Debt Free

These days times are tough and probably no one is experiencing that more than small business owners. According to the 368 page SBA report on small business released in December of 2007, there are over 6 million non-farm small businesses. That means well over 6 million of you out there are small business owners. Because so many are owned by more than one person, it's probably closer to 10 or 12 million.

Many of these entrepreneurs are constantly operating on the ragged edge of profitability and trying to keep their heads above water, so uncollected accounts can threaten their very existence. Few small business owners have the expertise, time or temperament to be effective debt collectors and yet allowing the debts to remain uncollected can sink their ship. Speaking from past experience, the financial stress of irregular cash flow can keep you awake at night, especially when you're staring payroll in the face. One position you never want to be in as a business owner is having to tell your valued employees that they'll have to wait to deposit their paychecks.

In the majority of cases, the cash flow problems are created by debt you can't collect in a timely fashion. Late and delinquent payments will ruin your cash flow. You may be profitable on paper, but your accounting won't pay your bills, only an influx of cash can do that. As a business owner there are times when you may have to hold your own paycheck in order to pay your employees. That doesn't go over too well on the home front, I can assure you.

You have some alternatives. You can just hope your accounts will pay, which sometimes just isn't very realistic. After all, in many cases your accounts are other small business owners just like you, and they're having their own financial problems. You have to make sure paying you becomes one of their top priorities. When cash gets tight, most business owners will pay their employees first, then the lease, and then vendors and other debts. Key vendors get pushed to the front of the pay line, while less important vendors are moved farther back.

If you don't have the skills to get your account moved to the front of the payment priority line, you'll need to hire someone who does. As I mentioned before, that expertise can come with a hefty price tag. An alternative is to use one of the online debt collection agencies that have come with the dawn of the Internet. For many of the same reasons other industries can become low cost service providers by becoming virtual, so can debt collection agencies.

This alternative can offer some advantages to you as a business owner. Typically the cost will be lower than a traditional debt collection agency, which helps preserve much need cash for you. In addition, you will usually have to pay no up front fees, which you may be in poor position to do. Basically the online agency will send collection letters from an official source for a set fee per letter, typically from $5 - $30. As you may have noticed, that's far lower than the 30% - 50% fee you may face when using a traditional debt collection agency. To be fair, a traditional agency will normally have a larger breadth of services available than does an online collection agency. For example, they may add phone calls to their repertoire.

You can have the entire process handled by an online debt collector, which could provide you with substantial cost savings. If they are unsuccessful you will have lost only a very small amount, and can turn to more traditional agencies. If they collect your outstanding debt, the money will be sent directly to your business. You will have much needed cash and can concentrate on what you really want to do, running your business, not collecting debts.

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Is silver investing worthwhile, or are all the gold talkers right? Currently, silver is sitting at $16.96 an ounce, while gold is at $889.70. That doesn't mean, however that gold is a better investment. Actually you could have made impressive gains in through silver investing over the last 3 years. As with many commodities, silver has been in high demand because of various world economic factors, causing prices to skyrocket (investment cliche number 307).

For much of 2005, silver hovered in the mid $7.00 range. In August of '05 it briefly dipped back into the $6's, where it had spent most of 2004, before starting a nice climb, culminating about 22 months ago, when it reached $15/oz in mid may of 2006. Subsequently it gave much of those gains back, falling to $10 by mid June. Since then silver has been pretty generous, see-sawing itself up to it's present level of almost $17.00. Actually Silver reached a peak of just over $21 in mid March, only to lose 25% of it's 3 year run and land at it's current value. So, in 3 years you would have seen roughly 242% gains in a silver stake. How does that compare with the talk show darling, Au?

In April of 2005, Gold was sitting right about $440/ oz. It was flat for the first portion of the summer of 2005, actually declining to about $425 by early June. It then started a rise roughly parallel to that of Silver, growing to $750 by mid May of 2006, before dropping back to $575 by mid June. Since then, like silver, gold has risen nicely. The exception is that gold reached a peak of just over $1,000 an ounce in mid March of this year before giving back about 20% of it's 3 year gains to land at its present value of $889.70. This equates to a gain of roughly 202%, impressive, but less than the over 240% gains posted by it's ugly cousin from Nevada.

What are we likely to see from silver investing in the future? Silver has historically been in high demand, and in the past traded at about 1/10^th the price of gold. In the early 1980's it even rose to almost $50 an ounce (not adjusted for inflation). Like many other commodities, volatility is the order of the day. Investing in precious metals is not for the faint of heart, but is often used to diversify a portfolio and protect against losses in the stock market. This is because many of the things that cause stocks to rise or fall will stimulate the opposite result in precious metals, as investors tun to alternative places to rest their capital.

