Good times, Bad times - How Does Cashflow Fair?

In June, the Wall Street Journal reported that household debt decreased and Americans witnessed a slight increase of worth by 1.2%. Even while overall household debt seems to be decreasing, First Data Corp. reported that there has been a 6.8% increase in the use of credit for everyday purchases, especially among lower-income households. The higher costs of food and gas, for example, create a cash-flow problem for lower-income families due to stagnant wages, or even decreases many Americans have seen in wages. A comparison was done between cards that are actually debit versus credit, and consumers are actually using credit, not debit cards. More and more households live paycheck to paycheck, it seems. Analysts in some sectors believe the use of credit demonstrates an increase in consumer confidence and spending. However, First Data Corp. believes the usage is due to a lack of cash-flow, not a purposeful increase in spending or the use of credit due to the nature of purchases on credit, such as gas and food.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

FHA and the Making Home Affordable Program Assists Unemployed

Some good news for the unemployed: the FHA extended forbearance for long-term unemployed people so that they may avoid foreclosure. The FHA and the MHA (Making Home Affordable) programs are extending this relief to unemployed homeowners out of work for over 27 weeks. Two funds are working to assist homeowners. One if the “Hardest Hit Fund” offering $7.6 billion and the Emergency Homeowner Loan Program (EHLP) that offers $1 billion toward assisting the long-term unemployed.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Revisiting the Rumor Mill and Bankrutpcy Filing

Back in April, I made a post about rumors and reality in bankruptcy law. Because my everyday experience with clients shows me that the rumor mill persists, I thought I'd revisit this issue. Whenever the phone rings, people call with questions about their financial situation and potential relief they might find from filing bankruptcy. Inevitably, these calls include questions about "something" the caller heard from a relative, a friend, a co-worker about the bankrupcty process. Typically, the information is entirely eroneous!

If you have questions about bankruptcy, call our office for real answers that are based on the law, not on heresay from a friend who had a friend who...you get the picture!

We're here to dispell myths and rumors and give you the facts so that you may make decisions that make sense for your situation.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Bankruptcy Filings Decline Overall for 2011 as of June

Through the period ending June 30, 2011, consumer bankruptcy filings fell 8% from 2010. The American Bankruptcy Institute credits consumer concentration on debt reduction with the decrease in filings. While the first half of 2011 witnessed this overall decrease, bankruptcies in June increased 4%.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Credit Card Demand Falls

In the first quarter of 2011, the Federal Reserve found credit readily available with applications for credit cards being approved. However, applications decreased 3%. The Fed inquired about extensions of credit on active accounts, and those increased by 16%. It seems consumers are not applying for new accounts, but rather seek more credit access on accounts they already have.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

Consumer Bankruptcy Filings Decrease 16% in May 2011

According to the National Bankruptcy Research Center, bankruptcy filings are down 16% compared to May 2010. This finding is consistent with household debt falling over the past year, as well.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.

"Good News" about Medical Debt

House Bill 2086, the Medical Debt Responsibility Act of 2011, has been proposed in this legislative session. The bill would provide an opportunity for consumers to either pay or settle debt related to medical expenses and to have credit reports reflect the positive outcome within a forty-five (45) day period. This would make the debts appear current and/or paid on a credit report, whereas in the past, medical debts have remained on a credit report just like other consumer debt, for a period of up to seven (7) years.

There are rampant errors in medical billing and collections, which is recognized across the industry and in the credit rating arena. These issues negatively affect consumer credit scores as well as the cost of obtaining credit. Additionally, until these issues are settled, which, in the case of an accident, for example, might be years, a consumer's credit rating might be devastated. This of course, limits economic growth when lending is curtailed or made more expensive for consumers due to old, mistaken or otherwise settled medical debt. Supporters of the bill cite that medical debt is not usually related to credit-worthiness, thus it should not negatively affect borrowing capacity.

Disclaimer: This blog is for informational purposes only and does not establish a client-attorney relationship. Consult with an attorney before taking action on any information found herein as individual circumstances may affect the applicability of information provided. Call The Law Office of Michael Riley at 508-405-0831 with any questions.