My Blog

Category: Industry News

  • Tax Relief Scams

    Optima Tax Relief have published a great article about tax relief scams on their blog. We thought we’d write a follow up.

    Because the IRS is increasing enforcement to unprecedented levels, there’s been an increase in the number of unethical tax resolution scams preying on people who owe back taxes. This year we’ve already seen rising numbers of consumer complaints about tax resolution scams. In tough economic times, it’s especially important to not ignore IRS problems. Taxpayers must realize that they have to be careful when choosing a tax relief professional to resolve their back taxes and IRS problems.

    We highly recommend you review the article from Optima Tax Relief to find out ways you can help protect yourself from the bad guys.

    Tax relief, like debt relief, is an industry plagued by unscrupulous characters looking to make a quick buck. We at Debtmerica pride ourselves for being one of the leading FTC compliant firms. Our clients have always come first, which has been ingrained in our team at Debtmerica.

  • Financial reform almost caused rewrite of bankruptcy law

    Financial reform almost caused rewrite of bankruptcy law. A proposal backed by advocates for homeowners as well as many leading Democrats nearly force the country’s bankruptcy laws to be completely rewritten.

    A potential change to bankruptcy law, known as a “mortgagecramdown,” would have allowed judges to change the terms of mortgages for distressed homeowners who wound up in bankruptcy court, according to a Reuters report. The change was being opposed by the banking industry and Republicans. Under current law, bankruptcy courts can alter or reduce many kinds of debt for struggling borrowers – including loans on cars and boats, a vacation home or family farm – but not primary residences.

    Reuters said that proponents of the bill, a measure that was passed by the House in March 2009 but was killed in the Senate, said it would help stop home foreclosures in the U.S. Opponents argued that it would raise costs for all homeowners.

    A report from the financial news and advice website The Motley Fool said that several banks supported the bill as well, saying that if homeowners are able to modify their mortgages after filing for bankruptcy, the number of strategic defaults will dramatically decrease.

  • How to keep a car when filing for bankruptcy

    How to keep a car when filing for bankruptcy. When many consumers file for bankruptcy, one of their primary concerns is whether or not they will be able to keep their car.

    The answer is a bit complicated, but one way for consumers who have filed for Chapter 7 bankruptcy to ensure that they get to keep their vehicle is to sign an agreement with their lender that states they will repay all or a portion of a loan that would have otherwise been discharged in the filing. The financial news website Bankrate said that most lenders require consumers who have filed for bankruptcy to sign such an agreement. They are also required for any other asset or possession the consumer would like to keep through their bankruptcy proceedings.

    Bankrate said that even if lenders accept monthly payments throughout bankruptcy proceedings without requiring such an agreement, any money put toward the loan after the filing is settled may not show up as positives on a credit report.

    New York bankruptcy attorney Jay Fleischman also advises consumers that their vehicle may actually be exempt from Chapter 7 bankruptcy proceedings. Any vehicle with a value lower than $2,400 above an outstanding loan does not have to be part of the bankruptcy.

  • BEA: State personal income declines in 2009

    State personal income declined in 2009 Spurred by an economy in turmoil and a drop in personal income that led many to take on increased debt consolidation methods, new data released Thursday by the U.S. Bureau of Economic Analysis has found that state personal income took a nosedive and declined by 1.7 percent in across the country in 2009.

    Declines in personal income were recorded in 44 states and Washington D.C., with Nevada experiencing the second worst annual decline recorded since 1969 with a drop of 4.8 percent. The notable decline was attributed mainly to the state’s struggling construction and accommodation industries.

    Wyoming had the second largest decline in state personal income with a 3.9 percent decline, led primarily by in-state employment issues relating to its mining and construction industries.

    Six states managed to see annual gains in their personal income – which the BEA defines as “the sum of net earnings by place of residence, property income, and personal current transfer receipts.” West Virginia saw the most growth with a 2.1 percent improvement over the course of the year.

    The BEA also found that per-capita personal income – defined as personal income divided by population – also declined in 2009 with a 2.6 percent drop nationally. The decline differed drastically from the 2.0 percent gain seen in 2008, and was attributable to states such as Wyoming that saw its per-capita income slide the most with a 5.9 percent decline.

  • Mortgage rates remain unstable midway through March, says Bankrate

    Mortgage rates remained stable for the week, according to Bankrate Mortgage rates had an unstable week as the threat of increased volatility loomed in the market, perhaps leading some homeowners looking to consolidate debt through mortgage refinancing to hold off for the time being.

    According to Bankrate’s latest weekly mortgage survey for the week ending March 17, the average interest rate for 30-year fixed-rate mortgages showed slight improvements as it decreased 0.01 percentage points to 5.07 percent. One week earlier, the rate had undergone a 0.04 percentage point drop.

