Building Credit

I hear it all the time in my practice. People say they want to “build their credit.” Every time I hear this phrase I cringe. It’s held up like a badge of honor, building credit or having good credit. “I want excellent credit!”

Yet really, what does this mean? Building credit means creating debt for oneself and paying it back, not all at once, but in bits and pieces, so some secret algorithms can spit out a high number that allows one to become even more in debt.  This is insane.

Seriously. Building credit is building the ability to be in debt. This is what many Americans strive for. I want a good credit score! Why? So that I can borrow money and be in debt. Having a good credit score means having the ability to be in debt. Is this something one should really strive for?

Here’s a concept: how about building the ability to be debt free? Rather than constantly worrying about paying the debt that good credit score bought, how about saving money so that you don’t have to be in debt?

Many of my clients after bankruptcy will ask about building that score back up. I ask, “Do you really want to build the ability to be in debt again?” Most look at me like the thought has never crossed their minds. Many then get a little Aha! look in their eyes and consider the possibilities of not worrying about their credit score and not being in debt.

If everyone who is actually able to pay their creditors took the money they spend on paying debt and put that money in the bank, they would have the money necessary to pay for an emergency if one arises. The “emergency” excuse I hear the most often from people wanting to get another credit card. What if I need money for an emergency?

My answer to that question is that if you are in an “emergency” that requires money, then using a credit card is going to make that emergency bigger and the amount of money necessary larger as well. If you pay a loan shark to borrow money (and make no mistake, credit cards are legalized loan sharks), then you’re going to end up owing and paying a lot more for that emergency than if you used your own money. How? Because you’ll pay interest on the money needed for that emergency. If you didn’t have the money to pay for the emergency in the first place, you’re going to have to make payments on that credit card (or loan). You’ll pay interest on the payments. This means that a percentage of your payment will pay back the loan, but the rest will line the pockets of the bank. You borrow $2000, you end up paying much more than that. If instead you use your own money from your own savings, you’ll just be putting your payments back in your own account and all of the money will be yours for future “emergencies.”

Further, often “emergencies” are expenditures that should be planned for, such as car repairs or a new furnace. If you set aside money each month to pay for these periodic expenditures as they arise, they won’t be an emergency and you won’t have to pay a loan shark to deal with them.

Of course I realize that many, many Americans do not make enough money to even pay minimum dues on credit cards or loans, so they certainly won’t have enough to set any aside. There are many struggling with this scenario and there are no easy or pithy answers. These are the people that the serious loan shark lenders prey upon, payday loan lenders and places like Springleaf Financial. The only way out of this situation is to bring in more money (not easy) or lessen expenditures (also not easy). This situation is not one I am going to solve in a blog post, but I’m not going to pretend it doesn’t exist.

Yet these people near the bottom economically are not usually the ones who are begging me to tell them how to increase their credit scores. No. The beggars are the ones who have enough discretionary income to want a good credit score. They are the ones who want to have the ability to be in debt. Having a good credit score means you can be in debt, and really, this is not something to be proud of.

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Global tax dodgers exposed — Salon.com

Shared post from Salon.com can be seen here.

Global tax dodgers exposed

UPDATED: Tax havens of oligarchs, politicians and the wealthy unveiled by largest file leak ever

BY 

Updated, 12:15 p.m.: ICIJ pointed out that many of the world’s major banks – including UBS, Clariden and Deutsche Bank – have aggressively worked to provide their customers with secrecy-cloaked companies in the British Virgin Islands and other offshore hideaways:

Documents obtained by ICIJ show how two top Swiss banks, UBS and Clariden, worked with TrustNet to provide their customers with secrecy-shielded companies in the BVI and other offshore centers.

Clariden, owned by Credit Suisse, sought such high levels of confidentiality for some clients, the records show, that a TrustNet official described the bank’s request as “the Holy Grail” of offshore entities — a company so anonymous that police and regulators would be “met with a blank wall” if they tried to discover the owners’ identities.

Clariden declined to answer questions about its relationship with TrustNet.

“Because of Swiss banking secrecy laws, we are not allowed to provide any information about existing or supposed accountholders,” the bank said. “As a general rule, Credit Suisse and its related companies respect all the laws and regulations in the countries in which they are involved.”

A spokesperson for UBS said the bank applies “the highest international standards” to fight money laundering, and that TrustNet “is one of over 800 service providers globally which UBS clients choose to work with to provide for their wealth and succession planning needs. These service providers are also used by clients of other banks.”

