Personal Injury Law Firm Burns & Jain Injury Blog

We have been practicing law in Boston and throughout Massachusetts since 1985. I have represented clients in District Courts, Superior Courts, the Appeals Court, Housing Court, Probate Courts, Federal Bankruptcy Court and the Federal District Court.

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IRA Retirement Options for Massachusetts Clients

Our Massachusetts clients who are not covered by retirement plans (such as 401k’s or 403b’s) often request clarity regarding retirement account options. With April 15 just around the corner, we are glad to provide an update. First, we need to identify the various “vehicles” available. The basic plan is the Individual Retirement Account, or IRA. An IRA allows you to deposit up to $5,000 (or $6,000 if you are over 50) into a tax deferred account each year provided you meet certain criterion. The good news is that this reduces your taxable income by the amount you put in. Further, if you can pay the tax on the income, you can do a ROTH IRA, which has an income restriction for qualifying, however, has the added benefit of allowing tax free withdrawals – by you or your heirs. The monies can be invested in stocks, bonds, mutual funds, commodities, certificates of deposit or otherwise, so long as they stay within the host company’s IRA account. You are allowed to convert IRA investments into ROTH IRA investments, however, there are income restrictions for 2009. This changes in 2010. See our prior blog articles on Roth IRA conversions and Roth IRA planning for more details.   You can also open a ROLLOVER IRA, which is simply converting qualified retirement monies in a 401k, 403b or other retirement account, into an IRA that you now can control the investments in. There are also SEP IRAs and SIMPLE IRA’s for folks with their own businesses. They have various requirements, however, the SEP IRA allows up a contribution up to $49,000 and the SIMPLE IRA allows contributions up to $11,500 ($14,000 if over 50) The requirements and restrictions can seem daunting, however, T. Rowe Price, whose useful website I have included above, provides details for opening and funding each IRA. There are other helpful websites too: Charles Schwab and Company is excellent. Many of our clients’ companies use Fidelity for their 401k or 403b plans. They have individual account services too. The lowest cost fund family is generally Vanguard. And, as we discussed in our earlier blog article on long term investment strategies, costs are critical because they create a drag on monies that are invested for the long term.   It should be noted that this article is not inclusive of all retirement plans. Many of our clients have Keough profit sharing plans, for example. This article is simply a reminder of the basic retirement vehicles out there for clients who don’t have retirement plans at work. Nor is this article investment advice. We are simply reminding our clients to review their options with their tax investment professionals before April 15.

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Massachusetts Bankruptcies Up in February

Bankruptcies were up 14% in February across the United States verses February 2009, and 9% above January 2009, according to the National Bankruptcy Research Center data. The federal government statistics, which were released on March 2, 2010 for 2009, indicated 1,473,675 bankruptcy filings in 2009, a 31.9% rise in filings for 2009 over the previous year. Chapter 7 personal bankruptcies were up 41% (from 744,364 in 2008 to 1,050,832 in 2009) We will continue to inform our clients of the trends in the federal bankruptcy courts, and especially in the Massachusetts district.

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US v. Canada – Ice Hockey, Bankruptcy, Massachusetts Winter Notes

Those of us here in Boston and throughout Massachusetts went to bed last night with the sting of defeat from watching the Olympic Men’s Ice Hockey Finals. Thus, it seemed like a good time to review our sister country to the north’s personal bankruptcy situation.   According to Canadian statistics, like the US, 2009 was a record year for personal bankruptcy filings. The issue, like Massachusetts and the US, is debt: in Canada the level of “household credit per person” is up from just over $20,000 in 2001 to over $40,000 in 2009! At the end of the third quarter of 2009, an average Canadian had household debt of 140.8% of their personal disposable income!

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Massachusetts Foreclosures Up in 2009

The results are in for 2009: lenders filed a record 27,828 foreclosures in 2009, which is up from 2008. The jump was 28.1% according to the Warren Group, owner of Banker and Tradesman business newspaper. However, the number of “completed” foreclosures, is down 25.4% to 9,269. More than 2000 foreclosures were filed most months of 2009. In our bankruptcy practice, we have noticed a similar decrease in clients facing foreclosure.

