keitp
business & a rofessional
, BRUCE WEBERMAN'S CLUB ELITE ENTERTAINMENT GROUP C U1:1' \
PR E S E N TS
e_itP
Analyze First
Financial situations need different
strategies.
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2940 Middlebelt Rd
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DE VINNEY CZARNECKI PHYSICAL THERAPY
5839 W. Maple. Suite 100 • W. Bloomfield I 248 851-6999
www.deptonline.com
58
April 14 • 2011
JN
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woman came to see me and
requested that I settle her
$75,000 of credit card debt.
When we met, I found she had limited
income and assets and a second mort-
gage on her home that is underwater.
Though I could have settled her
credit card debt, it wasn't the right
move. Instead, we filed a Chapter 13
bankruptcy, which allowed her to get
rid of all of her credit card
debt along with her $60,000
second mortgage through
what is called a "lien strip:'
The cost: $200 per month
for 60 months.
Had I settled her credit
card debt, it would have cost
her approximately $25,000
over three years and she
would still have the second
mortgage.
With two options pre-
sented, the proper choice
was a no-brainer. Would
you rather pay $12,000 over
five years to get rid of $135,000 of
debt, or $30,000 over three years to get
rid of $75,000 of debt?
I often talk about financial crisis
management (FCM). FCM is simple in
concept. It is about selecting the prop-
er timing and legal tools to maximize
the preservation of a person's assets
and future income.
Sometimes the analysis is rather
basic in identifying the solution. If a
person has no assets and no income,
bankruptcy is a quick, cost-effective
solution. We file the case, the debts are
discharged and the person has a fresh
start.
Many situations, however, are more
complex. If the person's crisis stems
from failing to file or pay taxes, the
first step in the process is to have the
necessary returns filed. After that, the
focus is on controlling the collection
process. Here, some income taxes may
be dischargeable and sometimes an
Jewish Genealogists
To Give Research Tips
Three members of the Jewish
Genealogical Society of Michigan
will discuss their research experi-
ences, successes and tips at 1 p.m.
Sunday, May 1, at the Farmington
Hills Library, 32737 W. 12 Mile.
Jonathan Haber will discuss
researching his grandmother's nine
siblings and their descendents.
Offer in Compromise is available to
settle the debt.
More often, we negotiate a payment
arrangement that is affordable. The
key is carefully presenting and struc-
turing the client's finances to optimize
the goal of a minimized payment.
How about the couple who has
steady income – even as much as
$200,000 annually — but they have
amassed $150,000 of credit
card debt, have a mortgage
of $450,000, an equity line
of $175,000 and a home
that in today's market
is only worth $400,000?
Bankruptcy may not be a
good option for this couple,
but debt resolution of the
credit card debt and second
mortgage is viable along
with a possible short sale.
There is also the busi-
ness person whose firm has
fallen victim to the econ-
omy, leaving him saddled
with bank debt and creditors. But he
still has assets such that bankruptcy
is not a good solution in the short
term. Here, carefully drawn strategies
are needed to keep the creditors from
ultimately reaching the assets that
remain.
In medicine, you diagnose to deter-
mine the ailment and then look for a
cure. In solving financial problems,
you must first identify the optimal
strategy and then select the proper
tools to implement.
Proceed with caution before taking
action. A misdiagnosis in medicine
can be critical. The same is true in
addressing financial issues. If you
don't get it right, you have compro-
mised your future well-being. 1
Ken Gross is an attorney with That, Gross
PC (www.thavgross.com) and hosts "The
Financial Crisis Talk Center" at 9 a.m.
Saturdays on WDFN Radio (1130AM).
Richard Jaeger will speak on dis-
covering a relatives he didn't know
about through a large collec-
tion of photographs.
Alexandra Goldberg will talk about
her breakout in finding the miss-
ing link affirming her descendan-
cy from a rabbinical family with pos-
sible roots going back to King David.
Free for members; others $5.
Information: www.jgsmi.org .