March 5, 2010

Dear Client

The newspapers are filled with reports about the economy. The Florida Times Union reports that the First Coast has lost more than 50,000 jobs alone. The economy continues to sputter and the news doesn't look good. There is no doubt that unlike the last two recessions, which were relatively short, this one will likely be longer and more severe. People are struggling for help and are looking anywhere and everywhere for solutions.

Despite the governmental programs like Hope for Homeowners "HOPE", or the Home Affordability Mortgage Program "HAMP" or "HARP", many people have given up hope and are surrendering. Before you throw in the towel, you should seek professional advice and consider all of your options. The reason so many Americans have not taken the liberty to avail themselves of these programs is two-fold: the mortgage companies have sought to utilize their own internal modifications first, and secondly, the companies were not excited about the programs because they are not financially lucrative. A Calfornia company, based in Irvine, may change these options. Banker's Portfolio, LLC, has secured a commitment to purchase the H4H securities. The borrowers will obtain the 30 year fixed rate mortgage insured by FHA based on the home's current value, the owners will gain equity. Also, the payoff will occur within 30 to 60 days instead of 8-10 months. Likewise, it will provide the investor with a 15-20% alternative to foreclosure. We will also be conducting again our seminar "Surviving Financial Meltdown." The seminar will be held at the Marriott, 4760 Salisbury Road. Go to the Seminars Heading on this Website for more information and to preregister and receive a free book.

During the next month, we are running a special for first time bankruptcy filers---Chapter 7's Joint or Single Filers for $999.00. Chapter 13's $1,499.00 (which does not include an adversary for 2nd Mortgage).

Do not panic or stress! There are alternatives and options, but you need advice and a well-defined strategy. There are different strategies for different incomes, different lifestyles and ages. It is important to consider all of your options and make an intelligent choice.

That's where we come in. We have helped many families over the years struggling to make ends meet. Let us put our experience and knowledge to work for you.
The bankryptcy and Consumer Protection Act of 2005 ("BACPA") requires a means testing analysis in order to determine if you qualify for a Chapter 7 reorganization. This analysis must be made during a careful screening. I schedule weekly individuals who are interested in the screening. At the meeting, I will require (6) six months of bank statements and pay advices. I will also require your past three years of tax returns. There is a cost for the means testing but if you retain me I will give you credit for the 30 min consultation. Call Heidi today or email for an appointment at 296-1050.


I am also beginning to launch a series called "Lunch 'n Learn." I will attend various employers during lunch time and provide an on-site seminar. I will provide the lunch. It will last 45 minutes with 15 minutes for questions. You will not want to miss these. If you are interested, contact me and I will work with your employer to set up a date. The topic is "Surviving Financial Meltdown." I will provide an excellent discussion and materials for your review. I will also make available the book "Surviving Financial Meltdown."


I also have a quarterly newsletter that I mail to clients, which has more information than contained on this website. Please email or call to be placed on the mailing list.


I also have seminars available for clients that are done at my office. They are informative and FREE for clients. The title of the seminar is "Life After Divorce" and "Life After Bankruptcy." These are important and will help you get started as you complete the litigation process.


As for the new year, you are likely thinking about a resolution. Well let me suggest one. Attack your problems. Too often, people I meet do not attack the problems, but instead wait and watch. I have learned that the problem will attack you. In most cases, it attacks you and your family! Make this new year a time when you move beyond the limitations of the past and make all things new.

Another resolution? Make a budget. Plan for the future. Live deliberately. How?

Plan your income and prepare a budget. Here are some suggestions. First, track your expenses and see where you can cut out unnecessary items. Simply avoiding purchases of brand names can help at the grocery store. You can refinance your debt from a fixed rate mortgage to a adjustable-rate mortgage, such as a 5/1 adjustable rate. This type of mortgage locks in a fixed rate and then converts to an adjustable rate adjusted once annually. This will free up cash now.

Adjusting your withholding will also help. Make sure you adjust it so you do not receive a refund but maximize your monthly income and take-home pay.

You can also boost your deductibles on your auto insurance policy from $250 to $500, and decrease liability coverage. This can yield as much as $50 per month. Consult your insurance professional before making any such changes to your policies. You never want to be underinsured.

Last, consider becoming a part-time entreprenur. Everyone has skills that can earn themselves extra money. We do not usually consider our knowledge and abilities as valuable. You likely have a skill that others can use. Keep your costs low and market your skills and you may have a very profitable part-time business. For a few hours a month, you may be able to earn $250-$500 per month. Inventory your hobbies and skills and see what opportunities exist.

