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It’s a scene that has grown far too familiar, the destruction and fury of disasters such as Hurricanes Katrina and Rita continue to leave untold victims in their path. Yet while most Americans begin to open their hearts towards the mass exodus of evacuees, some are using the opportunity to hurt people. As reported by ConsumerAffairs.Com, Missouri’s Frank Weltner is among those who are trying to poison the good nature of a caring society. Soon after the destruction began, Weltner set up multiple websites designed to trick people into making donations to nonprofit agencies. Perhaps the most hurtful aspect of this story comes to light when donors learn that funds they donated to Weltner’s phony web addresses are being redirected to anti-Semitic and racist organizations. Weltner who operates the website, “Jew Watch”, is trying to cash in on America’s sympathetic heart……and he is not alone.

While the philanthropic response to Hurricane Katrina can be compared to the support provided following the tragedy of September 11, 2001, Americans must be made aware of possible fraud and scandals in charities. As the largest recipient of donations following 9/11, American Red Cross failed to act in a manner that was considered timely and responsible to its donor’s, and the agency suffered a great loss of trust. This backlash is still being felt today as demonstrated in a scathing September 7, 2005 report from Calcutta, India which blasts its government for donating $5,000,000 to help the victims of Hurricane Katrina. The article outlines how American Red Cross actually used
$109, 000,000 from 9/11 donations to improve its own telecommunication systems!

Interestingly, as Americans scramble to help the victims of Hurricane Katrina, most donated funds are surprisingly being directed back towards Red Cross. It is believed that Red Cross offers a “brand name” which very few nonprofit organizations can duplicate. Regardless, the mission of the Red Cross as written on its website is as follows: “The American Red Cross, a humanitarian organization led by volunteers, guided by its Congressional Charter and the Fundamental Principles of the International Red Cross Movement, will provide relief to victims of disasters and help people prevent, prepare for, and respond to emergencies.” Clearly absent from this long term plan is a statement supporting rebuilding efforts in devastated areas. While “emergency” relief for victims is crucial, funding is greatly needed by other charitable sectors. These include agencies that assist victims in finding new employment and housing. While the Red Cross indicated that it would distribute funding to other agencies (once donations are no longer needed by them), the organization has extremely high administrative and other “non-operational” expenses. This includes a 2004 Executive annual salary of $651,957.00!

In order to safeguard disaster victims, Americans must begin to funnel donations to other sources. Unfortunately, unless this begins to happen immediately, America is doomed to face post-9-11 nonprofit scandals over and over again. Websites such as Guidestar.org can help potential donors negotiate the available options so that they can identify which charities will be the most beneficial to its recipients. In response to the disaster, New York’s Attorney General, Elliot Spitzer issued a brochure “Tips on Charitable Giving” which outlines ways in which prospective donors can protect themselves from being victimized by unscrupulous charities. Some points mentioned in the brochure include asking solicitor’s to provide identification and a stern warning not to give contributions in cash. This advice is sound and should be taken seriously despite the fact that FEMA (The Federal Emergency Management Agency) released a statement on August 29, 2005 specifically asking people to make cash contributions! FEMA’s request is just one more reason why donor’s need to do a little “legwork” in order to maximize the return of their contribution.

Errol Seltzer
201 314-3736
mailto:ESeltzer@JHCare.com ESeltzer@JHCare.com
Nonprofit, health administrator with 20 yrs of experience in the field. Currently working with Waterside publishing on a related book topic.

The summer is over, and Christmas is looming once again. Christmas is a joyous event, but for a lot of people it is a very stressful event, especially because of financial concerns. Many of us will borrow money to help carry the financial burden of the holiday. This might not be the best solution to the problem – a Christmas debt may last most of the year and by the time it is paid off Christmas has come round again and you need to get into debt again to again overcome the financial strain.

