These days, it’s ordinary middle-class Americans, not a marginalized underclass or high-stakes gamblers, who are most apt to experience financial failure.

A new study by Elizabeth Warren, Harvard Law School Leo Gottlieb professor of law, and Deborah Thorne, Ohio University associate professor of sociology, finds that personal bankruptcy has become a largely middle-class phenomenon led by filers who are college-educated and owners of homes. According to the study, “The Vulnerable Middle Class: Bankruptcy and Class Status,” the shift occurred even before the Great Recession.

“The bankruptcy filings are a warning about the risks now facing middle-class Americans,” says Warren, chair of the Congressional Oversight Panel on the Troubled Asset Relief Program (TARP). No longer can they count on a college education, a good job and home ownership to protect them from financial collapse.

At age 40 and with such accomplishments, Schubert is Middle Class America. She and those like her have long been the nation’s backbone, because their steady jobs and purchasing power have helped drive our economy.

But Middle Class America has two faces, a new study shows. Schubert is that other Middle Class America, too.

After earning $275,000 annually, Schubert used most of her savings to start her business in 2003. The earliest days of the recession in 2007 slowed sales, and she fell behind on business and personal bills. Credit card debt reached $65,000.

She tried to find a full-time job without much luck, because the job market was saturated. Temporary freelance design work couldn’t cover her bills.

So last year, she filed for Chapter 7 bankruptcy along nearly 1.1 million other individuals.

“I’m a highly educated, middle-class woman,” says Schubert, who is the single parent of a 2-year-old son, Lincoln. “Until now, I have never in my life been unemployed.”

“I graduated from a top art design school in the country,” she says of the Rhode Island School of Design. “Opportunities always came.”

After filing for bankruptcy, Schubert hasn’t found a full-time job but has been doing freelance design work. She says she has designed a new handbag line and is looking for investors to help recharge her business.

Home ownership, like higher education, guarantees little, the study finds.

“For decades the middle class counted on homes as an economic lifeboat,” Warren says. With a fixed-rate mortgage and a home that appreciated in value, families had a financial nest egg they could rely upon.

Now, homes are sinking families instead of stabilizing them, as home values plummet. When Diane and Nicholas Spano of Long Island, N.Y., ran into financial problems, they thought that the home they have owned for 29 years could save them.

Diane had a kidney transplant, and Nicholas temporarily couldn’t work at the post office because of a back problem. Diane went back to work at a drug and alcohol center, but it closed.

They applied for a home-equity loan, without realizing that there was no way they could afford the payments. House payments totaled $3,200 a month, and Diane had $200 a month in medical bills.

This summer the couple, who are both 66, filed for Chapter 7 bankruptcy.

“I feel bad,” she says. “But if we had not filed for bankruptcy, I don’t know where we’d be.”

The home went into foreclosure, but the Spanos are trying to work out a loan modification. Diane is working part time at CVS; Nicholas has retired.

And plummeting home values are impacting not only homeowners but also many others who work in the housing industry. Builders, roofers, concrete workers, real estate agents and mortgage lenders are among bankruptcy filers now.

If this article resonates with you because you yourself are a member of the American middle class who is struggling with serious debt problems, and you have questions about how filing bankruptcy would affect your specific situation, I’m happy to offer you a FREE telephone consultation during which I’ll answer all of your questions. Just complete the “Contact Dan” form on the right side of this page, click the “Submit” button, and I’ll get right back with you. Or simply pick up the phone and call me at 918-615-8260. I look forward to hearing from you.

Source: USA Today

When money was tight, Diane McLeod found that she couldn’t pay her bills. So she turned to one of the quickest yet costliest sources of cash – her credit cards.

Now she’s paying a heavy price.

Through it all, however, Diane says that she has learned much. She now understands that for many people, her included, credit cards are just “too easy” and “too dangerous.”

To finish this week’s series on the dangerous combination of college students and credit cards, here are 2 videos.

The first is a humorous look at a college freshman’s experience with her new credit card.

The second is a serious look at a college graduate sharing how her unwise use of credit cards in college is having negative effects on her lifestyle today.

Several months ago I became acquainted with Steve Rhode through Twitter. Steve is the founder of GetOutOfDebt.org.