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Feds Streamline Mortgage Applications for Massachusetts Homeowners

The federal Department of Treasury announced new guidelines to streamline mortgage application processes for all mortgage applicants, including those in Boston and Massachusetts who apply for a mortgage associated with Fannie Mae or Freddie Mac. Our bankruptcy clients often are not able to save their homes because interest rates, and other costs, are just too high.

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Massachusetts Consumers Need to Know Fair Debt Collection Laws

Our personal bankruptcy clients often point out that they are being “harassed” by the collection agencies and lawyers, in Boston and throughout Massachusetts. One Boston area law firm uses the brother of the attorney as their attack dog – he implies he is the lawyer and his words are vicious.   Thus, it is important for consumers to know their rights. The Federal Fair Debt Collection Practices Act protects consumers from abuse by collection agencies and collection lawyers. Note, the federal law does not apply to the actual creditor, only to “third parties” such as the collection agencies and collection attorneys. The Massachusetts law, Chapter 93A, Section 49, Debt Collection in an Unfair, Deceptive or Unreasonable Manner gives Massachusetts consumers additional protections.   What to do? First, get the information. You are entitled to the written details of the creditor, the amount due, all penalties, interest, and an explanation of your rights. Ask for the name, company and address of the person you are talking to.   Second, if there is a mistake in the amount, or the penalties, send a detailed letter explaining your position. Remember, often collection agencies, and their associated law firms, have “purchased” your debt and have no idea of the real terms of the original debt.   Third, do not accept harassment. Collection agencies are prohibited from calling between 9 pm and 8 am. They are prohibited from using abusive or threatening language. You may also write a letter to the agency stating that you do not want to be called or contacted in writing, and they must abide by this written request; although they are allowed one more letter stating their plan. If they do not adhere to the law, contact the Federal Trade Commission and contact the Massachusetts Attorney General’s Office.   Fourth, if the debt is in fact yours, and the amount is correct, work it out. They are often willing to take a percentage on the dollar, and to accept a monthly payment plan. If you propose a plan you can truly do, and it is acceptable, the case is closed. They would love to close the file and accept the agreed upon payments. If you fail to make an agreed upon payment, contact them and work it out; otherwise, their automatic collection system will restart.   Finally, there is always litigation. The law provides for damages and attorney fees. This can be expensive and time consuming, however, it is sometimes necessary with the worst offenders.

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Massachusetts Publication Cites Boston Attorney

Banker and Tradesman, a publication of the Warren Group published their bankruptcy statistics noting that Chapter 7 Personal Bankruptcies were up 33% in 2009. This is not news to readers of this blog or our website.   What is news, however, is that Banker and Tradesman acknowledges that Massachusetts is different. While all states have folks filing bankruptcy following layoffs and business declines, we don’t have the medical bankruptcy rate that other states appear have. Instead we have seen an increase in the number of clients sensitive to huge interest rate hikes by the credit card companies.   What we have seen, I explained to Banker and Tradesman, is an increased number of clients who actually could pay their credit card debt. However, when the creditors unexpectedly increased the interest rates — that pushed them over the edge: they see no way they can ever make the payments. When they file for bankruptcy, they get a fresh start, but they were not headed in that direction before the interest rate increases.   In Canada, a recent article by a bankruptcy trustee, found the same results.

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Can Universities in Boston or Massachusetts Discriminate Against Bankruptcy Filers?

Clients and potential clients in Massachusetts sometimes ask us if filing for a Chapter 7 Personal Bankruptcy will have any adverse effect on their current or future student loans. The answer is fairly clear: no. In 1978, Congress passed a law which prevented various types of discrimination against folks who filed for bankruptcy protection. With respect to denying student loans, the law states that a governmental unit “may not deny a student grant, loan, loan guarantee, or loan insurance to a person that is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act.”

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