Chicago Bankruptcy Attorney Addresses Financial Struggles Athletes Face

The tragic tale of American professional athletes rising from poverty to fame, only to squander their earnings and file bankruptcy after retiring is becoming all too common. Professional athletes in popular sports in America can make anywhere from hundreds of thousands of dollars to tens of millions. Although their playing careers are shorter than those of other professions, many of these athletes make enough money to last them the rest of their lives.

A report in 2009 from Sports Illustrated estimated that 78 percent of NFL players are either bankrupt or “facing serious financial stress” within two years of ending their playing careers, and 60 percent of NBA players are completely broke within 5 years of retirement.

“When a 21-year-old kid get such big numbers, they go out and buy the big house and the fancy car,” said Robert Luna of SureVest Capital Management in Phoenix. Luna has served as a financial advisor to professional athletes, such as Arizona Cardinals offensive lineman Levi Brown. “Before they know it, they are out of the league and their income drops significantly.”

Another problem is that because they are high-profile figures, athletes will have friends, relatives and organizations asking for money.

“All sorts of people and advisers start calling,” said Brown, who was a high-profile fifth overall draft selection in 2007. “In any business where you make a lot of money, there are people trying to get their hands on it.”

Young athletes should follow Brown’s lead and hire financial advisors. Please contact our firm for a free consultation if you are struggling with debt.

Benjamin Brand Services- Chicago bankruptcy lawyer .

Q&A with a Chicago Bankruptcy Attorney–Borrowing from a 401(k)

Q:      My wife and I are in our late 20s with a mortgage and almost $20,000 in student loan debt between the two of us. We each have 401(k) plans we have contributed to-should we cash one out to pay off student loan debts?

A:      It may be very tempting to cash out a 401(k) to pay off any debt, including student loans and mortgages, but it is probably not in your best interests for your long-term financial security. If you do withdraw money from the 401(k) early, you will have to pay a 10 percent penalty on whatever you withdraw in addition to your tax rate. Hypothetically, if you make more than $75,000 annually, you will pay your 25 percent tax rate in addition to the 10 percent penalty. If someone tried to get you to sign off on a loan at 35 percent interest to pay off the student loan, you would think that person was out of his mind.

People who have large student loan debt on top of other debt may want to look at bankruptcy get rid of dischargeable debt and focus on paying back the student loan debt, which is rarely dischargeable in bankruptcy. Contact or firm for more bankruptcy information .

Benjamin Brand Services- Chicago bankruptcy lawyer .

Chicago Bankruptcy Attorney Evaluates Options for Student Loan Debt

Student loan debt was been soaring for the last decade and a half, and many economic experts believe it could hinder a recovering economy. Student loan debt has increased by almost 500 percent since 1999, and in 2010 student loan debt in the United States surpassed credit card debt for the first time. Some analysts predict the total student loan debt in America to be in excess of $1 trillion.

Student loan debt is not dischargeable in bankruptcy unless the borrower can prove extreme hardship endured by the borrower. Exceptions are rare. Illinois Senator Dick Durbin has proposed some solutions to the possible pending crisis, including bankruptcy protection for borrowers of private student loans. U.S. Representative Hansen Clarke (D-MI) introduced the Student Loan Forgiveness Act of 2012, which would allow borrowers to receive partial loan forgiveness. Under this proposed act, debtors can pay 10 percent of their income to their loans for 10 years; after that, the rest of the debt can be forgiven. Even more forgiveness incentives are available to graduates who choose a career in public services, such as firefighters or teachers.

These are some interesting options for the looming student loan debt crisis. This is a problem that must be addressed, but borrowers should not count on being able to discharge student loan debt in bankruptcy. If you are struggling with debt you may want to consider bankruptcy to discharge other debts so you are able to pay back your student loans. Visit our website for more bankruptcy information .

Benjamin Brand Services- Chicago bankruptcy lawyer .

Chicago Bankruptcy Attorney Critical of Hostess’s Business Practices

Hostess Brands, Inc. filed a bankruptcy motion seeking permission to close business and sell its assets in a high profile case in November, which was accepted by the United States Bankruptcy Court for the Southern District of New York. However, the actions and financial decisions by Hostess executives have been brought to light and some former workers are not happy.

