With rising prices and supply issues — prompting food warehouse stores like Costco to ration rice purchases per customer — people need to do whatever they can to keep food costs down. This article follows a Conway woman (Horry County, SC) in her grocery shopping excursion. The bottom line for this mother of nine (yes, nine!) children? Seventy-two bucks and change.

And that’s twelve dollars more than she usually spends!

Some suggestions from the article and from my own personal experience:

• Never go without a list.
• Go one step beyond a list: prepare a menu plan and buy only what’s going to go on the table.
• Don’t get a full-sized cart if you need only a few items — get one of the hand carts.
• Don’t go shopping while you’re hungry!
• Be wary of bulk items. Some stores have raised their prices on bulk purchases. Make sure you check the unit price first, before making a decision.
• Here I differ with the experts: Don’t bother with coupons. Typically, they’re for higher priced items and you can get the same item for less by shopping the lower-cost brands or generic versions. I find they’re not worth the time it takes to clip them, and I can generally save more by shopping carefully. Your mileage may vary.
• Ignore the processed foods, which are almost always more expensive (and of questionable nutritional value to boot). Get potatoes, instead of pre-cut french fries. You definitely pay more for convenience.
• Don’t use the grocery store for non-grocery purchases. Get your toiletries (toothpaste, toilet paper, shampoo, etc.) at a deep-discount chain/pharmacy.

Check the article for the full list!

It’s disheartening to see so many folks affected by deep and soul-crushing debt, but when the money woes come between partners and spouses, it’s even more tragic.

Money is frequently cited as a central cause of marital disputes these days, and when the problem is severe enough to call in a bankruptcy lawyer, it can be even more detrimental to a committed relationship.

Interestingly, though, I frequently see an improvement in married clients’ relationships with each other when the bankruptcy case is actually filed.

Taking action is seen as a release for all that pressure to “do something!” and, given the fresh start and room to breathe created by the automatic stay after filing, couples have the space and time to reconnect and get a fresh start, not only on their finances, but also on their relationship with each other.

Technorati Tags:
debt management, personal finance, debt and relationships

As this article from the Today show at MSNBC.com demonstrates, there are plenty of reasons to keep that card in your pocket.

The most damaging problem, in my view, is the overdraft risk. You see, when you swipe a credit card and your purchase is over your limit, you simply don’t get approved for the transaction. Embarrassing, sure, but it doesn’t wreck your bank account.

But if you swipe a debit card for that purchase, even if you don’t have sufficient funds in your checking account, the bank may very well approve the transaction — and slap you with a $30+ overdraft charge in the process.

Why would banks do that? Simple: it’s easy money.

Read the article, and reconsider that debit card reliance.

Technorati Tags:
personal finance, debit card dangers

Under current law, bankruptcy courts cannot approve a plan that proposes to make changes to a mortgage on a debtor’s primary residence. Under the new language, the courts would have more flexibility in working with debtors and mortgage companies to work out and approve plans designed to help keep debtors and their families in the home and to save their homes from foreclosure.

The rest of the post is really interesting as it looks at efforts by NACBA (the National Association of Consumer Bankruptcy Attorneys, of which Dana and I are both proud members) to lobby Congress for reform in this and other crucial areas in the Bankruptcy Code. It also links to a much-discussed editorial submitted by Jack Kemp, former HUD Secretary and conservative member of Congress, calling for bankruptcy reform in this area:

Bankruptcy law is wildly off-kilter in how it treats homeownership. Under current law, courts can lower unreasonably high interest rates on secured loans, reschedule secured loan payments to make them more affordable and adjust the secured portion of loans down to the fair market value of the underlying property — all secured loans, that is, except those secured by the debtor’s home. This gaping loophole threatens the most vulnerable with the loss of their most valuable assets — their homes — and leaves untouched their largest liabilities — their mortgages.

Take a look, and then submit your thoughts to your representatives in Congress to support HR 3609!

It’s true I normally represent low- to mid-income individuals, couples, and families. But those who are struggling with finances aren’t the only ones who are feeling the pinch, as shown by this article sent to me by a friend (”Help! I Can’t Sell My McMansion” - ABC News.com).

I’m also seeing more and more higher-income folks in my practice. What brought them there? Any number of things but often it’s either catalyzed by, or complicated by, the failure to sell a house. Homes are on the market for upwards of 12 months that, previously, would have sold in weeks, even kick-started a bidding war in a prior economy. Now, these “McMansions” languish on the market, unsold, often bringing their increasingly-anxious owners even more heartburn when the Adjustable Rate Mortgage (ARM) gets kicked into an even higher interest rate.

