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Will Social Security Checks Be Paid If Debt Ceiling Is Not Raised

Will Social Security Checks Be Paid If Debt Ceiling Is Not Raised

Around 28 million Americans are expecting to receive their Social Security checks on August 3, and 27 million are expecting their checks later in August. However, if Congress does not reach a deal to raise the national debt ceiling by the deadline of August 2, it is unknown if Social Security checks will be sent out. President Obama has warned Americans that the federal government may not be able to pay Social Security beneficiaries if a deal is not reached.

This is one of the few times Congress has failed to raise the debt ceiling when it has become necessary. Therefore, it is unclear what will happen if the debt limit is not raised by August 2. It is clear that the government will not be able to pay its bills in August. Estimates claim the government will be $134 billion short by the end of August.

Some have suggested that Social Security should use money from its trust fund to pay beneficiaries in August. However, Treasury Department officials do not support drawing from the trust fund. The trust fund holds IOUs, not actual money, that would have to be redeemed by the Treasury Department. Many Americans disagree and believe that President Obama can use the trust fund to make Social Security payments if necessary.

Source:

Tami Luhby, Debt Ceiling: Will I Get My Social Security Check?, https://money.cnn.com/2011/07/28/news/economy/debt_ceiling_social_security/index.htm?iid=HP_River (accessed July 29, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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How Americans Are Reducing Spending

Many Americans are facing difficult financial situations. Results from a new Harris study show how consumers are reducing their expenses. (Today) The survey asked consumers to respond to whether they had thought about using different methods of saving money in the past six months. The results are listed below, along with the percentage of those surveyed that considered the method. (DailyFinance)

  1. Saving money at the grocery store, 67%
  2. Packing a lunch instead of buying one, 46%
  3. Going to a hairstylist less often, 43%
  4. Switching to reusable water bottles instead of buying bottled water, 39%
  5. Ending magazine subscriptions, 31%
  6. Reducing amount of dry cleaning, 24%
  7. Cancelling or reducing cable TV service, 22%
  8. Stopping morning coffee purchases, 21%
  9. Ending newspaper subscriptions, 18%

10.  Ending landline phone service, 16%

11.  Ending or reducing cell phone service, 14%

12.  Using public transportation or carpooling, 14%

 

 

Source:

12 Ways Americans Are Cutting Back on Spending, https://lifeinc.today.com/_news/2011/07/06/7029594-12-ways-americans-are-cutting-back-on-spending (accessed July 10, 2011).

 

Top 10 Ways Americans Are Cutting Back on Spending, https://www.dailyfinance.com/photos/top-ways-americans-are-cutting-everyday-spending/4276496/?icid=sphere_copyright# (accessed July 10, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Supreme Court Rules Against Estate of Anna Nicole Smith

The Supreme Court recently ruled against the estate of the late model Anna Nicole Smith. In a 5-4 decision, the Court ruled that Smith was wrongly awarded $400 million from the estate of her late husband by a bankruptcy court. When she was 26, Smith married wealthy oil executive J. Howard Marshall, who was 89. Marshall died just one year later and left everything to his son Pierce. A probate court in Texas awarded the estate to Pierce after Smith sued. However, Smith filed for bankruptcy in California and made claims that Pierce withheld money that Marshall had promised her. The bankruptcy court agreed with Smith and awarded her $400 million.

The Supreme Court case addressed the conflicting rulings by the Texas and California courts. The Court held that the United States Constitution prevents bankruptcy courts from ruling on claims outside of bankruptcy law. This means the California bankruptcy court was prevented from granting damages on tort claims. Therefore, the ruling from the Texas court stands and Marshall’s whole estate was awarded to Pierce.

The parties involved in the case did not live to see the outcome. In 2007, Smith died from an accidental overdose. Marshall’s son, Pierce, also died while the case was pending.

 

Source:

Newscore, Estate of Anna Nicole Smith Loses at Supreme Court,

https://www.nypost.com/p/news/national/estate_of_anna_nicole_smith_loses_tdc2FYsQQPIXCPZkKnE3aI (accessed June 28, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Popular Restaurant Chains May Be At Risk For Bankruptcy

According to new research, popular food chains Denny’s, Wendy’s and Domino’s may be in danger of going bankrupt. TheStreet.com ranked restaurants’ chances of going bankrupt by their Altman Z-Score. The score is based on financial information from each company, and predicts the likelihood of bankruptcy within two years. TheStreet has been using their scoring system since 1968, and they claim to have a 72% rate of accuracy in predicting bankruptcies two years before the filing.

Denny’s is the restaurant most at risk for bankruptcy, according to the most recent ranking. Wendy’s/Arby’s came in second, and Domino’s Pizza was fifth. Additionally, DineEquity, which operates Applebee’s and IHOP, ranked fourth on the list. Other restaurant chains, including Sbarro, Perkins and Marie Callender’s, have already filed for bankruptcy this year.