If you feel you must find credit to be able to survive the holiday period then it is advisable to find the best credit option available to you. The first place you may look is the high street banks. Some banks offer no interest rate on their credit cards for the first 6 months or more. This may be useful to borrow some money that can afford to pay off in a few months without having to pay any credit. A good place to look online to see if you can get a good credit card deal is Barclaycard UK barclaycard.co.uk” target=”_blank credit cards.

The high street banks might not always be your favourite place to look so it’s good to look online to find the best deal for you. A good place to start your search is Moneynet’s moneynet.co.uk/credit-card/credit-card.shtml” target=”_blank credit card comparison page. Here you can enter make some coices about the card you want (such as whether you want to find a card that has a yearly fee or whether or not you care about a cashback bonus). You will then be given a list of credit cards that suit your choices, and you can then sort the results by order of ascedence of any of the columns of information that you are given (such as introductory interest rate or number of interest free days).

Doing the research before you borrow can help to make sure that you are not in debt all year round: if you do have to borrow then make sure that you find out the cheapest way to borrow that money – this will help to make sure that when you can afford to pay off your debt that you are paying off the debt, and not just the interest incurred because of the debt.

The best way though, to make sure that youre debt free all year round is to not get into the debt. This isn’t an easy option, but if you plan your finances so that you don’t have to get into debt for Christmas, then this will give you a better chance of not having to borrow money next Christmas.

Debt can be a problem that spirals out of control, so make sure your financial snowball is moving into the black, and not into the red, and the doom and gloom that comes with that debt.

Michael is a keen writer living in Edinburgh: michaelhanna77.com www.michaelhanna77.com

Penny Stocks.

Even the name of them hints at the promise of something for nothing!

Spend a Penny – get back one, two, ten dollars!!

Penny Stocks investing is one place and time where you MUST leave your emotions at the door and become utterly ‘Spock’ like.

Spock like?

Yup – use pure logic! No emotions.

See, you need to always keep in mind that these penny stocks are companies starting out in the business world, not the big dogs trying to make another penny. They aren’t necessarily bad investments, but they aren’t good enough to get an investment banker’s money in an IPO.

Be realistic about penny stocks and realize that you won’t find the next tremendously big thing here, but you can find some exciting opportunities with good work.

So what to look for, what are the signs that would indicate a Penny Stock investment worth considering?

• A consistently high volume of shares that are actually being traded is one thing that you should definitely look for in a penny stock investment. But be careful here, because it’s possible to skew the results of average volume trading, go with the consistent volume to get a good idea of what the stock will provide as an acceptable rate of return. Also, make sure the liquidity of the penny stock is something you make a note to look at, how many people are selling and buying everyday? Don’t end up being left with “dead money”, effectively money that you can only release by selling the penny stock at the bid (dumping, in other words) and losing money because the price is diving.

• The company’s profitability is also very important. If it is a start up company that is running a loss then see why they are losing money. It’s not at all uncommon for this to happen but you need to assure yourself that they can manage it and turn it around or will they continue to struggle and lose money for your future. If they grow then your investment grows. Try and make time to do some in depth research to find the right companies and find the best return you can get for your dollar. The more diligence you put in at the beginning – the more profit you look to take out at the end.

• Understand the danger of penny stocks, the speed within which they can and normally do rise and fall in value. Always create an exit plan on any investment (i.e. knowledge of “at what price you sell the stock regardless”), have a solid plan on where to start and make sure it includes where exactly to finish. If you buy a stock and make a 20% return on investment then you are doing extremely well. Do it right five times and you are in the money, wrong five times and you may very well be done. Listen to what the market is telling you, if it is time to get out, then get out. (No emotions, remember Spock!!)

• Place some confidence in how you found out about the stock only if that source warrants your confidence in the first place. If it was in a mailing list then who, where, and when did you get it – and more importantly, WHY?? What’s the connection of you and the sender / recommending party. Nothing? Bin it! trust me – gifts of that nature don’t happen, ever!

I get an average of 10 emails a day with “stock tips” I’d be a fool to ignore! So I do, ‘cos I’m a fool.

Oh looky, super hot tip number one has just plummeted, crashed and burned. Shucks, and I was just about to invest in it – NOT!!

