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Financial Tips For 2021

Financial Tips For 2021

The majority of Americans have experienced some financial challenges this year. Many hardworking people have lost their jobs, have had to cash out retirement and asset funds to make ends meet, or had to seek government assistance. Many more have simply had to rely on credit cards and other risky financial habits to get by. Whether you have experienced severe financial distress, or are simply looking to start the New Year off on a path to financial freedom; there are some quick and easy ways to improve your financial outlook for 2021.

Analyze

The first step towards improving your financial situation is to analyze and assess where you currently are in your financial goals. Begin by examining the monthly, or weekly, costs for essential expenses such as housing, utilities, food, clothing, medical care, and debt payments. Next review the expenses for non-essential expenses. Compare the percentage of your income spent on essential versus non-essential expenses. Further, calculate the overall percentage of income-to-expenses.

Develop

Once you have taken a deeper look into the details of your financial situation, you need to develop a plan. Your plan should consist of a few key components, starting with a savings/emergency fund. Yes, you should still be saving for emergencies even when money is tight.  In addition to your emergency fund, your plan should also focus on eliminating unnecessary expenses from your monthly spending budget. This will help lower your income-to-expense ratio.  Finally, outline a strict plan for your debt payments. If you cannot afford to pay more than the minimum payment, look for ways to maximize your monthly payments by transferring the balance to a zero interest card or request a lower interest rate from your current company.

Establish

Many times, people fail at financial recovery because they do not put their plan into practice. Like a New Year’s resolution for any goal; financial health should take the same priority and discipline as other areas of health in your life.  Be sure to take the plan you have developed and put it into action each and every day. Build yourself small rewards for your discipline in getting back on solid financial footing, this keeps you motivated to continue your consistent efforts.

If you are experiencing trouble with your finances, are worried about your debt payments, or are already being harassed by creditors; contact an office of compassionate Sacramento bankruptcy lawyers today at 916-459-2364.

 

What You Need To Know About Unemployment Benefits

What You Need To Know About Unemployment Benefits

Unemployment claims have reached record highs above levels ever seen in history. States are reporting unemployment claims upwards of 900,000 a week.  As many people are desperately seeking assistance to make ends meet, many feel relieved by the news this week that an extension to, and addition of new, unemployment benefits may soon be available.

Unemployment Benefit Considerations

While unemployment benefits serve a great need for our citizens, they do not always come without a cost. In fact, there are silent consequences looming around the corner for beneficiaries of unemployment benefits that everyone should know about.

First, unemployment benefits are taxable. By law, unemployment compensation is taxable and must be reported on a tax return; this also includes the benefits provided under the Coronavirus Aid Relief and Economic Security (CARES) Act.

Therefore, it is suggested a beneficiary of unemployment compensation should withhold taxes at each benefit check to avoid owing those taxes at the time of filing.  If taxes have not been withheld, the beneficiary should begin planning for their tax liability bill and begin working to have payment for the liability, or secure a payment option with the IRS.

Another consideration of unemployment benefits is how they are handled for individuals experiencing financial insolvency. Unlike other forms of debt, tax debts are higher priority and have fewer options for assistance if paying the debts is not possible. Generally, income tax debt is not eligible for a debt discharge in bankruptcy.

Whether you are facing financial hardship over the loss of a job or income, are currently receiving or in need of unemployment benefits, or have concerns about your tax debts; contact one of our Sacramento bankruptcy lawyers today.

AMC Movie Chain Files Chapter 11 Bankruptcy

AMC Movie Chain Files Chapter 11 Bankruptcy

In 2019, the domestic box office hit the second highest record for profitability; bringing in some $11.4 billion. Prior to March of this year, many predicted that the profitability in 2020 would achieve a similar record. However, the entertainment and nightlife industries have taken one of the largest blows to profitability due to the pandemic.

As the world’s largest cinema chain, AMC has struggled to maintain any level of profitability this year. AMC company shares have decreased by 60%; 30% of which has plummeted in the last week alone.  However, it isn’t solely the consequences of a sudden health crisis that brought the financial insolvency AMC is currently experiencing. Prior to this year, AMC was already struggling to resolve some $5 billion in existing debt. As 2020 draws to a close, AMC has filed for bankruptcy in hopes of reorganizing debts and maintaining operations.

Last week, in efforts to resolve growing debt burdens and better position themselves for financial recovery,  AMC agreed to accept a $100 million investment by Mudrick Captial Management. This investment is outlined to help the cinema chain survive the financial impact of the pandemic. However, the company reportedly still needs $750 million in liquid assets to fund employee retirements through the year 2021.

Therefore, many industry experts agree that AMC could survive the current economic climate if they are granted debt relief through a Chapter 11 bankruptcy.  There is hope afloat for AMC and cinema fans, as the reorganization sought by AMC executives is aimed at protecting one of American’s favorite past times.

 

A Round-up of Bankruptcies in 2020

A Round-up of Bankruptcies in 2020

As the year 2020 continues to witness a sharp decline in economic growth, businesses all over the U.S. are filing for bankruptcy. This mainly includes the brick-and-mortar retail sector businesses that have succumbed to the economic meltdown due to operational difficulties and financial stress. As a result, quite a few retail companies have petitioned for bankruptcy, including household names such as J.C. Penny and J. Crew, Pier 1.