 

Source:

Pete Kenworthy, Report: Denny’s, Wendy’s and Domino’s Among Restaurants in Danger of Bankruptcy, https://www.abcactionnews.com/dpp/news/national/wews-report-dennys-wendysand-dominos-among-restaurants-in-danger-of-bankruptcy1309574048690 (accessed July 3, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Regional Bank President Wants Tax Reform To Lower Debt

Narayana Kocherlakota, president of the Federal Reserve Bank in Minneapolis, recently suggested a change in the U.S. tax system to discourage debt growth. High consumer and bank debt lowers the stability of the economy. This makes economic trouble, like what occurred in 2007 through 2009, more likely.

Currently, the tax code encourages debt by allowing taxpayers to take advantage of interest deductions. Consumers are encouraged to incur mortgage debt and banks are encouraged to take on debt for financing. Kocherlakota urged Congress to reduce the deduction for mortgage interest and reduce the interest deduction for corporations. This would reduce the incentives for people to take on debt that destabilizes the economy.

Officials are attempting to avoid another economic downturn. President Obama signed a bill last year that gives the Federal Reserve the power to supervise financial institutions whose failure could cause an economic crisis.

 

Source:

Vivien Lou Chen, Fed’s Kocherlakota Calls for Tax-system Changes to Discourage Debt

Growth, https://www.bloomberg.com/news/2011-06-27/fed-s-kocherlakota-calls-for-tax-systemchanges-to-discourage-debt-growth.html (accessed June 28, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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L.A. Dodgers Baseball Team Files Bankruptcy

The Los Angeles Dodgers have filed for Chapter 11 bankruptcy protection in Delaware. Dodger’s owner Frank McCourt was relying on a TV deal worth billions to help ease financial troubles. However, Major League Baseball did not approve the deal. McCourt is asking for time to secure another media deal, and he is seeking $150 million to finance daily expenses. The Dodgers owe millions to former players, who have filed claims. The team has also experienced a substantial decrease in fan attendance at games.

The Dodgers likely would have been unable to make their next payroll. McCourt filed for bankruptcy before a takeover by MLB could become an option. Analysts believe MLB will fight the bankruptcy, because the league wants the issue to stay within baseball. Additionally, the MLB constitution gives commissioner Bud Selig the power to takeover a team in bankruptcy.

McCourt has been a controversial owner since he acquired the team in 2004. McCourt purchased the Dodgers for $430 million in a highly leveraged transaction. Selig hired Tom Schieffer to monitor the Dodgers in April, because he was worried about the financial situation. The bankruptcy filing has been an embarrassment for the team.

Source:

Associated Press, Los Angeles Dodgers File For Bankruptcy, https://msn.foxsports.com/mlb/story/los-angeles-dodgers-file-for-bankruptcy-frank-mccourt-blames-bud-selig-decision-062711 (accessed June 27, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Beware of credit repair scams.

Beware of credit repair scams.

There are many credit repair companies that are essentially scams. They take your money and they do not improve your credit or they only temporarily improve it. The Federal Trade Commission (FTC) offers this advice for avoiding credit repair scams:

  • Do not work with a company that wants you to pay for credit repair services before they have provided services
  • Don’t work with a company that won’t tell you your legal rights or explain what you can do on your own
  • Don’t work with any credit repair company that tells you not to contact a credit reporting company directly
  • Avoid a company that suggests disputing all of the information on your credit report, whether or not it is accurate
  • You cannot legally create a new “credit identity”; if you follow illegal advice and commit fraud, you may be charged with a crime

 

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Can you end up in jail for not paying your debts?

The simple answer to this is “no, there are no debtor’s prisons.” Unfortunately, despite the lack of debtor’s prisons, some people are ending up in jail because of bad debt.

Minnesota law does not impose prison sentences because of bad debt, but Minnesota law which is rather pro-creditor provides a mechanism which allows a creditor to have a debtor arrested.

Creditors are able to manipulate Minnesota laws to apply pressure to debtors by having them arrested. The individual is not arrested for not paying a debt. They are arrested for contempt of court.

In Minnesota a creditor can sue an individual giving them notice of the suit through the mail. If the debtor does not read his mail carefully, the debtor might not even know he has been sued. In Minnesota a creditor can after not receiving a response from the debtor go to court and get a default judgment.

Once a creditor has a default judgment, he is able to send the debtor disclosure forms. If the forms are not filed out and returned to the creditor promptly, the creditor can have the debtor held in contempt of court and go back to court and request a bench warrant. These are given out as a regular course of business.

Once a bench warrant exists, different counties handle the matters differently. Some counties, for example Anoka County, have their police officers go out and actively seek the debtors. The debtors if found are arrested and dragged to jail where they are booked and detained. Often the debtor has to post bail. The bail is often set at the amount the debtor owes the creditor. Sometimes the debtor will be released without bail if the financial disclosure is filled out there and then.

Other counties, like Dakota County do not actively seek debtors, but will pursue the warrant if the debtor is stopped for another reason.

If you have fallen behind on your bills, it is imperative that you always read your mail. Not reading your mail can have severe consequences.

Never let your mail pile up. Never throw out your mail without reading it.

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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