Some are real and reliable updates and advices whilst others (most others) will attempt to “pump and dump” to make money off of the innocent.

Don’t be caught in the middle of someone pumping the stock, and then dumping its shares to unwitting subscribers. Subscribe to a newsletter and then track their investment. If they are legitimately making money then they are probably safe, if not, then it is time for you to move on to the next possibility.

• Don’t overextend yourself on penny stocks alone, no more than one fifth of your investment should be in penny stocks at a given time. (Pssst. Big Tip Here – Don’t over extend yourself on ANY investments – penny or otherwise, always invest within your ancillary income, never touch your cost of living means and NEVER, EVER UNDER ANY CIRCUMSTANCE BORROW TO INVEST.)

Follow these rules and you will be in great shape!

Duncan Roberts measures his penny stocks trading carefully as he’s seen too many investors fail and diving in to deep. Learn more tips to stay out of trouble when theadvicecentre.info/investing/investing-in-stocks.htm penny stock investing at his site theadvicecentre.info/investing/ theadvicecentre.info/investing/

Don’t have good credit? Never fear. There are tons of lenders who give out bad credit payday loans up to $1500. They do not run credit checks. They do not ask for fax information and they do not check references. Is this too good to be true?

Yes and no. There is a reason why these lenders are in business. The finance fee on these bad credit payday loans are high. For example, it is not uncommon to take out a $300 payday loan and have to pay $90 on it. The lenders make money just on the finance charges. Yet, thousands of people a week take out these payday loans.

Whenever a business is booming, it is booming because it fills a need. Since life has a way of surprising us, not always pleasantly, we sometimes find ourselves in need of fast cash. For example, suppose your pet has to have emergency surgery? You might suddenly find yourself short on the rent, or a car payment. In this case, would you prefer to be late on the rent or pay the $90 and have enough to pay the rent? A bad credit payday loan may be just what you need in time of financial need. It is a personal decision.

paydaycashbox.com Bad credit payday loans provide help to people who would never qualify for a personal loan. Personal loans usually require credit and unemployment checks as well as pages of financial information on the owner’s assets and liabilities. The Payday Loan applications are simple, usually requiring nothing more than social security, address, place of employment, salary amount and home and work numbers. Most of them require that you make at least $1000 per month and they allow the money to come from not only employment, but government benefits. That means you can collect Social Security and still apply for a loan.

One should not make it a habit of applying for bad credit payday Loans. However, in the case of a financial emergency, they are a good option.

If you’re interested in applying for a bad credit payday loan, visit paydaycashbox.com paydaycashbox.com to find a lender.

Introduction

This article provides guidance to those concerned that their profit motivated trade or business activities remain deductible, particularly in those cases where losses have been generated in the past and/or are expected to continue to be generated in the future.

The 3-out-of-5 year rule and taxpayer misconceptions

The Internal Revenue Service (IRS) has established an administrative rule regarding their presumption of profit:

An activity is presumed to have a profit motive if it produces a profit in at least 3 of the past 5 tax years including the current year.
-Publication 535: Business Expenses, IRS, p. 6.

This is merely an administrative rule used internally by the IRS. It does not have the effect of statutory law and it does not follow that an activity failing to produce a profit in at least 3 out of 5 years will be presumed to be a not-for-profit activity. Yet many taxpayers have this misconception.

No single factor constitutes evidence of profit motive, although some have evolved from case law and have been adopted by the IRS.

What is a hobby?

A hobby is an activity not engaged in for profit. The term hobby suggests an activity that is personal and recreational in nature. It is unlikely that an electrician would be concerned about having his/her business classified as a hobby. Alternatively, a skydiving instructor, who also engages in this sport for personal pleasure or recreation, may be a more likely candidate for IRS scrutiny and hobby loss classification.