Through his GetOutOfDebt.org site, Steve answers questions submitted by people who are having money troubles. Steve’s goal is to give people a free and anonymous place to get direct and honest advice about how to best cope with consumer debt problems.

Steve has a special insight into offering advice to people who are stressed out over mounting debt. Steve is like me in that we both can relate well to regular folks who are struggling just to keep their head above water financially. That’s because both Steve and I have been there. We’ve experienced the pain, the fear, the guilt, the shame and every other negative feeling that comes with unmanageable debt. And we both have personally filed bankruptcy and lived to fight another day.

In the following video, Steve and his wife Pam share their personal bankruptcy experience.

But before you watch the video, let me address a few experiences that Steve & Pam endured that should never have happened. And I can guarantee you that if you need to file bankruptcy, and you hire me to be your bankruptcy lawyer, you will never experience these things.

First, Steve & Pam’s bankruptcy lawyer apparently spent so little time with them early in their case, that she didn’t even recognize them at court. That will never happen if you are my client because m clients and I spend a lot of time in contact with one another, by phone, email and in-person.

Second, Steve & Pam’s bankruptcy lawyer apparently let their creditors take charge of the court hearing and berate Steve & Pam. That has not and never will happen to my clients. That behavior is totally inappropriate for a 341 meeting, and if the trustee doesn’t put an end to it immediately, I will.

Lastly, Steve & Pam’s bankruptcy lawyer apparently just cut and ran after the court hearing was over, leaving Steve & Pam to fend for themselves. After my clients’ court hearings, I take the time to sit with them and review what happened, answer any questions or concerns they may have, and advise them on exactly what will happen from then until their case is finished and closed.

If you’re struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact Dan Nunley today by completing the “Contact Dan” form on the right side of this page. I’ll get back in touch with you as soon as I can to schedule a FREE initial telephone consultation. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

As the economy continues to struggle, more and more people are falling behind on mortgage payments, car payments, and credit payments as well as other types of debt. And many of these same people are becoming stressed out and depressed. How are they ever going to get out from under all of the past-due bills.

Many of these people are wondering about bankruptcy. Would filing bankruptcy help them get the fresh start they need? Or would it ruin them forever?

Bankruptcy is not the kiss of death that many people think. In fact, many famous people have filed for bankruptcy and gone on to be financially successful. Let’s look at a few of them:

Entertainers

The list of famous entertainers who have filed for bankruptcy is long and surprising. It includes singers and actors alike. One of the most infamous cases on the list is that of country singer Willie Nelson. Several other country music stars join him there, including Tammy Wynette, Merle Haggard, George Jones and Johnny Paycheck.

Rock singers are no less vulnerable to financial woes. Famous rockers that have filed for bankruptcy include Tom Petty, David Cross, Toni Braxton, Elton John, Meat Loaf, M C Hammer and Ted Nugent. Other names you can add are Jerry Lee Lewis, Chaka Khan, Marvin Gaye and Andy Gibb.

Several well known Hollywood celebrities have also chosen to take advantage of bankruptcy protection including talk show host Larry King. Actors that have needed a fresh financial start include Kim Basinger, Mickey Rooney, Burt Reynolds, Gary Coleman, Lynn Redgrave, Margot Kidman and Lorraine Bracco.

Politicians

Many American politicians have filed for bankruptcy also including our 18th president, Ulysses S. Grant, and our 25th president, William McKinley.

Former Vice President Levi Morton and presidential nominee George McGovern are other famous politicians who have filed. John Connally, the Texas governor wounded during the assassination of John F. Kennedy in 1963, went bankrupt at one time as well.

When you read the names of presidents and governors who have filed bankruptcy and then become illustrious American leaders, it brings home the fact that bankruptcy is a new beginning in your life, not the end of it.

Athletes

Several athletes must be included on this list of famous bankruptcy filers. Boxers Mike Tyson, Leon Spinks and Joe Lewis all asked the courts for bankruptcy protection, as did football player Johnny Unitas. Professional tennis player Bjorn Borg and Olympic gold medalist Dorothy Hamill each filed bankruptcy as well.