Updated, 11: 40 a.m.: And here are some more notable individuals found by theGuardian/ICIJ investigation to be hiding funds in offshore accounts:

  • Jean-Jacques Augier, France’s François Hollande’s 2012 election campaign co-treasurer, launched a Caymans-based distributor in China with a 25 percent partner in a BVI company. Augier says his partner was Xi Shu, a Chinese businessman.
  • Mongolia’s former finance minister. Bayartsogt Sangajav set up “Legend Plus Capital Ltd” with a Swiss bank account, while he served as finance minister of the impoverished state from 2008 to 2012. He says it was “a mistake” not to declare it, and says “I probably should consider resigning from my position”.
  • The president of Azerbaijan and his family. A local construction magnate, Hassan Gozal, controls entities set up in the names of President Ilham Aliyev’s two daughters.
  • A senator’s husband in Canada. Lawyer Tony Merchant deposited more than US$800,000 into an offshore trust.
  • Spain’s wealthiest art collector, Baroness Carmen Thyssen-Bornemisza, a former beauty queen and widow of a Thyssen steel billionaire, who uses offshore entities to buy art.

Updated, 11: 20 a.m.: Nominee directors, military and intelligence links: As was original highlighted by the Guardian/ICIJ last year, a number of so-called nominee directors of companies registered in the British Virgin Islands (BVI) have connections to military or intelligence activities.

Notably Gamma Group — the firm that develops surveillance software that (as noted here) has been used by oppressive regimes against activists including in Bahrain — was found to have offshore funds in the BVI:

Louthean Nelson owns the Gamma Group, a controversial computer surveillance firmemploying ex-military personnel. It sells bugging technology to Middle East and south-east Asian governments.

Nelson owns a BVI offshore arm, Gamma Group International Ltd.

Martin Muench, who has a 15 per cent share in the company’s German subsidiary, said he was the group’s sole press spokesman, and told us: “Louthean Nelson is not associated with any company by the name of Gamma Group International Ltd. If by chance you are referring to any other Gamma company, then the explanation is the same for each and every one of them.”

After he was confronted with evidence obtained by the ICIJ/Guardian investigation, Muench changed his position. He told us: “You are absolutely right, apparently there is a Gamma Group International Ltd.”

The ICIJ also notes a “sham” director who is U.K.-based operative working to hide money for the Islamic Republic of Iran Shipping Line –  a firm the E.U., the U.N. and the U.S. have accused IRISL of aiding Iran’s nuclear-development program. Under the front name “Tamalaris Consolidated Limited,” the company registered in the BVI with the British-based operative named as director.

Updated, 10.50 a.m.: Sham directors: The Guardian, whose investigative journalists collaborated with ICIJ in the tax haven project, highlights a list of “sham directors” uncovered in the leaked files. These individuals “appear on official records as directors of companies while acting only on the instructions of its real owners, who stay invisible and off-the-books.”

Over 22,000 companies use this network of 0nly 28 sham directors — some with over 700 companies to their names with offshore account holdings. See here for a full table of these sham directors.

Original post: A trove of leaked documents 160 times the size of Wikileaks’ cache reveals the vast global web of tax havens in which the world’s wealthiest hide their fortunes. A 15-month investigation carried out by the International Consortium of Investigative Journalists, which involved dozens of reporters sifting through thousands of leaked files from offshore companies and trusts, highlights the dirty dealings between politicians and the mega-rich involved in tax evasion.

“The leaked files provide facts and figures — cash transfers, incorporation dates, links between companies and individuals — that illustrate how offshore financial secrecy has spread aggressively around the globe, allowing the wealthy and the well-connected to dodge taxes and fueling corruption and economic woes in rich and poor nations alike,” noted ICIJ on the investigation’s publication.

The trove of data — believed to be the largest leak in history — exposes some 120,000 letterbox entities, offshore accounts and other nefarious deals in more than 170 countries, alongside the names of 140,000 individuals alleged to have placed their money in known tax havens.

The investigation found high profile individuals from around the world — from oligarchs to the family members of dictators, to wealthy American financiers and professionals — engaged in efforts to dodge fiscal authorities. Individuals and groups found to be part of the tax evasion web include (via ICIJ):

  • Individuals and companies linked to Russia’s Magnitsky Affair, a tax fraud scandal that has strained U.S.-Russia relations and led to a ban on Americans adopting Russian orphans.
  • A Venezuelan deal maker accused of using offshore entities to bankroll a U.S.-based Ponzi scheme and funneling millions of dollars in bribes to a Venezuelan government official.
  • A corporate mogul who won billions of dollars in contracts amid Azerbaijani President Ilham Aliyev’s massive construction boom even as he served as a director of secrecy-shrouded offshore companies owned by the president’s daughters.
  • Indonesian billionaires with ties to the late dictator Suharto, who enriched a circle of elites during his decades in power.
  • The eldest daughter of the late dictator Ferdinand Marcos, Maria Imelda Marcos Manotoc, found to be a beneficiary of a British Virgin Islands (BVI) trust. (Philippine officials said they were eager to find out whether any assets in the trust are part of the estimated $5 billion her father amassed through corruption.)
  • The wife of Russia’s deputy prime minister, Igor Shuvalov, and two top executives with Gazprom, the Russian government-owned corporate behemoth that is the world’s largest extractor of natural gas, identified in offshore data.
  • Among nearly 4,000 American names is Denise Rich, a Grammy-nominated songwriter whose ex-husband was at the center of an American pardon scandal that erupted as President Bill Clinton left office.

