can be created to aid long-term saving. After all, it’s usually the fleeting day-to-day purchases we can’t remember that alter our financial trajectory the most. It’s not like we’re getting any tangible benefit from them, either.

So, what do you spend your money on in a given day? What’s necessary and what’s a result of indecision or poor planning? Once you understand all the little purchases you could go without, and how much they add up to each month, you can start to see the extra money you could be pocketing.

An important side effect of this exercise is that tracking daily spending also helps us understand the things we do value. With this compass of essential and unnecessary, we can be more mindful in each transaction and avoid wasted purchases.

Trim Your Monthly Expenses

With a firm understanding of the purchases that are bleeding your bottom line dry, you may be more motivated to change certain aspects of your lifestyle. Maybe you’ve found you that the majority of your (high) food bill is dining out, but you’ve realized that you don’t really take joy in buying every meal.

The issue is a lack of preparedness, and meal planning solves it. Digesting your month-to-month spending will illustrate other inefficiencies in your life. Maybe your student loans comprise way too much of your after-tax income or your utility costs seem to leave a bigger dent in your budget than they should. Perhaps you see subscriptions you’re not using or underusing—or, after looking through loan statements, realize just how much in monthly interest you’re paying. Whatever sunk costs you happen upon, use this time to trim the excess fat.

For media, consolidate similar services and leverage any free offerings. For example, Spotify offers an ad-free desktop player, and ad-supported mobile phone access. Netflix or Hulu is a fraction of cable television. And since so many Americans have Prime memberships (or someone in their household that does) don’t sleep on Prime Music and Video. If you have federal student loans, you can apply for an income-driven student loan plan each year, potentially even being forgiven for some of your loans. Though roughly one-quarter of borrowers with federal loans are on income-driven plans, plenty more whom are eligible are not taking advantage.

Define Your Savings Goals and Time Increments

The only things long-term savings goals have in common are that they require time and ongoing effort to achieve. Without a clear goal of what you’re saving toward, it’ll be hard to save consistently and evaluate your progress. Is your goal to buy a house, start a business, help kids pay for college, plan for retirement?

Whatever it may be, envisioning what your savings goals are and then breaking down the steps required to get there continually breed success, according to financial entrepreneur and thought leader Andrew Housser. Be realistic but firm about your what your specific goals and dollar amounts are, as well as how long it’ll take you to get there with consistent saving.

Choose the Budgeting Strategy that Suits Your Lifestyle

Now to the fun (or maddening) part. Armed with a newfound clarity of your financial behavior and freshly engaged in long-term aspirations, it’s time to pick a budgeting strategy that will keep you on track. If you really want to let your money empower you, opt for the zero-sum budget.

In a zero-sum budget, every dollar has a specific function. This is done by using your previous month’s income to pay for your current month of expenses. Doing so forces you to build a savings cushion, and makes it easy to allocate every last dollar across your needs.

If that’s a little too hands-on for you, the 80/20 budget stresses that 20 percent of income be spent on savings, and 80 percent on ‘everything else.’ But this might be going a step backward following the above exercises. In this case, the 50/30/20 budget breaks things down a bit more; recommending that half of after-tax income be spent on needs, 30 percent on wants, and 20 percent on debt repayments and savings. Of course, these percentages are starting points. In the case of debt and savings, they’re minimums. Set your ratios dependent on your current savings, future goals and projected expenses and savings rates.

Saving for the long-term is no easy task, but achieving success is remarkably simple at the core. Understand where your money goes; develop mindfulness and purpose in how your money serves you; envision and commit to future goals; and tie it all together with a plan you can follow. Good luck!

What You Need To Know If Your Social Security Card Is Lost Or Stolen

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A lost social security card can be an alarming and upsetting event. Your social security card and number are used as a sort of identification process that helps you to engage in legitimate financial endeavors such as obtaining a bank account or applying for a loan, applying for a job, or filing for taxes. Your social security number is how the government helps keep track of your legal activities, and while there are plenty of alternatives for you if your card is lost or stolen, you can – and should – replace a lost social security card as soon as possible.

What A Stolen Number Might Mean

It might be momentarily vexing as to what someone might want with your lost or stolen social security card. However it’s important to remember that your social security number is perhaps the best key when it comes to identity theft. While there are a plethora of alternative identification numbers offered, your missing card might be a good warning sign to watch your finances and other legal ties with a much keener eye than normal.

Apply For A Replacement

The process to apply for a replacement card is relatively simple. The official social security website (www.ssa.gov) offers two application routes: online and hard copy. You can choose the route that fits you best. Some businesses might offer cards for a fee, but Social Security provides the service – among others – for free.

Applying Online

By signing up for a my Social Security account, you can easily start to process to apply online for a replacement social security card. If you are a U.S. citizen age 18 or older with a U.S. mailing address (which is including APO, FPO, and DPO addresses), are not requesting a name change or any other change to your card, and have a driver’s license or state-issued identification card from one of the many participating states or the District of Columbia then you’re in good shape to use the online application process. While Social Security services are working to expand this service, there are a few hangups still – like the fact that Delaware and Wisconsin require a driver’s license to take advantage of this option rather than offering the option of an identification card. You can not use the online application process if your driver’s license or identification card was issued by a U.S. territory (American Samoa, Guam, Northern Mariana Islands, Puerto Rico, or the U.S. Virgin Islands) or one of the following states:

  • Alabama
  • Alaska
  • Connecticut
  • Georgia
  • Hawaii
  • Kansas
  • Minnesota
  • Nevada
  • New Hampshire
  • New Jersey
  • North Carolina
  • Ohio
  • Oklahoma
  • Oregon
  • South Carolina
  • Tennessee
  • Utah
  • West Virgina

Applying The Old Fashioned Way

Of course, you may want to lean towards more tried and true methods of applying for a replacement social security card.