Here’s just one little factoid that might show how desperate the relatively wealthy are becoming: in order to increase the chances of a sale, more and more owners are throwing in extras, including the (scratch resistant, sparkling stainless steel with Vola designer faucet) kitchen sink. But by “extras,” I don’t mean things like roman shades or a lamp — I mean things like cars.

Bankruptcy relief is hard to contemplate for folks who’ve put a great deal of pride into their money management skills. Many see it as a sign of failure. I suggest, however, that the well-made decision to investigate filing for bankruptcy protection can be a sign of strength. After all, which is more honorable — having your home repossessed, or being proactive enough to propose a Chapter 13 payment plan?

I’ll have more posts during the week about foreclosures, the housing market, the subprime crisis and how bankruptcy fits into all this. Come back tomorrow!

But, according to MSN Money’s Liz Pulliam Weston, the so-called credit repair companies have ruined the benefit for the rest of us, thanks to some well-publicized media reports.

As Liz explains in her article, here on MSN’s Money Central:

[A] handful of credit-repair companies figured out how to supercharge the process — and make serious money doing so. They solicited folks with good credit who were willing to rent out the authorized user spots on their credit cards for $100 to $125 a month. The companies then sold the slots to people seeking “instant” credit improvement for as much as $900 each. … An Associated Press story detailed the story of Alipio Estruch, a 37-year-old real-estate agent who paid $1,800 for three slots that helped boost his score from 550 to 715 in about a month, allowing him to secure a mortgage at a favorable rate. … So, even though there’s no evidence the practice of renting authorized user slots is widespread, Fair Isaac decided to change the leading FICO credit-scoring formula to ignore all references to authorized user accounts.

This change won’t happen quickly; it will start in September with one unidentified credit reporting agency (FI won’t identify it), and then the other two CRAs will pick it up over the following year. Realize, however, that this will not affect joint debtors, or joint account holders. If you and your husband both took out a loan together for a car purchase, for example, this change will not affect either party’s credit rating. But if you’re an authorized user on your wife’s credit card account, then (theoretically) after this change is implemented fully, your credit rating will no longer get the benefit of her prompt payment - and it will no longer be dinged if she falls behind.

Technorati Tags: credit card, personal finance, authorized user, FICO score

Did you type in a phrase in Google to get here? This post, the first in what I hope to be a regular series (perhaps monthly, maybe more often if I get inspired), will answer your question, whatever it is! Basically, I’m going to take some of the keywords reported back to me in my statistics, and address them here, in one post. Sound like fun? Let’s play!

1. who is laura t. coffey - She’s the person who writes the weekly 10 Tips column for MSNBC.com. Sometimes quoted here on this blog.
2. dana wilkinson, south carolina, lawyer - Yes. And a damn fine one, too.
3. cosigners family bankruptcy - OK, I got several permutations of this one, including the heartbreaking “i cosigned for a car and she made her payments late so i filed bankruptcy on that debt.” Here’s the skinny on cosigning: yes, it’s YOUR debt, if you cosign. I’m sorry to tell you that. I know it’s not fair. If she doesn’t make the payments, it goes on her credit, and yours. If you declare bankruptcy, though, your personal liability is discharged (but hers isn’t, unless she files and is discharged, too). But neither personal discharge will eliminate the lender’s rights against the car - meaning, they can still repo the car, despite the fact that you’ve got a discharge. What they can’t do is expect you to pay deficiencies or late fees or the like. There’s another post on this subject here.
4. can you get sc after being bankrupt - Can you get what? Santee Cooper? Sure, if you pay a deposit. Saint Kitts and Nevis? Probably not unless you win the lottery. Seychelles? South Carolina? The Safety Car? Santa Cruz? A little more specificity here would be welcome.
5. four primary reasons for filing bankruptcy - Statistically? Or in my experience? If you’re talking about my personal experience, that’s medical trauma/unexpected illness (either debtor’s or family member’s); loss of job; divorce; overspending (yes, it does happen - just not as much as creditors want Congress to think it does). Statistically - um, you’d think I’d be able to find that somewhere, wouldn’t you? I’ll keep looking.
6. can elderly people be cosigners for personal loan? - Can they? Sure. Should they? I don’t recommend it except in very narrow circumstances.
7. SC Law Updates - wow. On everything? I mean, I can try to include more case law updates here for bankruptcy and foreclosure law, but that’s a pretty tall order … On a more serious note, though, you might try the following resources for general South Carolina legal information: SC Code of Laws; SC General Assembly Current Legislation landing page; SC Judicial Department (including advance sheets - case opinions); SC general state government portal.




