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U.S. Retail Sales Since 1992

RetailMay2014_0This graph shows retail sales since 1992 through May 2014. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). On a monthly basis, retail sales increased 0.3% from April to May (seasonally adjusted), and sales were up 4.3% from May 2013.

The consensus is for retail sales to increase 0.6% in June, and to increase 0.5% ex-autos.

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U.S. retirees return to reverse mortgages, big banks stay away

A retired couple take in the ocean during a visit to the beach in La Jolla, CaliforniaU.S. baby boomers desperate for retirement income are increasingly turning back to a financial product that, after the housing bust, had been left for dead: the reverse mortgage, Reuters reported yesterday. Borrowers took out $15.3 billion of the loans in 2013, an increase of 20 percent from the year before, according to industry publication Inside Mortgage Finance. The record year was 2009, when there were $30.21 billion of reverse mortgage loans made. Brokers and bankers say that the 77 million retiring baby boomers will likely help fuel further growth in the loans in the coming years, making the business a growth spot in a home loan market where volumes have recently been declining. But at this stage, most bigger lenders are uncomfortable with the loans; for example, in 2011, Wells Fargo and Bank of America backed out of the business. Wells Fargo cites factors including unpredictable home values and the level of delinquencies as reasons for it to stay away from reverse mortgages. The government agency that guarantees these loans, the U.S. Federal Housing Administration, found them to be risky, too. Losses on reverse mortgages were a big reason for the agency’s $1.7 billion taxpayer bailout last year — and some experts worry they could lead to similar trouble again.  Full story here.

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Debt relief dilemma: Is bankruptcy or debt settlement best for your client?

As more and more experienced bankruptcy attorney with years and even decades of practice in helping out critically debt-ridden clients from legal insolvency face the same old cliched question – ‘should I opt for bankruptcy or debt settlement‘, the fact remains the same – ‘what financial condition he/she is in’.

In other words, if you ask for the best solution, i.e., whether debt settlement or bankruptcy should be your best choice to resolve your debt problems, then the most suitable reply to that would be – it depends on your current financial health.

When to opt for Chapter 7 bankruptcy

Some specific income guidelines must be complied with so as to get eligible for Chapter 7 bankruptcy protection. However, if you get qualified for it and receive full relief from your debt obligations (also known as a legal discharge), then this route would be the most appealing one for you as far as debt solution is concerned.

If all this while, you’ve been studying about Chapter 7 bankruptcy, then it is very likely for you to be aware of that even if you don’t qualify for it due to your income, still you have the chance to take advantage of it through a so-called means test.

Actually, to qualify for Chapter 7 bankruptcy, your monthly earnings should comply with the pre-scheduled income charts as followed by the bankruptcy courts to discharge a legally insolvent person like you from his/her debts. So, here you’d require a seasoned bankruptcy attorney who can find out whether or not you are eligible to file for Chapter 7 discharge.

It must be noted that taking advantage of Chapter 7 bankruptcy doesn’t imply that you’d lose all of your assets or belongings, as popularly conceived. The reality is that you can keep several of your assets or belongings, even if you’ve filed Chapter 7 bankruptcy under the state provisions known as property exemption, provided you don’t own excessive amount of them.

When to opt for Debt settlement

When a debt negotiator arranges for a settlement, then he/she would normally do so only if you aren’t eligible for legal discharge under Chapter 7 bankruptcy and that you might have to repay more as compared to what is required in debt settlement. The same goes with Chapter 13 bankruptcy, in case you opt for that instead. Often debtors such as you get lucky to have their outstanding loan balances slashed by almost 40-60 percent and settle their total debt for pennies on the dollar.

However, having your debts settled doesn’t come without its shortcomings. A lot of creditors agreeing to your settlement offer would have you to pay them back in a lump-sum amount so as to reduce your debt burden by more or less 40-60 percent as already discussed above.

Additionally, in a debt settlement program, you’ll be issued with a 1099 for the debt amount that has been written off by your creditors. This is known as debt forgiveness and is considered as a taxable income by the Internal Revenue Service or the IRS. This mainly happens when the total assets you own exceeds that of your forgiven debt amount.

Take for instance, in case of a 1099 form being issued to you due to a forgiven debt amount of $18,000 and that the overall assets owned by you is more than your financial obligations by about $8,000, then you’d be held liable to report that $8,000 of your savings as income in your annual tax return and pay your tax accordingly.

Your retirement plan will be considered as an asset during debt settlement, but the same is exempt under bankruptcy, nevertheless. So, if you’re contemplating whether to file bankruptcy or opt for debt settlement, then consulting an attorney who has experience in both the debt relief processes would certainly help you to clear up your queries as well as doubts, and come out with the most apt financial solution at the end of it all.