10 determining factors for profit motive

10 factors are used to determine profit motive and include the following:
1. Is the activity carried on in a business-like manner?
2. Does the time and effort expended on the activity suggest profit-motive?
3. Does the taxpayer depend on the activity for his/her livelihood?
4. Are losses due to circumstances beyond taxpayer control?
5. Has the taxpayer modified operating methods to improve profitability?
6. Does the taxpayer (or advisors) possess expertise sufficient for success?
7. Has the taxpayer experienced success/profits in similar past activities?
8. Has the activity generated a profit (and how much) in past years?
9. Can the taxpayer anticipate appreciation of assets used in the activity?
10. Does the activity have elements of personal pleasure or recreation?

Evolution of the hobby loss classification

The above are factors that have evolved from tax court cases and the need to ascertain the motives of taxpayers who were self-employed and using small business losses to offset high income from other sources. This offsetting strategy results in lower taxable income and tax rates or brackets. The classic example is that of the highly compensated business executive. He wants a second home/ranch in the country, but would like to (inappropriately) deduct all or a portion of this second home in the form of interest, depreciation, stables, horses, utilities, maintenance, etc. The objective is to reduce the after-tax cost of this second residence.
Losses that are excessive and unreasonable, but which offset income from other sources, are immediately suspected as recreational or hobby-related. The continuation of such unprofitable activities (when they have not proven successful in reducing losses or generating profits in the past) provides very strong evidence of the absence of profit motive. However, increasing gross profits, even when combined with increasing expenses of operation, may provide sufficient evidence of profit motive.

Credentials, publications, previous successes in similar or related activities or other evidence of expertise (or the hiring of experts) provides strong evidence of profit motive.
Generally, the more time and effort put into the activity, the greater the perception and presumption of profit motive. When a taxpayer is employed in a non-related activity as well, it is useful to maintain some form of written evidence of the dates and hours spent on the activity. (Such logs need not be terribly detailed.) Dependence or reliance on income from the activity implies an absence of hobby or recreational involvement, particularly when other taxable income items (e.g., salaries) are not significantly offset.

The purchase of activity-related assets expected to appreciate implies investment. Investment expenses do not warrant the generation of allowable trade or business losses, but require capitalization or the accumulation of costs to eventually calculate the gain or loss from the investment when the sale of the asset takes place. Reclassification of the activity as investment-related will result in the disallowance of (interim) operating losses.

A checklist approach
Use the above, 10 factors, as a “hobby loss checklist” to review your exposure to hobby loss or not-for-profit classification. Generally, a “yes” response on all or most of the 10 factors contained in this article would suggest clear compliance with a factor and overall support for the evidentially supporting position of profit motive. A “no” response on a factor identifies a weakness.

Weaknesses should be pursued, if possible, to upgrade the response to an “uncertain” or “yes” response. Finally, an “uncertain” response should pursued by the taxpayer, with the objective of upgrading or strengthening the evidentiary requirements for this factor to a “yes” response. Of course, if your self-employment trade or business results in net earnings or contributes to increased taxable profits, you need not be concerned with this checklist.

Summary
These factors are only relevant to the self-employed taxpayer (1) with a tax loss from self-employment endeavors and only become critical (2) if audited by the IRS. However, to the extent practicable, all factors should be pursued with the intention of strengthening your position in the event of a loss from self-employment or an IRS audit. Taxpayers should not be dissuaded from deducting their legitimate, ordinary and necessary trade or business losses, simply out of fear of an IRS audit.

Feel free to publish or reproduce anywhere, as long as you provide a copy to and/or notify the author .

A.J. Cataldo II, Ph.D., CPA, CMA

Credit worthiness is usually measured by your credit history, which represents your financial reputation among creditors. Failing to pay off your credit card debt, not paying off the minimum monthly amount, missing a payment or not making your payments on time can lead you on a path with apparently no return: adverse credit history.

Because debt management is a process to reduce, and eventually erase, your outstanding credit card debt by dealing with creditors and managing your assets adequately, adverse credit history can be repaired and even obtain debt relief over time, in return. Adverse credit history is more commonly known as impaired credit, poor credit, or bad credit tracked by the national credit bureau.

