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STRATEGIC
ISSUES...ONLINE
For week of September 19, 2005, Issue #229
Featured Articles:
1. The New Bankruptcy Laws
2. Focus on Fraud: Identity
Theft Practical Reminders
3. Tech Tip Weekly: I
Clicked the Wrong Button (But Haven't Lifted My Finger Yet)
1. The New Bankruptcy Laws
The new
bankruptcy law goes into effect in October. If you’re on the verge of
bankruptcy, the changes are certainly important. But even if you feel
financially secure (or you’re living a comfortable existence), don’t be
too complacent. Many people who file for bankruptcy were living
comfortable lives until they were hit by a serious medical problem or
some other catastrophe. Here’s an overview of the major changes in the
new law as they affect individuals.
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You could find it harder to erase all your debts. Under the
old law, you could file a Chapter 7 bankruptcy and wipe out
virtually all your unsecured debts. Under the new law, you’ll have
to pass a means test to qualify for a Chapter 7 bankruptcy. If your
income is too high (generally above your state’s median income),
you’ll have to file under Chapter 13. This leaves your debts in
place and puts you under a court-approved repayment plan to pay them
off. The repayment plan could last as long as five years. |
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You’ll have to complete a credit-counseling course. The law
requires you to go for credit counseling before you can obtain
bankruptcy relief. It must be an approved course, and you’ll have to
pay for it. Recently, the IRS issued warnings to consumers about
abusive credit-counseling promoters, and it’s not yet fully clear
how the approval process will work. |
|
|
You’ll probably have to pay more. The cost of filing is
expected to go up because the new law imposes additional
procedures and liability on bankruptcy lawyers. They’ll pass these
increased costs through to filers.
|
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Your retirement accounts will be protected. There’s one piece of good news in the new law. It formalizes protection for your retirement savings in IRAs, 401(k) plans, and other qualified retirement plans. In general, your retirement savings will be out of reach of your creditors. A limit of $1 million applies to some IRAs. The law also protects tax-advantaged education savings. Amounts in Section 529 plans and education IRAs are also protected, subject to some limits. |
2. Focus on Fraud: Identity
Theft Practical Reminders
Good advice...
Place the individual contents of your wallet
on a photocopy machine, copying both sides of each license, credit card,
etc. You will know what you had in your wallet and all of the account
numbers and phone numbers to call and cancel when your wallet is lost or
presumed stolen. Keep the photocopies in a safe place.
Here's the critical information to limit the
damage when loss or theft has occurred:
1. Cancel all of your credit cards
immediately. But the key is to have the toll free numbers and card
account numbers handy so you know whom to call. Keep those safe and
where you can find them easily.
2. File a police report immediately in the
jurisdiction where the loss or theft occurred.
3. Call the three national credit reporting
organizations immediately to place a fraud alert on your name and Social
Security number. The alert means that any company that checks your
credit knows your information was stolen and they have to contact you by
phone to authorize new credit. There are records of all the credit
checks initiated by the thieve's purchases, which most people don't know
about before placing the alert.
3. Tech Tip Weekly: I
Clicked the Wrong Button (But Haven't Lifted My Finger Yet)
Clicking the mouse takes two steps: a push
and a release. If you click the wrong button on-screen and haven't
lifted your finger yet, press the Esc button and slowly slide the mouse
pointer off the button on-screen. Then take your finger off the mouse.
The screen button pops back up, and MS
Windows pretends nothing happened. Thankfully.
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