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 .

Q&A With A Chicago Bankruptcy Attorney

Q:         I recently lost my job, and my wife has been out of work for almost a year. I believe I may need to file for bankruptcy , but I am worried about losing my home and vehicles. Is it possible to file for bankruptcy and keep both?

A:     Great question-these are common questions for people that are considering filing bankruptcy. There are two different types of consumer bankruptcies-a Chapter 7 and a Chapter 13.

In a Chapter 13 bankruptcy, you will organize a plan to repay some of your debts. You and your creditors will agree to a “financial reorganization,” which is supervised by a bankruptcy court. A Chapter 7 bankruptcy , on the other hand, is when an individual liquidates non-exempt assets to repay creditors. A Chapter 13 will allow you to keep your car and house, although both types will stop a foreclosure.

A Chapter 13 bankruptcy can protect your house and car, but you need steady income. A Chapter 7 will wipe out your debt, but you may need to surrender you house, your car or both.

Bankruptcies are different for each individual and family, seeing as how everyone has different circumstances and financial obligation. Please contact our firm for a free consultation if you are struggling with debt.

Benjamin Brand Services- Chicago bankruptcy lawyer .

Breaking Down Chicago Bankruptcy: Is Filing Your Best Option?

Individuals who are struggling to pay off debt have difficult decisions to make on a daily basis. If you do not earn enough income to pay off your debt and continue to pay your rent or mortgage on top of other bills and expenses, chances are you have to learn to go without luxuries, and maybe even necessities. Filing for a Chapter 7 or Chapter 13 bankruptcy may allow you to regain control of your finances and your life. However, it is not a decision that should be made lightly, and there are many aspects to consider. Lets run through some pros and cons of filing a personal bankruptcy:

                Pros:

  • Will provide virtually instant debt relief
  • Will end intrusive phone calls and creditor harassment
  • Provide you with time and the ability to reorganize and pay back the debt you are able to

 

Cons:

  • You take a hit on your credit-the bankruptcy will remain on your credit history for 10 years
  • You will have difficulty getting a loan until you are able to re-establish your credit
  • Many employers run a credit check on prospective employees they interview

 

Individuals should take all these points into consideration when deciding whether or not to file, bu the first step is to contact an experienced bankruptcy attorney to discuss your options, every case is different. Please contact our office for a free consultation.

Benjamin Brand Services- Chicago bankruptcy lawyer .

Bankruptcy Filings Down in 2012; Chicago Bankruptcy Attorney Hopes it is Sign of Improving Economy

Personal bankruptcy filings in 2012 have decreased from 2011, according to statistics from the United States courts. The number of personal bankruptcies in the one year period, ending on September 30, dropped significantly. The number of Chapter 7 bankruptcy filings dropped from 1,036,950 in 2011 to 874,337 in 2012-a 16 percent decrease. Chapter 13 bankruptcies dropped from 417,530 to 375,521, down 10 percent.

Chapter 7 bankruptcies still account for approximately 67 percent of all bankruptcies. The states with the highest number of filings per capita are Nevada, Tennessee and Georgia. The lowest are Alaska, District of Columbia and North Dakota.

Consumer default rates have also continued to decline over the same time-down 1.5 percent from a year ago.

These are signs of a recovering economy, and hopefully the trends will continue into 2013. Despite these improving numbers, many Americans are still struggling with debt, and bankruptcy could be a viable option. Please contact our firm for a free consultation.

Benjamin Brand Services- Chicago bankruptcy lawyer .

Teens Need to Learn Dangers of Credit Cards Before Heading Off to College

As the video above from WOLO-TV notes, one group being targeted by many credit card companies is college students. In a July 12, 2012 article entitled “Credit cards and college students can be a dangerous mix,” the USA Today discussed how the Credit Card Act that took effect a little less than three years ago made it more difficult for anyone under the age of 21 to get a card. However, “Under-21s can still obtain a credit card if they have a qualified co-signer or proof of sufficient income to repay the debt,” The USA Today reported. “And card issuers still market aggressively to college students, targeting them with pre-screened mail offers.”

With thousands of families getting ready to send teenagers off to college, this is an important topic that needs to be discussed and handled responsibly. Many of the nation’s graduates are already struggling with the student loan debt they incur during their studies, and adding credit card debt on top of that only compounds the problem after graduation.

As USA Today noted, some credit card issuers will say that as long as an applicant under 21 has a job and can afford a monthly minimum payment, they can be approved for a credit card without requiring a co-signer. Whether parents are co-signers or not, they should encourage their teenagers to use credit cards only for emergencies or pay off the balance immediately. A secured credit card can be a far safer option, and both debit and prepaid cards also avoid much of the trouble associated with traditional credit cards, although neither of those options will help build credit scores.

Whether you are a student or not, filing Chapter 7 or Chapter 13 bankruptcy may be able to eliminate your credit card debt and help you get a fresh start. If you are tired of struggling to pay your monthly minimums, you should contact our firm at (866) 930-7482 or fill out our intake form on this page to let our Chicago bankruptcy attorneys see how we can help.

Benjamin Brand Services – Chicago bankruptcy lawyers

RECENT POSTS

categories

Archives