If your credit card debt has led you to impaired credit and your debt management is unclear, take the step by step credit repair guide:

- Request your credit bureau report

- Review all the entries carefully, while checking for discrepancies

- Dispute wrong and missing entries by contacting the companies

- You can pay a credit repair company if for any reason you prefer they review your credit history or your credit card debt

- Beware of financial institutions requiring you to pay upfront for such services or promising debt relief

- Companies who advise you not to contact the credit bureaus directly to get your information are also suspicious

- If you prefer to repair your credit by yourself, make sure to send your disputes using certified letters

- Include copies of supporting documentation that help you to correct an erroneous entry on your credit report

- It is not necessary to dispute every credit item on your consumer report if you do not want, but those affecting your credit card debt

- Do not forget to send a copy of your letter for each disputed item to the three national credit bureaus

- Keep a record of the number provided by every credit bureau for follow up reference

Stick to your debt management plan and get the dispute form provided by any of the credit bureaus. Log the results of your disputes, keep a receipt of letters delivered and so on. Be aware of companies or individual suggesting you to do anything illegal or that sounds risky or shady, like building a new credit file or creating a new identity or using an Employer Identification Number (EIN) or Taxpayer Identification Number (TIN)

The effort invested to repair your credit will be rewarded with the improvement of your credit score and debt relief in the long run. As for companies promising you credit repair keep in mind the old saying: if it sounds too good to be true, it probably is.

Natalie Aranda writes about, credit,

If you have an investment property, should you rent it or sell it? The answer to that question is that you should do both. If you have lots of time on your hands and are handy with tools, you can choose to rent out your property. However, if you have several properties for rent, maintaining them can consume lots of your time. You can choose to hire someone else to maintain your properties, but it cost you money. And higher expenses mean lower profits. In addition to investing your time, finding good tenants for your properties is not easy. Tenants that choose to rent usually do it for a reason. They are usually having credit problems. In addition, most tenants do not take good care of your properties like they would their own homes. And when things go sour, they can mess up your house before they move out. Your goal is to find good tenants to rent your property, transfer the maintenance responsibility to them, and create incentives for them to eventually buy your property. Including the option to purchase to the least contract can eliminate most of the headaches associated with maintenance and dealing with bad tenants. There are several other benefits to the lease and purchase option.

Because the rent is usually higher when you include an option to purchase, this can eliminate most tenants only wanting to rent. People looking for the lease and purchase option are those usually in the process of rebuilding their credit, or are saving money for their down payment. To be fair, the duration of the contract should be between 2 to 3 years, long enough for your tenants to rebuild their credit.

This contract also transfers the maintenance responsibility to your tenants. Not having to worry about maintaining the property frees up your time for you to continue to expand your business. Giving your tenants the option to purchase your property create an incentive for them to take better care of your property. You may also choose to apply some of their rents toward the down payment if they decide to buy your property. This is another incentive for them to pay the rent on time, and eventually buy your property at the locked in price.

During the contract, you cannot sell the house to anyone else other than your tenants. However, you charge your tenants a fee (usually 1 to 2 percent of the purchase price) for the option to lock in the price of your property. If your tenants do not purchase the property before the purchase option contract expires, you get to keep the option fee. However, if your tenants utilize the option to purchase anytime during the contract, you must return to option fee to your tenants. Either way, you are making money whether your tenants buy the home or not. If your tenants decide not to purchase your property and the contract expires, you can begin the entire process all over again.

The important points about the lease and purchase option are that you are looking for good tenants to rent your property, create a constant cash flow from the rent, transferring the maintenance responsibility to your tenants, which frees up lots of your time, and eventually sale the property. Your ultimate goal is to sell the property to good tenants at a price that is fair. The deal should be fair enough that both parties come out feeling like winners. This is important if you want to be in this business for a long time.

onlinefreedomwork.com onlinefreedomwork.com

For many people the difficult part of becoming a FOREX trader is initially getting started. It is something new and can be intimidating or even frightening. This article will be the first in a series aimed at helping you make the first steps to becoming a successful trader.