    “While the Federal Reserve is maintaining the pledge to keep short-term interest rates “exceptionally low” for “an extended period,” this doesn’t necessarily dictate what happens with fixed mortgage rates,” the weekly report read, before adding that the ending of the Fed’s program of buying mortgage-backed securities this month would have a more profound effect on rates.

    “With the Fed no longer serving as the dominant buyer of mortgage securities, the days of low volatility appear numbered,” it added.

    The average rate for 5-year adjustable-rate mortgages had a similar week, decreasing 0.01 percentage points to 4.46 percent. While not a large decline, it was enough to offset the 0.01 percentage point increase seen one week earlier.

    Fifteen-year FRMs had the toughest week of all mortgage types as its average rate increased by 0.02 percentage points to 4.45 percent. The week prior had been much better for the mortgage type, as its average rate had seen a 0.03 percentage point decrease.

  • Vermont sees heavy employment declines in industrial jobs during recession

    Vermont's industrial sector has struggled during the recession Vermont is one of many states to see its employment figures in industrial sectors suffer mightily over the course of the recession, according to a new survey that found the state has lost 2,894 manufacturing jobs since December 2007.

    According to the 2010 Vermont Manufacturers Register released Monday by the Manufacturers’ News Inc., manufacturing jobs across the state have declined by 5.6 percent since the beginning of the recession in December 2007.

    Broken down further the survey found that after shedding 1,197 jobs between December 2008 and 2009, the number increased to 1,697 jobs lost between December 2008 and December 2009.

    The survey also found that jobs in the furniture/fixtures sector experienced the sharpest declines throughout the state, declining 33.4 percent during the recession. The loss was attributed mainly to layoffs at Ethan Allen.

    Job loss in Vermont was not limited to only the manufacturing industry. Transportation equipment production-related employment fell by 15.4 percent and lumber/wood employment dropped 10 percent were an example of the numerous sectors that saw a loss.

    Paper products (2.8 percent), rubber/plastics (2 percent), and fabricated metals (1.8 percent) were the only sectors to see increases in employment.

  • Bankruptcies hit new high point in 2009

    Bankruptcy's rose in 2009 In a very telling example of how Americans fared throughout 2009 as many sought to consolidate debt amid the Great Recession, consumers’ bankruptcies soared to their highest rate since 2005.

    According to data filed by both the American Bankruptcy Institute, consumer bankruptcies totaled 1.4 million by the end of 2009. The figure was noticeably higher than the 1.06 million bankruptcies counted by the institute in 2008.

    The rise in bankruptcies also marked the fourth consecutive year that the figure has increased since the Abuse Prevention and Consumer Protection Act was enacted in 2005.

    “A combination of economic stress, including high debt loads, rising unemployment and unsustainable mortgage burdens, left many consumers with little choice but to seek the financial relief of bankruptcy,” said ABI Executive Director Samuel J. Gerdano. “As these strains continue for U.S. households, we expect that consumer filings will rise still higher in 2010.”

    According to CrediCards.com, the state with the highest per-capita rate of bankruptcy filings in 2009 was Nevada, which had more than 11 filings out of every 1,000 residents. Tennessee came in a distant second with more than 8 filings per 1,000.

    Arizona saw the greatest increase in bankruptcy filings from year-to-year, as their figure spiked up by 77 percent from 2008 to 2009.

  • Bank of America and Chase adjust handling of overdraft fees

    Bank of America and JPMorgan Chase has announced that they will both be adjusting the way their debit card programs handle overdraft fees by allowing the opting out of overdraft protection and adjusting how charges are credited.

    News of the adjustments will likely be welcomed by those looking to consolidate debt that may have been caused by paying steep fees when their accounts have been overdrawn.

    Beginning October 19, Bank of America will cease charging overdraft fees for customers who overdraw their account by less than $10, impose a limit of four overdraft fees per day and allow customer to opt out of overdraft protection and not allow any charges to go on the card once it reaches its balance.

    “We made the decision that we had to help customers now and help those most stretched by the economy,” Brian Moynihan, the president of Bank of America’s consumer and small-business banking operations, told the New York Times.

    Chase will impose similar changes, not charging fees for accounts overdrawn by less than five dollars and capping the amount of fees per day at three. By the end of Q1 2010 the bank will also stop lumping transactions for one day together and processing the highest charges first.

    Upon hearing of the changes made by the banks, House Financial Services Committee Chairman Barney Frank of Massachusetts was pleased with the move and hoped that change would confirm to other banks that “it’s doable.”

    “No one else will be able to argue that it’s too burdensome,” he added, according to the Wall Street Journal.