The use of bankruptcy as a tool to become debt free is an option. Creditors understand the time-value of money. So, if you are paying $600.00 per month in unsecured debt, you are investing $7,200.00 per year. How else could you better spend or invest that money. If you discharged that debt and it would take you four years to pay it off, that $30,000.00 could be used for other purposes. There is a cost for pursing bankruptcy, but there is also a time-value aspect as well. Depending upon your age, income, and number of dependents, you could significantly change your five-year financial outlook by filing bankruptcy.

Of course, there are a lot of considerations. But it all begins with making a sound plan and setting financial goals, which are achievable and desirable.

Once you file for bankruptcy, the goal is to become debt free and to remain debt free. That will significantly change your life. It can be done.

Also, managing your divorce and divorce related debt related debts are necessary to achieving a sound financial picture. If you haven't pursued a modification, either increase or decrease, you should take a look at it. It can be worth several hundred dollars per month. It is important to review your divorce final judgment every year or so and review your obligations.

You will also want to obtain a will or revise your will if you have had a significant change, such as a new child, a change in income, or a divorce. All will usually require a change.

Downsizing is the trend of the 90's and now in 2007. Last year, according to Challenger, Gray & Christmas, was the fourth year in a row that job cuts exceeded 1 million. Employers offer buyouts to lower costs and increase profitability. The employer will typically provide an employee with the option of taking a buyout in lieu of being forced into downsizing. The difference can be significant. In some instances, the early buyout will provide more benefits than if one waits until being downsized. In others, the package is the same. But there are more considerations than simply the immediate remuneration. Simply put, should you stay put or take the offer and seek a new job?

In order to make a sound decision, what should you consider when making that most important of decisions?

First, let us review the most basic questions concerning buyouts. First, there is a severance package which is usually based on salary and years of service. This is usually one or two weeks for every year worked, including vacation time unnearned.

However, if you are approaching retirement age companies may qualify you for an early pension and other retiree benefits. This is an important consideration for many employees. You must learn the specifics of that offer to ensure there are no hidden costs.

There may be outplacement services offered--whether in the company or outsourced. Many companies provide career counseling, resume services, interviewing techniques, and other related pre-employment services.

Some companies will accelerate your vesting by adding tenure to your retirement plan.

Negotiations should include a pitch for contributions to the company to obtain a better package.

Extended benefits may add a few months of health coverage or other benefits for a longer period. Also, the employer may extend the period in which to exercise stock options.

If you are interested in changing careers, you may need help with school. Ask the employer about educational opportunities through tuition reimbursement for school or other training opportunities.

So, what questions should you ask. According to Money magazine there are five essential questions. First, you should ask the employer how secure your job really is? The announcement of buyouts usually means layoffs are coming if there are not enough takers. Thus, consider your standing. Have you recently been passed over for promotion? Have you been rated low over the past few years? Are you being given opportunities for advancement, schooling, and challenging assignments? If not, you may be in line for downsizing.

Second, you should consider the security of your company. If there are layoffs or buyouts, the company may have financial problems. Essentially, is this a one-time event or the beginning of a series of cuts that will continue while the company's survivability is at risk. If uncertain about the employer's future, it may be a good time to get out.

Third, how fair is the offer? An offer may be good for one employee but not good for another. You can and should consider the entire package and negotiate to make it better for you. Just don't jump at the first offer. There is often times room to negotiate. Prior to the downsizing and particularly if you have a good record, the employer may provide additional compensation. A common request that can be granted is to remain on the payroll and not take a lump sum buyout to avoid a large gap in your employment history and to keep your health care benefits.

If you take the buyout package, what will you do? You must have a plan before you jump ship. How long will it take you to find a job? Do you have money set aside for a rainey day? What about benefits? Do you have a physical condition requiring medication? How high is your overhead or monthly expenses? You must begin with a budget and determine your cash flow.

If you are considering a new field entirely, you must consider the skills you possess and how those skills translate to a new field. Also, you are competing against people with skills in that area when you apply. You will likely take a pay cut and will require additional training and unpaid time. Can you afford to do this? What is the payout for the new field? Should you simply continue to work in your range of skills and find employment again? Another choice is whether to retire. Can you afford to do so? Keep in mind to support a yearly income of $40,000 a year, you will need to have a lump sum of $1,000,000 at 4-5%. If you are considering such an alternative, contact a professional financial planner

You will also need a strategy for managing the lump sum payment. You will need to invest it overtime so it will last for the duration of your life.

Last, you will need to be emotionally prepared for the change. You need time to adjust to the changes--both financially, emotionally, and physically. Change like that can bring added stress to your life even if the change is positive. The better you prepare the more likely the feelings of loss and fear will pass. Moreover, the more quickly you will move on to the next phase of your life.

Thanks for visiting the website. I look forward to serving you in the future. Call my office and Heidi or Nay can help get you started.

Robert J. Slama, Esquire