Bankruptcy

Chapter 7

You get debt relief through liquidation (Loan forgiveness) or Loan discharged.

             1) But the following debts cannot be forgiven or discharged

                      - Student Loans (unless undue hardship)

                      - 3 Years of Back Taxes

                      - Alimony and Child Support

             2) The following Assets will be protected

                      - IRA-exempt up to $1 million

                      - Alimony and Child Support

                      - Pensions, Life Insurance and Annuities

Chapter 13

You get relief through adjusting your debts. This can be costly and time consuming as each loan servicer will be out to protect her interest.

Chapter 20

You get debt relief through a combination of both chapter 7 and 13.The Judge determines that. Your debt servicers play a huge role too in determining payment or re-structuring plan.

While Debts that were received through Fraud will not be discharged, those received through Negligence can be discharged. For example, if you took a loan for investment purpose and the business venture failed because you did not do your due diligence, such debt will be discharged.

BONDS

1)     Agency bonds (FNMA Fannie Mae, FHLMC Freddie Mae, SLMA Sallie Mae, FFCB, FICB, FHLB), are MORAL OBLIGATIONS of the US government and are NOT backed by the full faith and credit of the US government with one exception GNMA Ginnie Mae bonds which are backed by the Full Faith and Credit of the US government.

2)     There are three types of Municipal Bonds ("munis") namely

 

       A) General Obligation bonds are backed by the full faith, credit and taxing authority of the municipality that issued them

       B) Revenue bonds are issued for specific projects. They are backed by the revenue of the specific projects (not backed by the full faith, credit and taxing authority of the entity that issued them)

       C) Private Activity bonds are issued to finance projects like the construction of stadiums

 

3)    Municipal bonds can be against Default and the two INS companies that insure municipal bonds are AMBAC and MBIA.

Wills-- I Love You aka Sweetheart Wills

WILL

A will is a legal document that provides the maker aka the testator the opportunity to control the distribution of his or her property at death thereby avoiding the harsh realities of the state’s intestacy laws. A will is one of the many documents needed for Estate Planning.

A Sweetheart aka I Love You Wills are wills drawn up by two individuals based on mutual understandings which leave all assets to each other upon death of the other. It is reciprocal in nature.

Types of Wills will include

A)     Holographic Wills—Handwritten by the maker

B)      Nuncupative Wills—Oral, dying declarations that are made before a sufficient number of witnesses

C)      Statutory Wills—Drawn up by an attorney with compliance the state laws in which the maker resides.

A Will is said to be Valid when the

1)      Maker is of legal age or age of maturity

2)      Maker has legal testamentary capacity

3)      Maker recognizes and recollects the property being disposed of AND

4)      Maker recognizes the relationships of those loved ones that have claims in the will

Common Clauses in a Will

1)      Introductory clause

2)      Declaration Clause

3)      Bequest Clause

4)      Residuary clause

5)      Guardianship clause

6)      Attestation clause

7)      Self proving clause

8)      Simultaneous clause

9)      Survivorship clause

10)   Disclaimer clause

11)   Contingent Legatee Clause

12)   No Contest clause

Dying Intestate means dying without a proper a will or dying with a will which fails to dispose of all your properties. Dying testate means dying with a properly drawn up will.

Loans Amongst Family Members

1) Intra-Family Loans (aka Loans amongst Family Members)  

If a family member loans money to another family member money and charges no interest or a rate below the applicable federal rate, the lender will be deemed to have made a "gift Loan". The lender will have to report the forgone as well as the actual interest for each year the loan is outstanding as ordinary Income. However, no part of the interest actually paid or imputed is deductible by the borrower if the loan is not business related. Reportable amount will be as follows                               

LOAN AMOUNT	REPORTABLE AMOUNT
$0 to $10000	$0
>$10000 to $100000	The Lesser of *Net Investment Income or *Int. calculated using AFR Applicable Fed Rate Minus Int. calculated using stated rate of the loan
>$100000	Int. calculated using AFR Applicable Fed Rate Minus Int. calculated using stated rate of the loan

FINANCIAL AID For Education

FINANCIAL AID: All students should always complete the Free Application For Federal Student Aid FAFSA. Information on the FAFSA is used to calculate the Expected Family Contribution.

A)    Students who are independent may be eligible for more aid than children who are considered dependents. Independent students are; over age 23, married, working on Masters of PhD, have legal dependents other than a spouse, orphan or ward of the court until age 18 or veteran of the U.S armed forces

B)     You should keep as much as possible out of the student as student assets are deemed to be available for education more than the parent’s assets. Custodial accounts are the only accounts whose assets are deemed to belong to the student.

C)    Financial AID programs will include; Pell Grant, Stafford Loan, Plus Loan, Federal Perkins Loans, Federal Work Study, Federal Supplemental Education Opportunity Grant.

D)    Tax Advantaged Plans for education will include Qualified State Tuition (Prepaid Tuition and Savings Account—529 plans), Coverdell, Roth IRA, Series EE bond, UGMAs, Lifetime Learning Credits and American Opportunity Tax Credits

How Long It Will Take To Become a Billionaire

As posted on Yahoo Finance, Thanks to Michael Deane & Pr

COBRA--Consolidated Omnibus Budget Reconciliation Act

1)       COBRA became Law in 1986

2)      COBRA gives you the option to choose to keep your Group Health Insurance benefit after

A)     Losing your job

B)      Reduction in your working hours

C)      Quitting your job

3)      COBRA must be offered by ALL employers that employ 20 or more.

4)      The length of time that you can keep COBRA depends on the qualifying event as listed below;

A)     18 months for reduction in hours or normal termination

B)      36 months for death

C)      36 months for Divorce

D)     36 months for Medicare Eligibility

E)      36 months for Loss of dependency by children of employee

F)      Up to 29 months if employee meets Social Security definition of Disability

5)      The employee or qualified dependents have 60 days after they get the election notice to choose health insurance coverage for themselves under COBRA.

6)      The premium for COBRA coverage is equal to the full cost of your group health coverage plus up to 2% more for administrative costs making a total of 102%

Lost or Stolen Credit and/ or Debit Card

A consumer’s liability for a lost or stolen Credit or Debit card is limited to

A)     $50 OR

B)      The actual amount charged on the card

Whichever is less.

The consumer must notify the credit card company within a reasonable time frame after the card is noticed missing and/ or stolen.

FDIC-Federal Deposit InsuranceCorporation

1)     The Federal Deposit Insurance Corporation (FDIC) Promotes and Preserves public confidence in the U.S. financial system.

This is done by

-Insuring deposits in banks for at least $250,000 per depositor, per insured bank, for each account ownership category;  

-Identifying, monitoring and addressing risks to the deposit insurance funds; and

-Limiting the effect on the economy and the financial system when a bank fails.

      2)  There are three types of Account Ownership Namely

                         A) Individual Account

B)    Joint Account

C)    Testamentary Account

3)     Each depositor of a Joint Account is said to own 50% of total deposit in that account.