Many Hostess employees lost their entire pension while assets were being sold off, and it was recently revealed that the judge allowed Hostess to use $1.75 million to pay bonuses to 19 executives. The act didn’t necessarily violate any federal laws because Hostess didn’t take money out of employees pensions, but rather failed to put money into their pensions without telling them.

“It’s what lawyers call betrayal without remedy,” attorney James P. Baker told reporters-Baker is not involved in the Hostess case, but he specializes in employee benefits. “It’s sad, but that stuff does happen, unfortunately.”

Some of Hostess’ creditors accused the company of raising and manipulating the salaries of executives in an attempt get around bankruptcy laws. The real victims are the employees who lost their pensions and will be struggling through hard times as a result.

Please visit our site for more bankruptcy information .

Benjamin Brand Services- Chicago bankruptcy lawyer .

Chicago Bankruptcy Lawyer Reflects on Detroit Financial Crisis

Detroit has been in a financial slump for many years now, and the effects have been felt by public officials, business owners and certainly laid off workers. Some experts predict that Detroit may become the first major American metropolis to file a Chapter 9 municipal bankruptcy.

As Detroit has faced hundreds of millions of dollars in bills, the city has continued to cut back on public services. Detroit is battling claims and lawsuits from creditors, city worker unions and retirees. The repercussions are being felt throughout the city as there are fewer police officers and firefighters available.

It is possible that a federal bankruptcy judge could permit Detroit to renegotiate labor contracts or even nullify them.

“It’s a situation of ‘Be careful what you wish for,'” says John Pottow, a professor at the University of Michigan Law School. “The judges are much more involved. They’re reflecting an amenability to serious labor cuts, and I think that’s surprising to a lot of people who didn’t think they’d do much in bankruptcy. We are in a new era of Chapter 9 and using it in new ways. It’s an unknown, uncharted and unpredictable process.”

These cuts to unions and other programs may cause Detroit citizens to struggle with their own debt as government programs they rely on dry up. Please visit our site for more bankruptcy information .

Benjamin Brand Services- Chicago bankruptcy attorney .

Chicago Bankruptcy Attorney Weighs In on Looming Fiscal Cliff

As Congress and President Barack Obama continue to negotiate offers to prevent falling off the “fiscal cliff” before the end of the year, legislators are beginning to grow impatient. The metaphorical “fiscal cliff” is an anticipated financial crunch expected to occur as the Bush tax cuts expire, government spending cuts are implemented and payroll taxes increase all at the same time. President Obama has refused to accept any deal from Republicans that will extend tax cuts for the wealthiest Americans.

“I think we’re going over the cliff,” says Senator Lindsey Graham (R-S.C.).”This offer doesn’t remotely deal with entitlement reform in a way to save Medicare, Medicaid and Social Security from imminent bankruptcy

. It raises $1.6 trillion on job creators that will destroy the economy and there are no spending controls.”

Experts may never agree on how they think the expiring tax cuts may help or hurt our economy in the long run, but in the short term it appears many Americans will be tightening their belts for a while. If you have been struggling with debt, it may be a good time to explore your options. Contact our firm for a free consultation.

Benjamin Brand Services- Chicago bankruptcy lawyer .

Chicago Bankruptcy Lawyer Supports Senator-Elect Warren

Early reports indicate that Massachusetts Senator-Elect Elizabeth Warren is expected to be granted a seat on the Senate Banking Committee. Warren, a Harvard bankruptcy professor, is a consumer advocate who is has consistently been outspoken about big banks’ and credit card companies’ exploitative tactics.

If appointed, Warren will have a hand in re-writing the Dodd-Frank Act as well as other significant financial legislation pieces. A final decision on the Senate Banking Committee appointments will not be made until the new session of Congress convenes.

“We certainly plan to reach out to Senator-Elect Warren,” said James Ballentine, executive vice president of congressional relations and political affairs at the American Bankers Association. “That outreach will stretch beyond Dodd-Frank reforms, which is the corner many will try to paint her into.”