Authors

Samuel Clemens, better known as Mark Twain, is just one of the famous authors on this list. Others include the creator of the Wizard of Oz, Frank Baum, Oscar Wilde, Susan Powter and Kate O’Brien.

Businessmen

This list includes such famous names as Donald Trump, Henry Ford and Walt Disney. Comic book pioneer Stan Lee chose to file bankruptcy as did the founder of Hershey’s Chocolate, Milton Snavely Hershey and the founder of Heinz Ketchup, H.J. Heinz.

Do some of the names you’ve seen here surprise you?

Have you been thinking that if you must file bankruptcy it brands you as a failure and terminates your financial future?

Read the list again and think about it. Obviously, filing bankruptcy is not a permanent dead end on the road to success, just a curve along the way.

If you’re struggling with debt problems and would like to know more about how bankruptcy might be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

In direct contrast to my recent post regarding the out-of-control credit card spending of the fictional Rebecca Bloomwood in Confessions of a Shopaholic, I’d like to introduce you to a young Tulsa couple who have turned their back on excessive consumerism and have embraced a life of frugality.

Meet Aaron and Natasha Ball. They began living at or below their means not long ago when they received news that a baby was on the way and they adjusted to living on one income. Now that baby Sam is here, the Balls have committed to continue living frugally and to teaching Sam about spending less and saving more.

Natasha writes a column in Urban Tulsa Weekly that offers money saving tips and is becoming a manual on how to get by in Tulsa during hard times. Her article The Going Gets Tough lets us in on many of the details in her and husband Aaron’s journey to frugality.

Natasha also publishes a blog called Tasha Does Tulsa in which she writes about Tulsa’s attractions and activities, many of which are free.

Source: NewsOn6.com

Ron Eaker received a letter from his doctor’s office canceling his upcoming appointment. Why? Because Eaker filed bankruptcy.

Eaker, a former Methodist minister, and his wife, Mary Ann, who is also barred from the doctor’s office, have a long history of medical treatment there. Eaker was a longtime patient who had been treated by his doctor for three heart attacks and he wanted to continue receiving care there. But unlike hospital emergency rooms, which are required by law to treat patients, doctors in private practice are not obligated to do so.

In November 2004, nearly $109,000 in debt, most of it to the hospital and clinic for treatment of his heart attacks and her nearly fatal brain aneurysm, the Eakers decided bankruptcy was their only option. Although both were working, they were uninsured and figured that short of winning the lottery, they would never be able to pay off their debt. Bill collectors were hounding them, Eaker recalled.

“I didn’t want to declare bankruptcy, but I swallowed my pride and took it,” said Eaker, who left the ministry after 20 years to become a nursing home administrator, then suffered his first heart attack at 52 and lost his job.

After his third heart attack, Eaker said, the hospital wrote off his debt. He proposed to pay off his $30,000 bill to the doctor in $50 monthly installments but an employee of the doctor’s offce rejected that, saying, “You won’t live long enough to pay it off.”

Eaker, who works as a desk clerk at a storage facility and as a handyman, said $50 was all he could afford on the couple’s annual take-home income of $36,000. He said his wife earns $8 an hour as a housekeeper at an assisted living facility. She took the job in 2007 because it provides them with insurance, which he said consumes more than 50 percent of her check. Eaker is making regular payments, including $100 last month, to a collection agency hired by the doctor’s office.

If you’re struggling with medical debt and would like to know more about how bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

Source: The Washington Post.

Pummeled by a deepening recession that is demolishing jobs and family finances, more Americans are struggling to pay their medical bills.

For years a booming economy camouflaged the burden of medical debt. Patients borrowed against their homes or whipped out credit cards. But falling house prices and tightening credit have eliminated those options for many.

As a result, the problem of medical debt is climbing the income scale, affecting not just the poor or the uninsured. Millions of Americans covered by health insurance are paying more for less — fewer benefits, higher co-pays and additional deductibles — and are at risk for large out-of-pocket bills when serious illness or injury strike.

“People who are underinsured end up facing almost identical problems as the uninsured,” said Karen L. Pollitz, director of the Health Policy Institute at Georgetown University. “The difference is, they paid for the privilege.”

