In the March 29 issue of InformationWeek its editor in chief Rob Preston argues that our broadband policy is wrong as a country and we should let the marketplace rather than government mandates help expand broadband. He says that our marketplace has made us number 3 in broadband readiness and that other countries where the government has taken a role are not doing well.

Do go and get high speed internet because it is deductible in the means test as a telecommunications expense. Anything above basic phone service that is necessary for you or your family's health or welfare is deductible. Broadband is important to use for job search and dial up internet is too slow for most uses these days. Additionally with dial up only one computer can be on the internet at the same time. If you get a wireless router for about forty dollars then you and your spouse can be working on job searching on two different computers while your kids are doing there homework from school online on theirs all at the same time. Become part of the 21st Century telecommunications revolution and deduct it on the means test.

In the April 5 issue of Bloomberg Businessweek, Aetna CEO Ron Williams was asked if premiums would go up as the result of health care reform. Williams said that absolutely they would go up and "some" of the things driving those are the additional taxes on the industry.

That was the bad news your health insurance premiums will go up, but they good news is that they are still deductible in bankruptcy in the means test. In Chapter 7 you can buy health insurance right before filing or if your premiums go up under both situations and still deduct the new higher amount in the means test. For those in Chapter 13 you can even buy it after you file and count the increased amount as an expense deduction.

Today in United Student Aid Funds v. Espinoza, 08-1134, the Supreme Court Ruled that a Chapter 13 plan is binding on a creditor with actual notice even if it is legally defective. In Espinoza the Court ruled that the plan was binding even though a separate lawsuit should have been filed. The main lesson for creditors and benefit for debtors is that confirmed Chapter 13 plans are binding even if there are procedural irregularities. This is good for us!

Here are the six options available for handling secured collateral in Chapter 7:

1. Surrener - This option is nice if you just want to walk away and owe nothing, but obviously could be a problem for those that want to keep it. Most lenders will repossess the car after discharge if you are not current, but if you are lucky they will never formally demand it or try to pick it up.
My experience is that lenders never formally demand possession they just send out crooked repo men to pick it up. You do not have to give your vehicle to a stranger. Only in smaller counties including Brazoria have I seen them get a court order for possession and sent out the Sheriff or Constable, but in the rare event that they do you do have to surrender the car to a law enforcement officer. How do you know that the tow truck driver is not an impostor with a tow truck? Many of them have felony convictions. Adding insult to injury these people often pretend to be law enforcement using titles like Seregeant or Investigator. They will claim they are investigating a "theft" "civil theft.". This is a scam on their part. Ask to have the name and telephone number of their supervisor.
They cannot take the car if there is a passenger in it and in Texas they cannot cause a breach of the peace so they cannot break into your garage but they may pick it up from your driveway.
If this does not appeal to you then read the other options!

2. Redeem - Is a great option if you are upside down on a secured personal property. You pay a lump sum equal to the value of the collateral from yourself or anybody or get a loan from Redemption Funding Inc in Sweetwater, Tennessee (423) 337-7572. This works best for upside down loans. The interest rate will be higher, but it's worth it if you save enough money. The application is on my website at www.sabkr.com/redemption.htm

3. Reaffirm - This choice is bittersweet because you are giving up the discharge of that particular debt in your bankruptcy. Lenders will try to coerce you into this option. They say they require reaffirmations but most do not enforce it. The bankruptcy code does say that if you fail to redeem or reaffirm within a certain time then the automatic stay lifts and they are free to pursue a bankruptcy default clause.

4. Reaffirm and Rescind - You have the right to rescind a reaffirmation agreement anytime before discharge or within 60 days whichever is later. Although the courts have not authoritatively stated whether you are protected if you rescind a reaffirmation it is likely.

5. Reaffirm and Argue to the Judge to not approve the reaffirmation - Is this option ethical? If you do it right I think it is but you need to discuss this carefully with your attorney. If your attorney believes that the reaffirmation poses an undue hardship on you it has to go in front of the judge. Even if you want to reaffirm your attorney is duty bound to not sign off and tell the judge that he or she believes you cannot afford it if that is the case.
If the judge fails to approve it then you are probably protected and can just keep making the payments and ride thru!

6. "Ride Thru" or Keep and pay and not reaffirm - If the lender does not object this is the best option if you are not seriously upside down. You keep up the payments but cannot be sued if you default or the car is totalled. You can walk away from it at any time and all they can do is repossess it. Ford Credit and GMAC/Nuvell and some greedy credit unions will actually repossess your car if you try this. I argue that if the lender accepts payments after the bankruptcy filing they have waived the default caused by your bankruptcy. We will see if I have to ever litigate this issue.

Whichever option you chose you need to discuss this carefully with your attorney. There are a lot of considerations to take into account.

Mark Zandi, Chief Economist at Moody's Economy.com and former advsier to presidential candidate John McCain said today that the foreclosure prevention intiatives have been ineffective and that we will see more foreclosures in 2010, on C-SPAN at a forum by the Urban Institute. He also said that this will cause a drop in home prices.

Additionally Zandi also said the overalll outlook for the econony is not good. My opinion is that Zandi is right. The press and the politicians have been trying to convince us that things are getting better while we all see that things are getting worse. Zandi is courageous to tell the truth that things are not getting better and that these so called mortgaqe modification programs are not accomplishing anything. It is time that Congress give bankruptcy judges the power to modify home mortgages of debtors' primary residences.

Many of us tithe to our churches and give money to the Red Cross such as for Haiti earthquake relief. The good news is that the Bankruptcy Code protects these donations as long as they are 15 percent of your annual income or less.

As long as your donation is to a religious or charitable non-profit organization it is protected in several ways. In Chapter 7 it does not count against you on the means test, it will be deducted from your "disposable income" as long as you intend to continue the donations every month.

A Chapter 7 trustee also cannot void charitable gifts with the 15 percent limitation. In Chapter 13 you can continue to give up to 15 percent each year during the case and it cannot be held against you. It should be listed in your budget. In short continue exercising your faith and enjoy the pleasure of giving. It is better to give than to receive!

Most consumer bankruptcy attorneys do not understand Chapter 11. Most of our cases are Chapter 7 or 13, but there are sometimes that Chapter 11 is the best choice.

The most common use of Chapter 11 for indvidual debtors whose debts exceed the approximately $1 million secured and $336K unsecured Chapter 13 debt limits. Those above these amounts who have a business or other non-exempt property cannot do Chapter 7 or they will lose it to the Trustee.

While Chapter 11 is expensive if done right it can provide you with some incredible benefits. One of the best advantages is that you can take more than five years to pay off your creditors. Another is that you can cram down vehicles even if you have not had them for 910 days.

Finding the right attorney is hard. I represent Chapter 11 clients and I will consider taking your case even if you live outside of my area. Feel free to call (888) 305-1919 to make an appointment.

I will be on CNN Radio, 9 am CT, this Saturday, on Bankruptcy and Credit Scoring. Tune in at www.cnn650.com or 650 AM in Houston.

Recent hotel industry association figures released the other day indicate a 17.5 percent drop in revenue per available room. It is very hard to believe the reports of a rebound when you see such numbers. Frankly there are no credible signs of a rebound.

 Until Congress comes up with a real fix for the mortgage crisis and passes the mortgaga nodification bill, things will just get worse. Right now all they seem to do is to throw money at failed businesses.

 Since there is no immediate relief in sight for the economy, bankruptcy filings will continue to rise. Those who still have jobs but are susceptible to layoffs may want to make plans for what they would do if they lose their jobs.