RTW Retailwinds

The most recent addition to the list of companies filing for bankruptcy was RTW Retailwinds, the fashion retailer's parent company New York & Co. This is likely to result in the shutting down of business operations across 400 locations. However, the management of New York & Co does not plan to shut down the business entirely, but rather spin out portions of its business to repay creditors. In the bankruptcy petition, the retail giant declared assets worth $412 million and liabilities worth $396 million.

Sur La Table

Sur La Table has been in the kitchenware business for slightly over five decades. However, the privately held kitchenware retailer could not survive through the economic slowdown. In a recent move, Sur La Table filed for bankruptcy under Chapter 11. According to a report, Sur La Table plans to shutter down half of its operations, which is roughly about 60 stores in the U.S. The Seattle-based kitchenware retailer is currently negotiating a 70-store deal with the Fortress Investment Group.

Muji USA

Muji USA, the Japanese home goods chain, filed for bankruptcy protection under Chapter 11 with $64 of million debt. The minimalist home goods supplier plans to close non-revenue generating stores and renegotiate its leases.

After analyzing some of the top retailers that have filed for bankruptcy, two significant problems stand out. First off, these companies relied more on their brick-and-mortar business model, and secondly, they did not have a reliable disaster management plan in place. This made it impossible for them to adapt their operational model quickly.

If you are in that tight spot and are running into debt, you still have a handful of options. Depending on your assets and liabilities and your ability to repay your debt in the next five years, you can file for liquidation under Chapter 7 of the Bankruptcy Code or reorganization under Chapter 13.

Contact a Sacramento bankruptcy attorney to find out how you can get financial relief.

Modesto Budgetel Inn Files for Bankruptcy

Modesto Budgetel Inn Files for Bankruptcy

Budgetel Inn in Modesto California filed for Chapter 7 bankruptcy this past week. United Resorts LLC operates the nearly 100 room Budgetel Inn and hopes to liquidate its assets to pay off the motels debts. According to the court documents filed, United Resorts debt includes $61,439 in lease payments, $99,534 to California Department of Industrial Relations and $160,000 that United Resorts CEO and President loaned the motel for renovations, capital improvements, and other expenses.

One day after filing bankruptcy, tenants were informed that the motel was closing and they were to vacate the premises by that afternoon. This short notice came as a surprise to many, as most were waiting on refunds for rent that they already paid. Approximately half the people that stayed at the Budgetel Inn stay as long-term guests consisting mainly of homeless and low-income families. The motel has since ceased business activities, and the main office doors are padlocked shut.

Unfortunately, businesses that fail to pursue debt relief efforts early enough in their financial struggle may succumb to the results of their delay. While the motel could have restructured their debts in a Chapter 11 “reorganization bankruptcy”, they fell short leaving them with minimal options. Now in an attempt to resolve their financial liabilities, the motel will pursue a Chapter 7 “liquidation bankruptcy”. Here, a court-appointed trustee will sell off the debtor’s assets and distribute the funds to creditors and agencies the debtor owes money too.

For those left out in the cold, there are local agencies that can help. St. Vincent De Paul Ministry has arranged temporary lodging at other Modesto motels for 57 people including families with children, disabled adults, and senior citizens. The single tenants were advised to go to Beard Brook Park where the city allowed the homeless to set up a tent city. Social service workers also arrived at the Budgetel to provide assistance to the tenants.

If you find yourself in the circumstances beyond your control and you are struggling to pay your debt, don’t wait! There are many options to help you get out of debt and back on the path to financial freedom. Contact a Sacramento bankruptcy attorney to find out what choices you may have to get debt relief.

Vehicle Airbag Recall Forces Takata Into Bankruptcy

Vehicle Airbag Recall Forces Takata Into Bankruptcy

Takata, a company based out of Japan, will soon be replacing passenger airbag inflators in more than 782,000 Ford vehicles in the United States. The chemical used to inflate the airbags deteriorates over time, causing the airbag eruption to contain too much force; resulting in the explosion of shrapnel into the vehicle.

The financial ramifications of the recall have forced Takata into bankruptcy. The repairs will cost the company the remainder of their assets to be liquidated. The recall will cost the company the replacement parts of some 100,000 vehicles worldwide.

Explosive Chemical

Ammonium nitrate is the chemical used to create the explosion that inflates the airbag. The chemical becomes unstable when exposed to high humidity and temperature fluctuation between hot and cold. In prior Takata recalls, parts availability was a problem. According to the U.S. National Highway Traffic Safety Administration, that took over management of the recall, over 1/3 of the vehicles recalled have not had the inflators replaced according to a court-appointed monitor.

Check for Your Vehicle

Several vehicles in the recall are from the years 2010 to 2014. Ford owners can check the Ford website to see if their vehicle is included in the recall. Owners can put in their vehicle identification number to see if their vehicle is on the recall list. Dealers will be replacing the defective airbag inflators.

If you are facing some overwhelming debt and you need some relief from the bankruptcy court, consider speaking to a Sacramento bankruptcy attorney to see what options you may have.