One thing about investment in precious metals or any other commodity is that while prices can see precipitous drops, they will never decline to absolute zero, as can happen with stocks. If a company goes out of business, it's stock will be worthless, while a commodities stake will never experience a decline all the way to nothing.

One of the most powerful factors stimulating prices is expected future demand. Nothing causes bidders in the commodities pits to ratchet up prices more than either the fear that something will be unavailable, or that demand will grow enough to outpace supply.

One of the largest uses of silver today is in the electrical switch contacts of small appliances and consumer electronics components. Silver is also used in appliance in other interesting ways. Because silver has bug killing properties, it is now being used in washing machines, air conditioners, and toilet seats to kill germs. As developing nations demand more and more such trappings of 21^st century success, we'll have to pull more silver out of the ground to supply raw materials for them. Another popular use of silver is for the rear window defroster conductors in vehicle defrosters. Again, look to China to cause demand to grow here.

One place where the use of silver will be on the decline is in photography, where 24% of the world's silver was used in 2001. Since most of pics today are printed using ink jet and dye sub printers, rather than developed on traditional film, this use of silver will taper off.

Due to the many uses of silver in industry, jewelery and economic conditions such as inflation and uncertainty in the middle east, silver could be a nice addition to one's portfolio for the near term. Pressure on the dollar, recent rises notwithstanding, could help to drive the price of silver even higher. Many of these conditions were the same as were seen 30 years ago, when silver last experienced a huge price run up. Just remember that prices eventually came back down to earth, so if you are going to try your hand at silver investing, keep both hands on the wheel.

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Tax Return Question 1–
What should I do if I think I made a mistake when I filled out my return?

Mistakes on returns happen all the time. The IRS has provisions for just such an event. You’ll have to spend 6 months in jail, do 150 hours of community service, and pay a 50% penalty on any taxes owed. Just kidding. Actually the IRS recommends that you fix the mistake by filing a form 1040X. This is an amended return that you’ll use of you forgot to report all your income or claim a credit. You have up to 3 years after you filed your return to file this form, so there’s no rush.

The IRS reports that most math mistakes are caught when processing the return. If the processors have more questions or something is missing, don’t worry, they’ll contact you.

Tax Return Question 2 -
What if I made a mistake on my return, I’m getting more money back than I should be, and I’ve already sent me the check? I don’t want to be visiting Wesley in jail for a few years. What should I do? Fear not, tax payer. The IRS has you covered. If it was a math mistake, see answer number 1, above. If it was a mistake in the amount of reported income, you simply use the same form 1040X and send it back with the un-cashed check.

What? You say it’s too late, you already cashed the check and bought a new Ducati to ride for the summer? Well, in that case, you have to file the 1040X ASAP. Include a check or money order payable to the Internal Revenue Service for the amount you borrowed due to your error, and pray repeatedly that that settles the whole matter.

Tax Return Question 3 -
What do I do if I received a 1099 form, but I’m not self employed and I don’t have a business license? What do I do about this? Unless you can prove you actually were an actual employee of whoever sent you the 1099, you’ll have to fill out a 1040 schedule C and report your income from the 1099. In addition, you will need to fill out a form 1040, schedule SE to report your self employment tax. Self employment tax is basically the matching part of your Social Security that your employer usually pays.

One thing to know about fixing mistakes with the ‘1040 X’ form is that these forms can’t be filed electronically. You have to actually fill them out with a pen, put them in an envelope and use the old fashioned mail, if you remember how.

Tax Return Question 4 -
How do I find out what has changed from last year? IRS forms have a “what’s new” section in their instruction books. They will have a list of all changes from the previous year.

Tax Return Question 5 -
I can’t pay the taxes I owe. What do I do now? You might try calling Wesley’s legal team. After all, they got him off on most of the charges. Seriously, you have alternatives if you just can’t come up with the money the Feds are looking for. They will allow you to pay with a credit card. You can also make payment arrangements with the IRS. I went over this in my post on what to do if you can’t pay your taxes.

Tax Return Question 6 -
If you’re a student, do you have to file a tax return? It depends on how much money you earned, and if you can be claimed as dependent by another tax payer. You’ll be a‘filin’ if you are a dependent and:

1.      Your unearned income was more than $850.

2.      Your earned income was more than $5,350.

3.      Your gross income was more than the larger of —

a.       $850, or

b.      You earned income (up to $5,050) plus $300.

Students, you should note that many fellowship grants and scholarships are considered taxable income by the IRS, so they’re not as free as you first thought.

It’s pretty common to have questions when you’re filing out or filing your tax return. That’s why we in the U.S. have an entire industry dedicated to helping you out in this endeavor. It helps explain why franchises such as Liberty Tax Services (started by Jackson Hewitt alum John Hewitt) have grown to over 1,700 locations in only 7 years, and H&R Block had revenues of $4 billion in FY 2007.