  1. Collect Your Documents

Documents will vary based on whether you’re a U.S. Born Citizen, a Foreign Born U.S. citizen, or a noncitizen and on whether the replacement card is for an adult or a child. A noncitizen must provide proof of U.S. immigration status such as a Lawful Permanent Resident card or a Employment Authorization Document, proof of work or student eligibility, and a current DHS document as proof of identification.

On the other hand, both adult and child citizens – whether foreign born or U.S. born – will need to present proof of citizenship such as a passport or a birth certificate and a proof of identity like a U.S. driver’s license, state-issued non-driver identification card, or U.S. passport. Your proof of identity must be current and unexpired, and show your full name, identifying information such as your age or date of birth, and a recent photograph. If you do not have one of those items for proof of identity then you may present an employee identification card, a school identification card, a health insurance card that is not a Medicare card, or a U.S. military identification card provided that its recent or unexpired, shows your name, identifying information such as a date of birth or age, and a recent photograph. One document, such as a U.S. passport, may be used as both proof of citizenship and identity.

All of the documents you submit must either be the original documents or copies of the originals. Photocopies or notarized copies of documents will not be accepted. You can get a certified copy of a document that shows a birth, marriage or divorce that took place in the United States. If you’re filing on behalf of another person, you’ll be expected to provide evidence of your relationship to or responsibility for that individual as well as providing proof of your identity.

  1. Fill Out An Application

You can find the correct application through the Social Security website with relative ease. The application is straight forward and requires information such as your name, age, date of birth, and some familial information like the social security numbers of the applicant’s mother and father. The application is about four pages in total, comprising of three pages of important information and only one page that needs to be filled out by the applicant.

  1. Send or Take To The Office

You can send your application by mail to your local social security office or take it in yourself if you have the time. Either way, the social security website makes it easy to locate an office or get in touch with them through a toll free number. Ultimately, the Social Security Administration wants to make it easy for you to replace a lost social security card.

Are You Teaching your Kids the Wrong Things About Money?

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Life would be a lot easier if the teachers in your child’s school taught them about budgeting, taxes and even forms of credit, instead of focusing on the lessons they never needed to learn. Unfortunately, financial classes still aren’t a part of the curriculum, and that means that parents and guardians are the ones left to make sure that their children know how to manage their cash.

The sometimes-shocking truth is that even if you think that you’re not teaching your children anything about money, you’re probably having an impact that you haven’t noticed. Every time you ignore a bill or pay with something you can’t afford using a credit card, your kids are learning from your behavior. Are you teaching them the right lessons?

Bad Lesson 1: Someone Else Will Bail Them Out

Do you give your children a weekly allowance? If so, there’s probably been a few times when they’ve spent all of their money immediately, then regretted it as soon as their friend has invited to them to the movies or asked them to do something that costs money. While it’s tempting to give your kids everything they want, it’s also not great to teach them that if they make a mistake with their money, someone else will come along and give them more. Instead, let them mull over the decisions that they’ve made and learn from their mistakes – no matter how tough it is.

Bad Lesson 2: Bills Can be Put on Hold

If every time you receive a bill in the post, you throw it somewhere else, or let it sit around until the last minute, your kids are going to have a hard time understanding why you can’t just blow off paying for your car insurance one month and buy them a toy instead. Make an effort to show your children that you’re committed to paying crucial expenses on time every month. You can even sit them down with you while you go through the budget so that they can see just how many crucial costs you have to deal with. That way, they’re more likely to understand when you tell them that you don’t have any money left for treats.

Bad Lesson 3: Someone Else Can Pay

Ideally, if you and your spouse live together, you’ll split the living expenses between you, so that you both have some cash left over to spend on yourself. However, if you end up spending all of your cash straight away and start asking your spouse to buy you the things that you want instead, your kids will learn that they just need to get someone else to pay for what they want too. By being responsible with your own money, you teach your children that they’re in charge of their own financial security. This will lead to greater independence in the future.

Bad Lesson 4: Plastic Works when Cash Isn’t Available

Do you frequently turn to your credit card when you don’t have enough money left over? If so, this is teaching your children that they can still get whatever they want whenever they want it, as long as they have a card handy. Your children don’t understand that you’re going to need to pay more money for the convenience of using your credit card later. If your children are too young to understand how things like banking and credit cards work, then it’s best to avoid using credit cards in front of them. If they are old enough to understand, try showing them how your credit card bills add up at the end of the month, and why it’s not a good idea to rely on them for all of your expenses.

Bad Lesson 5: You Don’t Need to Talk about Money

If you’re always reluctant to talk about cash in front of your children, then how can they understand how important it is? While it’s difficult to discuss something as complicated as cash with younger children, it’s a good idea to keep them in the loop as much as you can. The more open you are about money, your expenses, and how much cash you have to spend each month, the easier it will be for them to understand why you need to shop around for the best prices, and why it’s so important to save for the future.

Bad Lesson 6: Impulse Purchases are Fine

Finally, while treating your kids to a last-minute candy bar can seem like a good idea at times, it also teaches them that spending doesn’t have to be planned. Instead, show your children why you can afford to get them that treat. Perhaps you saved a little extra on an item that was on special. That way, your children will see how everything adds up.

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