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30 Second Real Estate Analyzer

8.19.2010

on the brink of bankruptcy

Dear Bankruptcy Adviser,
I feel like I am on the brink of bankruptcy. I have a condo that is upside down more than 50 percent. My credit card debt is almost $25,000. I am finding it harder to make it each month. I am seeing my credit card interest rates going up, and I am taking out payday loans just to keep up. But I am finding that I am sinking with no way out. My salary would cover my mortgage -- both first and second. I own my car but it's only worth about $2,000. It at least gets me back and forth to work. I make $55,000 per year, and my job is pretty steady right now. Should I seek credit counseling or just try to file bankruptcy?
-- Lori

AnswerDear Lori,
You need to take a step back and review your situation objectively, meaning, you need to see what I would see as a bankruptcy attorney. I am not saying you need to or must file bankruptcy; rather, just consider the following:

You are no longer living paycheck to paycheck. Payday loans are now necessary for you to even make it to the next paycheck. This will become impossible to maintain. From what I have seen, regardless of my opinion on payday loans, they act as nothing more than a finger in a leaking dam. One leak is plugged for now, but another will sprout soon.

From my experience in working with more than 10,000 people in my short career, payday loans are the most common tipping point into bankruptcy. Usually, getting a payday loan means you are no longer able to manage your day-to-day expenses. This is when I know a person is beyond the brink.

You are informally in bankruptcy. You are worth less than what you owe and you have fallen behind on credit cards and property taxes. You do not mention whether the house is too much of a burden, but it appears you want to keep that at all costs.

Your debt of $25,000 is not insurmountable. It is not enough, by itself, to force you into bankruptcy. But if you cannot find a way to get another few hundred dollars into your monthly budget, the debt could be just too much to handle.

There are three solutions for you to consider:

1. Prior year tax refund. You are paying on the mortgage and writing off the interest payments. You might be getting large federal and state tax refunds. That refund amount would tell me quite a bit. If you are receiving a significant refund each year, for example $4,000 or more, then you need to consider increasing your payroll deductions. You could bring another $300 per month into your budget simply by increasing deductions.

2. Credit counseling. This is professional financial counseling provided by nonprofit organizations that help consumers find ways to repay their debt through careful budgeting and management of money. Most creditors work with reputable credit counseling companies. You can consolidate your monthly credit card payments into one single payment.

You need to be careful before electing credit counseling. You must make sure that all your credit card bills will be paid through the plan. If not, you will find it almost impossible to make one payment to the credit counselor and other payments to the creditors not inside the plan.

You may be beyond this service. Unless you can pay off the payday loans, finding additional money to make payments to a credit counseling agency might be impossible.

3. Bankruptcy. You might be eligible for either Chapter 7 or Chapter 13 bankruptcy. You can consult with a bankruptcy attorney in your area to determine whether bankruptcy is an option, or research this option online.

You may have the ability to wipe out your second mortgage in bankruptcy, or relieve some of the pressure by wiping out the credit card debt. At the very least, bankruptcy might help relieve some of your financial tension.

Seek advice and make a decision right away. Don't waffle with your final decision because you need to act and not put off a tough decision. Otherwise, you will get caught in the impossible cycle of payday loans, one that is almost impossible to stop. I hope that you can find a reliable and trustworthy person or service to assist you.

Bloomberg news: BHP Bid, Russian Takeovers Show Potash Prices Have Bottomed, Fertecon Says

BHP Bid, Russian Takeovers Show Potash Prices Have Bottomed, Fertecon Says

Would you invest now hoping that the news of a takeover on potash would increase the pot stock price? I bought pot during the last market crash so I'm on a wild ride. Yeeehaaaa.

http://www.bloomberg.com/news/2010-08-19/bhp-takeover-bid-russian-acquisitions-show-potash-bottomed-fertecon-says.html
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Potash

Billiton to present bid to Potash investorsPolya Lesova MarketWatch August 19, 2010NEW YORK – Mining giant BHP Billiton went on the attack Wednesday, saying it will take its nearly $39 billion takeover bid for Potash Corp. straight to shareholders after the fertilizer firm's board spurned the offer as grossly inadequate.The Anglo-Australian miner expressed confidence in its $130-a-share all-cash offer for Canada-based Potash Corp. of Saskatchewan Inc.The offer values the company at $38.6 billion and represents a 20 percent premium to the closing price of Potash Corp.'s shares on Aug. 11, the day before BHP Billiton's first approach to the firm."We firmly believe that Potash Corp. shareholders will find the certainty of a cash offer, at a premium of 32 percent to the 30-trading-day-period average, very attractive and we have therefore decided to make this offer directly to those shareholders," said BHP Billiton Chairman Jacques Nasser in a statement.But that's not likely to sway Potash directors, according to Credit Suisse report. Fair value for the company is likely between $148 and $180 a share.Potash, a pale yellow compound mined predominately in Canada, Russia and Ethiopia, is an important ingredient for fertilizers, which have seen increased demand on the back of higher grain prices."A bid based at a 50 percent premium (about $163 a share) may be acceptable to the Potash board – but would probably require an accompanying BHP buyback to make the metrics more attractive to BHP shareholders," the investment firm said.At $163 a share, the acquisition would be accretive to BHP by 1 percent in the fourth year, Credit Suisse said. The earlier offer would have been accretive by 5 percent in the third year.Potash stock rallied 28 percent Tuesday after the company announced its board had rejected BHP's offer as inadequate. Billiton to present bid to Potash investorsPolya Lesova MarketWatch August 19, 2010NEW YORK – Mining giant BHP Billiton went on the attack Wednesday, saying it will take its nearly $39 billion takeover bid for Potash Corp. straight to shareholders after the fertilizer firm's board spurned the offer as grossly inadequate.The Anglo-Australian miner expressed confidence in its $130-a-share all-cash offer for Canada-based Potash Corp. of Saskatchewan Inc.The offer values the company at $38.6 billion and represents a 20 percent premium to the closing price of Potash Corp.'s shares on Aug. 11, the day before BHP Billiton's first approach to the firm."We firmly believe that Potash Corp. shareholders will find the certainty of a cash offer, at a premium of 32 percent to the 30-trading-day-period average, very attractive and we have therefore decided to make this offer directly to those shareholders," said BHP Billiton Chairman Jacques Nasser in a statement.But that's not likely to sway Potash directors, according to Credit Suisse report. Fair value for the company is likely between $148 and $180 a share.Potash, a pale yellow compound mined predominately in Canada, Russia and Ethiopia, is an important ingredient for fertilizers, which have seen increased demand on the back of higher grain prices."A bid based at a 50 percent premium (about $163 a share) may be acceptable to the Potash board – but would probably require an accompanying BHP buyback to make the metrics more attractive to BHP shareholders," the investment firm said.At $163 a share, the acquisition would be accretive to BHP by 1 percent in the fourth year, Credit Suisse said. The earlier offer would have been accretive by 5 percent in the third year.Potash stock rallied 28 percent Tuesday after the company announced its board had rejected BHP's offer as inadequate.
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Ing full service no fees self banking

Ing is now offering full service banking with no minimum balance requirement. They say that the average canadian pays 185 dollars in fees per year.
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