We will continue to update this post once more details from the extensive tax evasion leaks emerge.

Natasha Lennard is an assistant news editor at Salon, covering non-electoral politics, general news and rabble-rousing. Follow her on Twitter @natashalennard, email nlennard@salon.com.

Oh for Cryin’ Out Loud

I’m a bankruptcy attorney so I am often in contact with collection agencies and whatnot.  I have been doing it long enough that I have also seen a bunch of financial institutions come and go.  It is amazing how many bottom-feeder, rotten-ass lenders turn around and change their name because they are such scum, even people with the worst credit ratings won’t touch them.

One of these is GMAC.  They are now Ally!  They announce it with an exclamation point on their envelopes and return addresses.  Guess what?  We changed our name so now you can pretend we aren’t the same law-breaking, loan sharks we have always been!  Sorry GMAC, or Ally, or whatever.  You still suck.

Another is American General Finance.  Total loan sharks.  Total bottom-feeder scumbags.  Now they are Springleaf!  Ah, how fresh!  How springlike!  How green and new!  No.  The only thing green about them is their diarrhea color. When I saw that they had become Springleaf, I actually exclaimed, “Oh, for cryin’ out loud!”  Hence the name of this post.

People out there in America, if you happen to read this, don’t borrow money.  If you do borrow money, only do it for a home loan.  If you do that, don’t borrow it from a bottom-feeder loan shark. If you are borrowing from a bottom-feeder loan shark, you can’t afford what you are getting the loan for.   Leave them all alone.  They’re horrible and they don’t deserve your business.

Groupon Does Business with Pure Med Spa

After several commenters noted that Groupon in Dallas is giving out a Groupon on Pure Med Spa (aka Beauty Med Spa–same name, no difference), I sent them an email saying that they really ought to reconsider promoting a company that has done so much harm.  Here was Groupon’s response:

Hi Lara,

Thanks for your feedback and sorry for any inconvenience this has caused.
We do our best to feature businesses that see Groupon as an opportunity to gain loyal customers as well as advertise their services.

We stand by all of the businesses we feature and the deals we offer, but if you ever feel let down in any way when using your Groupon, we’ll be more than happy to work with you towards satisfaction! Also, thanks for the information! I will be passing this on to the right people.

Please let me know if you have any other questions.

Regards,

Sarah M.

support@groupon.com

I told them that I am not going to be let down, but others will be.  Who wants to be a loyal customer to a business that has stolen thousands of dollars from customers, burned people with lasers, caused one woman to require surgery because they damaged her legs, and on and on. They are being investigated by several state attorneys general and have been profiled on many television news programs for the harm they have caused.

It’s a shame that this is Groupon’s response considering the negative publicity associated with this company.  Groupon is promoting thieves and hucksters.  Send Groupon a letter letting them know if you have been harmed and what happened.  Maybe if enough people contact them, they will change their policy.

Pure Med Spa, Brite Smile, Crooks All

I finally started the article I have been planning to write for over a year.  Every two or three days another comment comes in on the company detailing further bad acts.  Over and over people tell stories of failed treatments, closed doors, lost money, and injuries.  I have been called by Jeff Nourse.  I have spoken to employees and customers.  An attorney general called me to ask what I knew about the company’s practices.  A local Portland television station profiled a victim of Pure Med Spa and called to get my input.  A financier in New York called because the CEO and CFO had contacted him to borrow money.  Basic research led him to this site and to me.  Along the way Pure Med changed to Brite Smile, and the stories continued.  More money lost.  More people harmed.

It is time to get the word out that this company is a public health hazard.  When another story popped into my inbox tonight, I stopped reading my book, pulled out the computer, and started working on the story.  The words are flowing.  I am going to write about this disaster of a company who steals its customers’ money, disfigures and scars their bodies, and runs rampant over its employees.  Then I am going to submit the story to every major woman’s magazine in this country.  Hopefully one of them will realize that this story is a big one, and that in order to protect consumers, the story needs to be told so that no one gives them another penny and nobody else gets hurt.

Some people have asked me Why aren’t these people in jail?  They are crooks!  They hurt me!  They stole my money! Why indeed.  Something needs to happen to stop them before someone else gets hurt.  If we can’t jail them, at least I can try and stop them with my words.