You will need to get yourself in to the proper frame of mind before you start. This is not a “Get Rich Quick” scheme despite all the hype that is floating around. You will not start with a mini account and make $50,000 in your first week of trading.

To be successful as a trader you will need to treat your trading like a small business. You need to have a plan and budget and that plan should include time-spent educating yourself about the market. If you want to make money with your trades you can expect to spend a lot of time learning in the beginning.

There are several different types of orders that you can use to open and close your trades; you will need to become familiar with them. You will need to learn to perform analysis and what type of analysis to use when. You will need to learn to read and understand various charts that will help you decide what currencies to trade when and at what prices.

There are a lot of news stories that can affect the price of a currency. You will have to know where you can find this news and how to interpret it and what effect it is likely to have on the market.

All brokers use software to perform the actual execution of your trades. You will need to become familiar with the software and comfortable using it. You will have to pick a good broker that has the services available to suit your trading style.

The most critical thing is that you will have to learn patience and discipline to become profitable in a timely manner with out losing money on your trades during the learning curve. The most important thing you can do to avoid costly learning mistakes is to spend significant time paper trading.

What is paper trading? Paper trading is a term used to describe opening pretend trades without any money. The term originates from the stock market where people would write on paper the trade they wanted and then watch the market and see how they would have done if they had actually executed the trade. This is the best way to learn the markets without risking any money.

Today almost all of your brokers have demo accounts that you can use for practicing. A demo account will act exactly like a real account except the money in the account is not real. This has the added benefit of using the same software that you will use with a real account. So not only do you learn how the market behaves you also get a chance to become familiar with the system you will be using. You should paper trade until you are turning a profit on a regular basis before you risk your money with real trades.

If you believe that you have the right mind-set to become a trader the next step is to select a broker and open an account. We will discuss this in the next installment.

Ready to

Millions of retirees expect to rely on Medicaid to cover the cost of their long-term care needs. If you or your parents have that expectation then you must read this article. You shouldn’t rely on this program and by doing so you may end up becoming dependent on family and friends for care.

Medicaid is a government program designed to provide medical care for those who are impoverished. The costs for this program are exploding. Federal Medicaid expenditures now account for the fifth largest budget item behind Social Security, defense, debt service and Medicare. Based on its current rate of growth, Medicaid expenditures will soon be greater then those spent on Medicare.

The majority of the cost is due to the growing number of Medicaid recipients. Currently, 1 in 4 nursing home residents are covered by Medicaid. That number has been growing almost 12% per year. Aging baby boomers will only increase this rate of growth further.

There isn’t money in Federal or State budgets to cover this expected growth. In an effort to reign in costs, Congress is working on a bill that will make it harder to qualify for Medicaid.

Here are a few of the bill’s provisions: 1) Medicaid coverage of nursing home care will be prohibited for those with home equity of $500,000 or more. 2) The ‘look back’ period for the transfer of assets will be extended to 5 years. 3) Certain annuities previously set up to shield assets from Medicaid would now have to name Medicaid as the beneficiary, with the remainder going to Medicaid after death. 4) States are given more leeway in reducing what they pay and limiting benefits for certain enrollees.

The purpose of this legislation is to keep people from ‘gaming’ the system. Medicaid is designed for the impoverished. It isn’t designed for those who want the government to pay their nursing home costs while they pass on significant assets to their loved ones.

In the past, you could reduce your assets by gifting them to your loved ones. As long as you didn’t apply for Medicaid within three years of that gift, it would not be counted as an asset. Now, you’ll have to wait five years.

You’ll no longer be able to buy an annuity, hoping that only the income will be counted, thus ‘shielding’ that asset. The government is eliminating this loophole.

If you live in a part of the country that has seen exponential real estate growth, such as Southern California, look out. Seniors in such places, even if they have few other assets, may be forced to sell their homes and spend that money before qualifying for Medicaid.