It is great that a consumer advocate like Senator-Elect Warren will be appointed to such a prestigious position. Her experience and passion for fighting for the middle class will be a fresh of breath air for Congress.

Please visit our site for more bankruptcy information , and contact our firm for a free consultation.

Benjamin Brand Services- Chicago bankruptcy attorney .

Chicago Bankruptcy Lawyer Warns of Tax Complications After Filing

If a person files bankruptcy, hopefully it is a once-in-a-lifetime experience. Therefore, the process is often intimidating as people have no previous experience with a personal bankruptcy. Lots of people are not sure how filing their personal income tax returns will change after filing a bankruptcy and what they need to claim and what they do not.

According to IRS Publication 908, Bankruptcy Tax Guide, the Bankruptcy Code requires anyone who files bankruptcy to file all tax returns, or at least file for an extension. If you have already filed bankruptcy, you will also need to file an estate tax return, or Form 1041.

“Taxpayers who have made the filing for a bankruptcy and are still currently in the process usually make the mistake of filing their tax return as they normally would,” says Joshua S. Barger, vice president of tax services for Foundation Financial Group. “This is not the process that should be taken.”

Tax laws differ depending on whether you filed a Chapter 13 or Chapter 7 bankruptcy . If you have filed bankruptcy or are considering doing so, please contact our firm for a free consultation.

Benjamin Brand Services- Chicago bankruptcy attorney .

Chicago Bankruptcy Attorney Appalled at Creditor Harassment

Creditors are notorious for their borderline harassing collection methods, particularly the big banks. The lengths that some of these banks go to collect is often unethical and sometimes illegal. One individual went through a particularly outrageous nightmare with Bank of America after his mother passed away, and he told his story to Consumerist.com.

Matt, who is still a college student, had to deal with the devastating loss of his mother on October 1. After she passed, Matt went through the process of notifying credit card companies, utilities, etc., while still grieving. Matt had to call Bank of America regarding his mother’s mortgage, which proved to be much more difficult than one would expect.

“The first call ended after the associate we are speaking to told us that the only person they could talk to was the person who was listed on the mortgage:  my mother,” Matt said. “Since she was deceased, that’s obviously not possible, so we explained ‘death’ to the person we were speaking to. They said they had to talk to my mother, we decided it was hopeless, and gave up.”

Matt sent in a copy of the death certificate, but continued to get daily harassing phone calls approximately once per hour. Matt told the Consumerist he sent the certificate in a total of six times and the calls continued for eight weeks.

It is outrageous that a young man had to deal with this creditor harassment while worrying about his school work and grieving his mother’s death. Please contact our firm for more bankruptcy information if you are being harassed by creditors.

Benjamin Brand Services- Chicago bankruptcy attorney .

Chicago Bankruptcy Attorney Weighs in On Decreased Filings

One particular region in Ohio has seen a sharp decline in the filings of personal bankruptcies, according to the Dayton Daily News. Throughout the first half of 2012 personal bankruptcies in the Dayton, Ohio region fell to 3,265-a 13 percent decline in a region that was hit hard by the recession. From 2006 to 2010, bankruptcy filings in the area increased in the first half of the year every year. Many experts are divided on what this exactly means about the economic climate of the region.

“Fewer people are working right now, so you aren’t going to have as many wage garnishments if there aren’t that many wages,” says Russ Cope, a bankruptcy attorney in Centerville. “There is no point in filing bankruptcy unless you absolutely need to, and right now, many people are uncollectable.”

The driving force behind people filing for bankruptcy is debt, so when the recession hit, fewer people had access to credit than before. This could be one part of why filings are down, particularly in the Rust Belt, where the recession hit hard.

“Oddly, bankruptcy goes up when the economy is doing well and people are spending freely on credit,” said Jean Braucher, a professor at the University of Arizona and Vice President of the National Consumer Bankruptcy Center. “People can then suffer reverses, such as job loss or divorce or uninsured illness, but once they recover from the setback, they can use bankruptcy to shed debt they took on during a bad patch.”

Please contact our firm for a free consultation if you find yourself struggling with debt.

Benjamin Brand Services- Chicago bankruptcy lawyers.

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