So, if you have tax return questions, don’t feel bad. If you can’t find answers here, check the FAQs at the IRS website

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A foreclosure is a proceeding that occurs when a mortgage loan is in default. Default means that the lender hasn't received a payment on the loan for a specified time period, usually 30 days after the payment due date. Typically the borrower will be assessed a late fee after the first 16 days with no payment, but the loan will not actually be declared in default until the 30 day mark has been reached.

The First 30 Days of the Foreclosure Process
Once the mortgage is in default the lender will make attempts to collect the past due balance, normally by initiating a series of phone calls to the borrower. You will also get one or more late payment notices sent by mail from your lender. Be aware that as soon as the 30 day period is reached and collection proceedings begin the lender will begin to assess additional fees and charges for collection and legal proceedings. This means that not only will you owe the past due balance on your mortgage, you will also have to contend with late fees, collection charges, and possible legal bills.

The Second 30 Days of the Foreclosure Process
The second 30 days with no payments received is where the foreclosure process begins in earnest. The lender will send a formal notice of default. This is usually done by certified mail. The notice of default will demand payment in full for the amount the loan is in arrears and any outstanding fees and other charges. There will be a specified time period by which the mortgage must be made current. Some lenders will accept partial payments, while others will demand payment in full. Many mortgages have an acceleration clause that allows the lender to demand full payment once a certain number of payments have been missed or amount time has passed with no payment being received.

This is when the lender will pass the defaulted mortgage from their collection department to their legal department. This means that you will owe even more fees before your mortgage will be considered current again. The purpose of sending the defaulted mortgage to the legal department is so that formal foreclosure proceedings can begin.

The Third 30 Days of the Foreclosure Process
The lender's legal department will forward the information associated with your mortgage to an attorney that will begin the actual legal foreclosure proceedings. Specific things must happen once this stage is reached. A notice of the impending foreclosure must be advertised in a public place, such as a local newspaper. You will get a Notice of Intent to Foreclose by certified mail.

There will be a court hearing to determine the validity of the lender's claim of non-payment. If their claim is upheld by the court, the lender will be permitted to foreclose on the property. A date for the foreclosure auction is set. At this point in the process another notice will be advertised, this one of the actual foreclosure sale of the property.

It is important to realize that you are not legally compelled to move out of your house at any point in the foreclosure process. Only after the property has been sold at auction will you receive a formal notice of eviction. This notice is normally sent within 72 hours after the sale. If you fail to abide by the notice, you can be forcibly evicted by the sheriff's department. In some cases the new owner will allow you to pay rent in order to remain in the home for a longer period of time. If you fail to move, eventually the sheriff will evict you by force and you can be arrested. This can take 6 – 10 weeks from the time you are sent the formal eviction notice, but in some locations can be as little as 1 week. Normally the new owner must go in front of a judge to actually have you evicted from his new house, but you can appeal the decision, granting you even more time.

The most important thing you can do to avoid such unpleasantnesses is to never let it get this far. Do not ignore the lender's communications. They will have little to gain from beginning the foreclosure process against you. They're a lender, not a real estate company. See my previous post on how to avoid foreclosure for more on how to keep your home.

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Actually yes, there are debt relief programs that can help you do that, but it's not really that simple. After all, you don't get something for nothing, although it could be argued that if you get a portion of your debt eliminated, you actually did.

There is some confusion among many debtors about the differences between the various debt relief programs. Are debt settlement, debt relief and debt counseling all synonymous? Actually no, they're not. They actually mean different things, and if you choose to avail yourself of one of these options to handle your debt, the option you actually choose could have long lasting effects on your credit and future financial picture.

Debt settlement is a term that most often refers to the process of negotiating with creditors to only repay a portion of a debt. Although that may sound like a fantastic option to many creditors, remember the whole free lunch thing. Using debt settlement services will impact your credit in a negative way and affect your ability to secure future credit, and the interest rates you pay for years to come. There are a few basic ways that these programs work, and before you enter into any such program you absolutely must go over any agreement with a fine toothed comb, preferably with the advice of an attorney who's well versed in such matters. It may seem like spending money to seek the advice of an attorney may just be compounding your debt problems, but a few hundred dollars up front may save you thousands of dollars and some financial migraines later.

Some debt settlement firms will simply charge you a flat fee for their services, but the more common scenario is for them to charge you either a percentage of the total outstanding debt or a portion of the savings they provide through the negotiated settlement. With most debt relief negotiations, the debt relief company will negotiate a settlement with each of your creditors that will represent between 40% - 50% of the original debt amount. They must negotiate independently with each credit card account. Debt relief companies can handle other types of debt as well, but credit cards are far and away the most common. Typically only unsecured debt is negotiated through this process, as unpaid secured debt will be satisfied by the creditor repossessing the security for the debt, such as a vehicle or land.