‘Medicaid planning’, the taking of steps to move and shield assets so that they aren’t counted by Medicaid, won’t be as effective as it was in the past. And qualifying for Medicaid is no cake walk.

In general, a person can only have $2,000 in what are referred to as resource assets in order to qualify. A resource is any asset that can be used to produce income. If both husband and wife attempt to qualify, the amount is $3,000.

The coverage for in-home care is very restricted in Medicaid. Plus, it will only provide limited funds specifically for care. That means it will continue to be your responsibility to pay the mortgage, taxes, insurance, utility and food bills. This is designed to shift care to those in nursing homes where it is cheaper.

If you need skilled nursing care at home, custodial care is also provided. But if you need custodial care alone, its coverage is very restricted. If you want to remain in your home, independent, as long as possible, then don’t expect to rely on Medicaid.

For those needing care at a nursing home, Medicaid doesn’t cover the entire bill. Any income you receive is first applied to the bill. This includes your Social Security, pension, annuity and other income. Medicaid then pays for the remainder.

The bottom line is that you and your parents should not rely on Medicaid to meet your long-term care needs. Nor should you rely on your ability to transfer assets to your loved ones and still qualify. I’ll discuss viable alternatives in the next article.

I’ll personally respond to your questions, free of charge. Go to guardingyourwealth.com and click on ‘Ask Jeff’.

In addition to being a nationally syndicated columnist and Certified Financial Planning Practitioner, Mr. Voudrie provides personal, private money management services to clients nationwide.

Nationally-syndicated financial columnist and Certified Financial Planner® Jeffrey Voudrie provides personal, in-depth money management services and advice to select private clients throughout the USA. He’ll answer your financial question – FREE at guardingyourwealth.com guardingyourwealth.com

The headlines are scary. “Bankruptcy is at all time highs!”

Well, that may be, but you don’t need to be one of those statistics.

I know your situation might be dire and in some rare cases, bankruptcy may be the only way, but in most cases, it probably is not the answer.

DON’T GET SCARED INTO BANKRUPTCY

The number one reason why people file Chapter 11 is not because they have to, but because they think there is no alternative, that it’s the only way to escape the pressure and pain of their situation; to eliminate debt.

THERE IS ANOTHER WAY

It’s time to start thinking differently. No, I mean REALLY different. Look, if you are considering filing for bankruptcy and the creditors are breathing down your neck with harassing calls on a regular basis, it’s time for some serious action right?

TAKE CHARGE!

My debt advice to is, don’t get angry, just get seriously organized and start taking control of the situation. Your absolute top priorities should be the following;

1) Food & water (essentials only)
2) Shelter (mortgage or rent)
3) Clothes (the essentials)
4) Utilities (electricity, phone, etc.)

Everything else is secondary. Come up with a budget, track every dollar, cut all expenses that aren’t in the list above, stop spending on credit. You get the picture, right? This is your own personal debt elimination program.

If you have to sell stuff, sell stuff. If your situation is bordering on the repo man coming to take your car, big-screen TV or whatever, why don’t YOU sell it and take the proceeds instead.

WORK WITH THEM!

Work with the creditors. Send them a copy of your budget and tell them exactly how much they are going to get. Forget the minimum payments or whatever they tell you they want. You are going to pay them, BUT ON YOUR TERMS.

Be smart, polite and patient. Don’t be rude or disrespectful. Plan and communicate with them regularly and most will cooperate.

Just be diligent with the money you do have. Cancel the cell phones, turn off the cable TV, do what needs to be done and you can eventually come out ahead. There’s no quick fix here, but you can have debt elimination without bankruptcy.

I know it’s tough, but you need to be tougher. Be creative, get advice, take help from others and be realistic. If you have to visit the local food bank or sign up for food stamps, do it.

I won’t lie to you, this road is hard. But the difficulty in the short term is well worth it. Hang in there! YOU CAN DO IT!

About the author

Paul Smith is author of the highly acclaimed debt elimination program,