Los Angeles (CNN) -- Dionne Warwick, one of the most recognizable pop voices of the 1960s, filed for bankruptcy last week, citing more than $10 million in tax debt dating back to 1991.
"Due to several consecutive years (the late '80s through the mid-'90s) of negligent and gross financial mismanagement, Dionne Warwick has realized the current necessity to file personal bankruptcy," Warwick publicist Kevin Sasaki said in a statement to CNN Tuesday.
Warwick, 72, made hits out of many Burt Bacharach and Hal David songs, and won five Grammys in a 50-year career. The singer is down her last $1,000 in cash and only owns furniture and clothing worth $1,500, according to the Chapter 7 filing in New Jersey.
This just shows that no one is exempt from financial problems in this difficult economy.
Bankruptcy filings plummeted 21 percent in Broward County from a year ago while they only declined 6 percent in Palm Beach County and basically stayed the same in Miami-Dade, according to U.S. Bankruptcy Court statistics released Friday.
It's another sign that Broward's economy continues to improve while Palm Beach County's moves a bit slower and Miami-Dade's continues to stall, said Jorge Salazar-Carrillo, an economics professor who directs the Center of Economic Research at Florida International University.
"Something is working in Broward in attracting new business," he said. "Job creation has continued in Broward but stopped in Miami-Dade and slowed in Palm Beach County."
That has affected many consumers in Palm Beach and Miami-Dade counties struggling to find work to pay bills, Salazar-Carrillo said.
The unemployment rate for Broward was 6.7 percent in December, almost 2 points better than it was a year ago and one of the better rates in Florida, according to the latest state data available in January. Meanwhile, Palm Beach's was at 8 percent after being at 9.8 percent a year earlier, the Florida's Department of Economic Opportunity reported.
Looking ahead, the number of bankruptcy cases may go up later this spring throughout South Florida because some people are waiting to file until after they get their federal tax refund checks.
See the entire article by Donna Gehrke-White at http://www.sun-sentinel.com/business/fl-bankruptcy-broward-20130301,0,3491962.story.
NEW YORK (CNNMoney) Americans saw their income drop so dramatically in January that it marked the deepest one-month decline in 20 years.
Personal income decreased by $505.5 billion in January, or 3.6%, compared to December (on a seasonally adjusted and annualized basis). That's the most dramatic decline since January 1993, according to the Commerce Department.
It's something of a combination of one-time events, though.
Monthly income was unusually high in December because companies paid out early dividends to avoid upcoming tax hikes. Companies like Wal-Mart, Oracle and Costco paid special dividends to their shareholders at the end of 2012, instead of waiting until 2013.
The expiration of the payroll tax cuts also played a role in January's drop, because most workers have to pay 2 percentage points more in taxes this year. The Commerce Department's "personal income" calculation subtracts out individuals' contributions to government social insurance programs like Social Security, which are funded by the payroll tax.
Excluding those special factors, the Commerce Department estimates that after-tax income actually increased 0.3% in January.
If the Mortgage Forgiveness Debt Relief Act of 2007 does not get extended by Congress by the end of the year, homeowners may have to start paying income taxes on the portion of their mortgage that is forgiven in a foreclosure, short sale or principal reduction.
That means if someone owes $150,000 on their home and it sells for $100,000 in a foreclosure auction, they could owe taxes on the remaining $50,000. For someone in the 25% tax bracket, that would mean paying $12,500 in taxes on the foreclosure. Similar taxes would apply for amounts that were forgiven in short sales and principal reductions.
"Allowing the act to expire would harm these families and their communities and it would run counter to current loss mitigation efforts," wrote Tim Pawlenty, president of the Financial Services Roundtable, Mike Calhoun, president of the Center for Responsible Lending, and John Dalton, president of the Housing Policy Counsel in a letter to the Senate Finance Committee.
So far, though, very little has been done to extend the act as Republicans and Democrats continue to butt heads over the fiscal cliff. Note, however, that other options my still exist to avoid this tax. A bankruptcy filing discharges the debt, thereby preventing the bank from foregiving the debt.
WASHINGTON (CNNMoney) -- The U.S. government sued Wells Fargo over claims that the bank made reckless home mortgage loans for a decade. In a lawsuit filed Tuesday in Manhattan's Southern District of New York, the government accused Wells Fargo of "reckless underwriting" and fraudulently approving thousands of home loans that caused large-scale losses for the government. The Federal Housing Administration paid out millions of dollars in insurance claims on defaulted loans that were falsely certified by Wells Fargo, according to the complaint.
The complaint said the "extremely poor quality of Wells Fargo's loans was a function of management's nearly singular focus on increasing the volume of FHA originations -- and the bank's profits -- rather than on the quality of the loans." The bank made the violations worse by "hiring temporary staff to churn out" those loans.
We see this development as increibly ironic as we have been complaining about Wells Fargo's actions in the bankrutpcy arena where it claims to be policing accounts for the court. Just today I received one of Wells Fargo's now infamouns letters advising that they had frozen a customers bank account withour first reviewing the bankruptcy file. The letter states, "Wells Fargo Bank, N.A. ("Wells Fargo") has received notification of your client's bankruptcy filing. Wells Fargo is required by operation of Section 542 of the Bankruptcy Code to act in good faith to prevent the payment of pre-petition debts from a non Debtor in Possession account." Section 542 does not require a bank to unilaterally freeze an account and no other bank takes this kind of action or thinks that it is the 'Bankruptcy Police'. In the past we have had cases where Wells Fargo froze an account of a completely different entity other than the debtor by mistake, another where it bounced the check the Debtor had written to the Chapter 7 Trustee, and another where it bounced the check written to a Debtor in Possession account. Maybe this new development will cause Wells Fargo to focus on more relevant issues such as addressing the damage it has caused to so many families.