Why Hire a Bankruptcy Attorney?

Filing bankruptcy can be one of the most difficult choices a person makes. Often you have been struggling to meet your financial obligations. Something happens and the house of cards comes tumbling down, leaving you faced with a proposition that seems like failure. It is difficult and frustrating. You go to see an attorney and realize that even though you have no money to pay your bills, the attorney wants over a thousand dollars or more to represent you.

You discover there may be an alternative. You could pay someone much less to prepare your petition for you. You think Why not? Your case isn’t complicated, at least you don’t think it is. You pay a few hundred dollars and file your case. You may be okay. More likely, after things go very wrong you will realize that you should have hired an attorney.

Bankruptcy is more complicated than it appears on the surface. People who have seen or attended a bankruptcy hearing testify that the meetings are often over quickly. What is not apparent from the meeting is that most of the complicated work is done before the meeting takes place. The hearing should go smoothly if everything was done right ahead of time.

Having sat through countless hearings while representing debtors in the bankruptcy cases, I can assure you that bankruptcy is often more complicated than it looks, especially since the changes that took place in the bankruptcy laws in 2005.

Bankruptcy is more than what bills you owe. People often do not realize that all of their belongings are assets that may or may not be exempt. Other intangible things such as claims, insurance policies, and retirement accounts could also be assets. You may fail to disclose an item that could have been protected, only to lose it because of the lack of disclosure. The actions taken in the years and months leading up to bankruptcy can have consequences, and can cause unintended ramifications for friends and family members.

Every consumer bankruptcy case is assigned to a trustee. That person is responsible for ensuring the interests of your creditors are protected. When you hire a bankruptcy attorney, this person is there to represent you. Your attorney can help you to determine which debts you can discharge or pay off. Your attorney will help you protect assets that are not exempt, and will help you to do so legally.  Your attorney will make sure you list every asset and that every asset that can be is protected. Your attorney will help you ensure that bankruptcy is what it is intended to be:  a fresh start.

When you pay an attorney, you are paying that person to ensure you file everything you are supposed to file, turn over all the paperwork you are required to turn over, help you maximize your assets and minimize your losses, and to represent you against your creditors. In short, you are paying for the best fresh start you can muster.

What can a petition preparer do? Legally, all a petition preparer can do is fill in the blanks on your bankruptcy documents. If you choose to pay someone hundreds of dollars for this service you are, in effect, paying hundreds of dollars for data entry service.

If a petition preparer does more than enter information into your petition, that person is breaking the law. Both federal bankruptcy laws and state rules governing the practice of law forbid anyone except a licensed attorney from giving you advice.

Why? To protect you, the consumer. If an attorney messes up your case, there are protections in place to help you. Attorneys in Oregon,Washington, and many other states are required to carry malpractice insurance. They can also be sanctioned by their bars for failure to adhere to a basic code of conduct. There are no systems in place to help you if a document preparer messes up your petition or gives you erroneous advice. You may be able to file a complaint claiming they practiced law without a license, and while the person may face fines or sanctions, you will not get anything to cover your losses.

Hiring an attorney to represent you during your bankruptcy can be expensive. After suffering through financial difficulties and falling behind on your financial obligations, handing over a large sum of money to an attorney can seem like a real hardship. But bankruptcy is not an area to shortchange yourself.  Filing bankruptcy is your opportunity to make a fresh start. Make it the best start it can be by hiring a good attorney to represent, protect, and advise you. Think of it as your first investment in a new financial future.

I am a bankruptcy attorney. I help consumers file for chapter 7 and chapter 13 bankruptcy in Oregon and SW Washington.

Move Your Money

I’m very excited about a movement brewing to move money out of the big four banks (Chase, Citi, Wells Fargo, and Bank of America) and into smaller, community-based banks.  The big banks took our bailout money, then earned record profits, returning to the same practices that caused the collapse in the first place.  In spite of their profits, they have cut lending by 100 billion dollars in spite of the bailout money that was intended to get them lending again.

In the meantime, local community banks, most of whom avoided the corrupt practices of the big banks, are having difficulty getting by, and government policies that keep propping up the big guys are making things more difficult for banks who have followed the rules.

A group of people came up with an idea to help the little banks while simultaneously sending a message with teeth to the greedy, corrupt thieves who caused the meltdown in the first place.  The idea is simple.  If enough people move their money out of the big four and into smaller, local, solvent institutions, the system will become more balanced so it can be stronger, more stable, and productive, working for economic growth instead of against it.

You can get more information at the website www.MoveYourMoney.info.  The site will have a page where you can enter your zip code to find a highly ranked local bank in your area.

Move your money.  Let’s show those banks who think they are too big to fail that we aren’t putting up with their corruption any longer.