Author Archive

There are thousands of unclaimed gift cards in the country. Surprisingly states consider the amounts left on the card abandoned property, much like unused payroll checks and unused back accounts. 

Maine collects unused gift cards after two years. South Carolina is looking into legislation to give the state the right to collect unclaimed fit card credit, as is Texas. New York collected over $9 million in unredeemed fit cards in 2008 and returned only $2,150 to consumers. Continue reading Gift Cards – be sure to use them

According to a recent Scientific American article, at least 62% of all U.S. family bankruptcies filed in 2007 were caused by medical problems and expenses. This is up from 2005 where about half of all individuals filing for personal bankruptcy cited medical expenses as one of the major causes. In 1981 only 8% of families filing for bankruptcy cited medical problems as the reason.

The study, conducted by Harvard researchers, found that of those filing, over 75% had medical insurance at the start of their illness Continue reading Leading causes of Bankruptcies

Many people seem to consider their business credit cards are viewed differently by the bureaus than their personal cards. If you have a business credit card with one of the big card issuers be sure to treat is as well as you do your personal cards.  Even though they are presented as business cards, the card issuers still report you to the credit bureau as though it is a personal card. And the Credit Bureaus consider it a personal card too.

On the business card account, if you don’t pay off your card every month you will get a ding.  Continue reading The Mysteries of Credit Scores

In this economic downturn unfortunately this is happening more and more. There are two types of bankruptcy that a company may file – Chapter 11 or Chapter 7. Depending upon which they file, it affects the safety of your job and therefore your benefits.

Chapter 11 allows the company to restructure. Many large corporations have done this such as the Tribune Company (the publisher of the Chicago Tribune and the Los Angeles Times), United Airlines and of course, GM.

Chapter 7 is the complete shut down of a company. As a result of this all future benefits to the employee are terminated. If you have a 401(k) with this company the 401(k) will be liquidated and the assets will be distributed. You can then roll these funds over into an IRA to avoid tax penalties.

Chapter 11 more than likely means that your position may be retained; however you could be facing financial cutbacks such as reduction in salary and even benefits.

With regard to a Chapter 11 filing, it is important to know your legal rights as there are laws that protect you:

- Your pension plan can be dissolved – a court decides whether the company can continue to cover the plan.  Unfortunately the pension plan can be dissolved, however The Pension Benefit Guaranty Corporation guarantees up to $51,000 per person per year in 2008 for people retiring at age 65. You can visit their website to learn more. 

- Your 401(k) assets – these have to be held in a trust account and cannot to accessed by your employer or creditors.  However, as mentioned earlier, one of the cut backs you may experience is the ceasing of matched contributions.

- Your health benefits may be reduced – if you are let go you can use the coverage from your employer for 18 months through COBRA. However, look around for alternates as there are less expensive options out there – some people have said that Costco has a good option. There are websites you can visit to do some comparison shopping.

As GM declared bankruptcy yesterday much was being said about this American icon taking this step.

I recently heard on NPR a commentator talking about the derivation of the word bankruptcy. The word comes from the Latin bancus which means bench, and ruptus which means broken. A ‘bank’ originally referred to a bench. Bankers had benches so they could conduct business in markets and fairs – i.e. public places. A broken bench indicated that the bank was no longer able to do business. The Italians coined the phrase Continue reading Bankruptcy – the definition