Many of those living in the Miami-Fort Lauderdale area are heavily in debt, concludes a new survey published in the Sun-Sentinel. South Floridians owe -- a lot -- on car, home and student loans. The average South Florida mortgage balance is more than $30,000 higher, for example, than the average U.S. home loan balance, according to a report released by Credit Karma, a consumer website.
One reason is that South Florida has a higher cost of living than some other parts of the country, said Kenneth Lin, CEO of Credit Karma. Many South Floridians also bought homes a few years ago when prices were inflated during the housing boom, said Lin. Some are now stuck with high mortgage balances, he said.
The average South Florida balance on home loans is just under $200,000 or 19 percent more than the national average of $166,990, according to Credit Karma. The website also found that many South Floridians have taken out a large amount of student loans. The average student debt balance in South Florida is at $32,330 or 11 percent more than the $29,092 national average, Credit Karma reported.
Even the money owed on car loans in Miami-Fort Lauderdale tend to be higher than the national average: $16,411 vs. $15,986.
However, there is a bright spot: South Floridians continue to pay down their credit card debt with the average balance down 14 percent or $775 less than a year ago, according to a survey.
Bankruptcy filings were down 8% in 2011 compared to 2010, the highest year for filings since the reform of the Bankruptcy Code in 2005. Despite predictions of increased activity in 2012 due to increased foreclosure filings, South Florida saw a 10% in filings during the first four months of 2012 compared to 2011. There was a good article by Marcia Pounds in the Sun-Sentinel recently at http://www.sun-sentinel.com/news/palm-beach/fl-bankruptcies-september-20121002,0,6585946.story in which i was quoted.
We have also seen a decrease in filings in our office for Chapter 7s and Chapter 13s. We don't believe that is due to any improvement in the economy, as our clients are not reporting any improvement. We believe the banks were holding back on foreclosure filings due to backlogs, increased filing fees and other reasons. We also have many clients waiting on mortgage modifications before filing.
12-4-12 See the more recent Sun-Sentinel article on the continuing decline in filings and anticipated increase at http://www.sun-sentinel.com/business/blogs/money-sense/sfl-bankruptcies-fall-20121204,0,2006359.story.
NEW YORK (CNNMoney) -- Foreclosure filings rose in August as lenders in several states continued to work through a backlog of delinquencies and defaults, according to an industry group's report Thursday.
Foreclosure notices -- including default notices, scheduled auctions and bank repossessions -- were filed on 193,508 properties during the month, an increase of 1% compared with July, according to RealtyTrac, which markets foreclosed properties. But filings were still 15% lower than the year-earlier period.
"Bucking the national trend, deferred foreclosure activity boiled over in several states in August," said RealtyTrac vice president Daren Blomquist.
The foreclosure hot spots have been shifting. Filings are rising in "judicial states" such as New Jersey, New York and Maryland, where the foreclosure process goes through the courts, and falling in "non-judicial states" such as California, Arizona, Nevada and the District of Columbia, where they're handled by a trustee, usually a title company. Florida is a judicial state.
NEW YORK (CNNMoney) -- Hostess Brands, the maker of Twinkies and Wonder Bread, said Friday that it would seek a court order to force a new contract on one of its unions and stave off its demise.
The announcement came after one of the company's major unions, the International Brotherhood of Teamsters, voted narrowly to accept the proposed agreement. The other -- the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union -- rejected it, Hostess said.
Hostess now plans to ask a bankruptcy judge to force the bakers' union to accept the new contract, allowing the company to avoid closing its doors and facing liquidation.
"Our only option to save Hostess, preserve jobs and avoid liquidation is to amend our labor agreements," Hostess CEO Greg Rayburn said in a statement.
Hostess employs roughly 18,500 people. Among the changes the company is seeking with the new agreement are a reduction in its pension obligations and a 17% cut in its contributions to the employees' health care plan, a Hostess spokesman said.
BankAtlantic Bancorp Inc. (BBX) (BBX) and its chief executive officer lost a bid to dismiss a Securities and Exchange Commission lawsuit alleging they misled investors about the extent of the losses the bank was facing because of a troubled loan portfolio.
U.S. District Judge Robert Scola in Miami ruled today that the SEC can proceed with allegations of disclosure fraud and misrepresentations or omissions in earning statements and investor conference calls. He dismissed parts of two of seven counts in the lawsuit against the bank and CEO Alan Levan, while giving the agency permission to amend its complaint.
“Viewed as a whole, these allegations go beyond severe recklessness and touch upon intent to deceive,” the judge wrote in reference to one count that survived his review. “The court finds that the SEC’s allegations sufficiently raise a plausible inference that Bancorp and Levan made misrepresentations and omissions of material fact by the alleged failure to reclassify and write down certain loans‘‘ in the portfolio.
The SEC said in its January complaint that BankAtlantic and Levan made misleading statements in public filings and earnings calls to hide losses on the Fort Lauderdale, Florida-based bank’s commercial and residential land holdings and improperly recorded loans they were trying to sell from the portfolio in late 2007.
According to the agency, Levan knew that a large portion of the portfolio, which consisted mainly of loans on land intended for development into single-family housing and condominiums, was worsening in early 2007 as borrowers struggled to make payments. In the first two quarters of 2007, BankAtlantic made only general warnings about risks related to Florida’s real estate market and failed to disclose the downward trend already occurring in its portfolio, the SEC said.