8. Wilmington Trust Robert Moser - Either the president of Sun Trust Delaware Trust Company, in Wilmington Delaware, or a Wilmington NC police detective. Take your pick. (Probably others, too.)




9. sc law on payday loans - I have been remiss in not passing along this product before now. The SC Appleseed Legal Justice Center has published a fantastic resource for this topic - “Payday Lenders And the Law - Know Your Legal Rights Before Turning That Check Into Cash” (available here in English and here en Espagnol)




10. how to protect yourself if your husband defaults on a loan - Oh, boy. Talk about sensitive topics. While you’re not liable yourself, unless the loan’s for a necessity of life or you cosigned for the loan, it will still affect your financial lives together. My advice, although I’m not a marriage counselor, is to make sure you both fully hash out your financial histories, and have a clear understanding of needs, goals, and expectations (preferably before saying “I do”). After the wedding, the advice is the same for anyone who wants to protect their credit rating: check your credit reports periodically, and make sure you get a look at all three CRAs, not just one (as they each sometimes report different debts). Make sure you know in whose name the debt in your marriage has been placed, and if your name is on that loan, you need to take some responsibility for making sure it gets paid on time.
    

Technorati Tags: keyword cleanup, bankruptcy, consumer law,

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The article starts by introducing us to Everywoman - Cindy Holland, from North California, in this case. Her husband’s a full-time paramedic whose benefits program doesn’t extend insurance to family members, so she and the three kids go without coverage. They don’t qualify for public insurance; and they make too little to afford private policies, so … what’s going to happen when one of the children or Cindy becomes ill and requires ongoing medical care?

This really isn’t a trick question, yet our policy wonks and legislators seem convinced that it is. Something needs to be done.

While many industrialized countries provide care for all,
the United States covers only the elderly and the poor. Some 45
million, or 15 percent, of people in the world’s richest nation
lacked health insurance in 2005, up 3 percent on the previous
year. That number is widely believed to be higher today as
healthcare costs skyrocket, employers slash worker benefits and
insurers gut coverage and cherry-pick the healthiest customers.

Technorati Tags: health care crisis, insurance coverage

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I think that’s a short-sighted approach, for many reasons. Primarily, however, we’re creatures that, by nature, seek pleasure and work hard to avoid pain. If we attempt to make a change in our lives - say, become more frugal and get out of debt - that will require a psychological change, a change in the way we think about a problem, then we’re handicapping our efforts by withholding the pleasure.  It’s really simple: we work for pleasure and to avoid pain.

Let’s look at an example: if you want to lose weight, what do you do? You know it - every sentient adult and most kids in this society know it by now. Cut calories, exercise more. The “what” isn’t the problem that trips up nearly everyone who tries to lose weight, is it? It’s the why - the reasons. The reasons behind any personal change must be strong enough and numerous enough to withstand the onslaught of pain that making changes invariably brings. And the best way to beef up those reasons? Find the pleasure in your program. Look for what’s fun about losing weight. What’s pleasurable - say, the growing appreciation you have for your body, or appreciation from the opposite sex, say, or being able to run a mile without collapsing at the end, or the fun of shopping for clothes in a smaller size.

Finance-related projects are no different. If you cut out all the things in life that make life fun, you will quickly lose your appetite to make those changes that are really necessary for your financial health. Sure, you can save $15 a week by brewing coffee at home and never having a latte again from Starbucks. But why not invest in a handsteamer, brew some extra strong coffee at home, and make your own lattes - and maybe have the Starbucks variety once in a while to boot? It’s no different than dieting - and all the experts there agree that the key to longterm success isn’t making drastic changes to achieve the goal faster. It’s to make changes in your lifestyle that you can sustain over the long haul.

I believe working for financial health is no different. And so I recommend articles like, from MSN Money, “Ten Tips for Affordable Family Trips.” Take that vacation! Just look for ways to trim its cost.

Technorati Tags: personal finance, get out of debt, cheap vacation travel

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