Jim Eyler says he needs help. The cement company manager said he spends about 33 percent of his take-home pay on unreimbursed medical bills, many connected with the advanced breast cancer his wife has been battling since 2005. “I keep wondering, where’s the money going to come from?” he asked.

Unlike other forms of consumer debt, such as a mortgage or automobile payments, medical debt is typically involuntary and unplanned, the result of necessity, not desire. Consumers can’t shop around for the best deal on an angioplasty or the cheapest hospital, nor in many cases can they delay treatment. Often they are forced to make decisions at their most vulnerable, because they or a loved one is sick, injured or dying.

Medical debt can quickly snowball. Consumers with unpaid bills can wind up in court defending themselves against lawsuits filed by doctors and hospitals, which typically charge the uninsured full price for care, without the hefty discounts negotiated by health plans. Debtors’ wages can be garnished, liens can be placed on their homes, and their future job and housing prospects torpedoed by bad credit ratings. Those who charged medical expenses to a credit card can find that missed or late payments result in an interest rate that zooms retroactively to 29 percent.

Embarrassed by unpaid bills and fearful of accruing more, many such patients postpone care until they are sicker and their illnesses are more difficult and expensive to treat.

Sheila Bell-Clifford has been uninsured since August, when her husband lost his job and with it their health insurance while he was being treated for metastatic cancer. She has stopped going to the doctor for treatment of her severe diabetes and skips pills, although complications landed her in the hospital two years ago. “I have to juggle them,” she said of her medications, “because if I run out I’m in worse shape.”

If you’re struggling with medical bills and would like to know more about how bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

Source: The Washington Post.

When Roderick Simmons, a 35 year old nurse found himself facing credit card debt and medical bills that added up to $72,000, he tried credit counseling. but it wasn’t enough. So he made the hard decision to file bankruptcy. And guess what? Within two years, he had rebuilt his credit to the point that he was able to qualify for an unsecured credit card with a decent interest rate. Today, five years later, Simmons says filing for bankruptcy gave him the fresh start he needed. Roderick Simmons’ experiences give him a positive view of bankruptcy unlike that of fellow bankruptcy filer Dave Ramsey.

With the recession straining more and more household budgets, a growing number of Americans are making the same decision. The American Bankruptcy Institute reports that consumer bankruptcy filings increased 41 percent in March compared to the previous year, bringing the total number for the month to 121,413. “More people are coming to bankruptcy because they’ve exhausted all their other options,” says Carey Ebert, a Hurst, Texas-based bankruptcy attorney and president of the National Association of Consumer Bankruptcy Attorneys.

Filing bankruptcy isn’t the best option for everyone, but once your debt becomes unmanageable, then it’s time to consider bankruptcy as an option, despite the fact that the new bankruptcy law of 2005 made filing for bankruptcy more difficult—and more expensive. Here are 7 things to think about:

1. Take a close look at your budget. Before filing for bankruptcy, consumers are required to take a credit counseling class that helps them examine their expenses and income. This gives people the chance to consider if there is a way to resolve their debt by making lifestyle changes or getting gifts from relatives.
2. Pay the important stuff first. Be sure to make your house and car payments before your credit card payments. Many people make the mistake of paying their credit card bills first because credit card companies are so aggressive with their phone calls.
3. Consider non-bankruptcy alternatives.
4. Beware of scams. Steer clear of ads in newspapers or on the radio that promise to help you cut your debt in half for free. Con artists are looking for desperate people who can be taken advantage of.
5. Consider your credit score. Bankruptcy can be reported on your credit report for up to 10 years under federal law but that doesn’t mean that you shouldn’t file for bankruptcy. Most people who are considering bankruptcy already have dings on their credit report including late payments, charge offs, garnishments, repossessions and foreclosures.
6. If bankruptcy is what you need, don’t delay. Once you consider the other options and realize bankruptcy is right for you, then there’s no need to waste time second-guessing yourself.
7. Get professional help. While you can file bankruptcy without a lawyer, it wouldn’t be a wise decision unless you are knowledgeable of bankruptcy law, rules and procedure. Bankruptcy is a complex and unforgiving area of law and mistakes can cost you dearly.

If you’re struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

Source: USNews.com