As the debtor, you will be required to set up a debt repayment plan for the agreed upon amount with each open account. This will include the payment to the debt relief company, the creditor, and the time frame for the repayment plan. You will then make payments either into an account set up by you, or an escrow account set up by the debt relief company. Once you have accumulated the requisite amount your debt will be satisfied. The process repeats with each debt until all your debts are paid at the individually agreed upon amount.

This is one of the places where things can go wrong for you as the creditor. Stories abound of less than scrupulous debt settlement companies simply keeping all the funds you've already paid should you miss a payment. This does happen, and needless to say that could cost you a bundle. If you feel that you realistically will not have the money to maintain such a settlement plan, you may want to consider another option, but even more important is to thoroughly evaluate any such agreement before you enter into it.

This highlights the importance of having a qualified, independent party look over the contract before you sign it. If you sign a contract that permits the firm to keep any funds paid to date should you miss a single payment, it's really your fault for such a debacle. If you feel such a clause is worth it in order to secure a substantial reduction in the amount of your debt, that's a decision only you can make. Remember that you will have your debt reduced a substantial amount, but there is also the debt company's fee to consider when calculating your total savings. In total, the savings may not be as large as you think.

The process lasts from 1 – 4 years in the majority of cases. It is exceedingly rare for the debt relief company to offer any sort of guarantee for their services. The key is that you should be using this technique as a way to avoid bankruptcy.

Debt Settlement Pros -

• Debt settlement / relief / negotiation can help you avoid bankruptcy.

• Debt relief companies can make creditors stop hounding you.

• Debt relief companies can get you debt free in less time than if you simply tried to repay your debts on your own.

• Debt relief will improve your credit in the long term because you will have no outstanding debt. It's up to you to stay debt free, however. Since about 30% of your FICO score is your amount of outstanding debt, reducing it to zero will improve your score.

Ah, but with anything there is also the not-so-bright.
Here are the -

Debt Relief Cons -

• Debt relief will give you a big drop in your credit score in the short term, however it will not be as bad for your credit as declaring bankruptcy.

• Debt relief programs require you to pay as agreed. If you fail to stick to the debt relief plan, you could lose every cent you've paid to date. Think of the rent to own scenario. Miss a payment, and there goes your TV. If you don't have the requisite amount of money in a single lump sum, it's time for some negotiation of your own. Before you enter into the debt relief arrangement, have the contract stipulate an installment payment system.

• You will owe more taxes to the IRS and possible the state department of revenue. In a spectacular example of hitting you when you're down the IRS views forgiven debt as taxable income. For example, that means that if you are in the 10% tax bracket and owe $18,000 in credit card debt, of which $9,000 is forgiven through the debt relief settlement, you will incur a $900 income tax liability. This will be reported to the IRS with a 1099 form. If you've ever been an independent contractor, you'll be familiar with such a form, as it's the same one used by those that hired you to report the income they paid you. Make sure you figure the increased tax liability into your calculations when deciding to use a debt relief or settlement company's services. This is an area where consulting a professional is vital, because you may be able to eliminate all your tax liability due to your financial status.

• The same process used by the debt relief companies to make the credit card companies stop hounding you, will also prohibit them from contacting you for anything positive. You may be able to do some debt negotiation on your own, but try this before you make the decision to use a debt relief company, because they will probably prevent the creditor from initiating any further contact with you.

Debt settlement or debt relief is not the same thing as credit counseling. Credit counseling is usually a precess whereby you meet with a person or team who looks at you financial state and makes recommendations about how you can improve it, and get debt free. There are for profit and non profit credit counseling services, although the non profit services are not necessarily free. See a post I did last year on non profit credit counseling for more information. It details 6 questions you must ask a credit counseling service to help make sure you're making the right decision.

Your credit is nothing to mess around with. There are pros and cons to any decision and the decision on weather or not to use a debt relief company as a solution to your financial problems is a mighty big one. They may be just the solution you've been looking for. On the other hand they could plunge you deeper into a financial pit of despair. Just make sure you go into a debt relief agreement, as with any of life's big decisions, with both eyes open. Don't make such a decision on emotion. To help avoid an emotion based decision it's sometimes better to take a few days to make your decision.

Here's to getting debt free, no matter what plan you use to get there.

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Mutual funds are available from most of the major investment houses, such as Fidelity, Janus, Vanguard, T. Rowe Price, and many others. Typically, mutual funds are managed by a fund manager, whose responsibility it is to insure that the fund's return to investors is as high as possible. Ostensibly an investment professional with years of experience, backed by a team of researchers, and powerful software would be able to do this with no problems.

However, the dirty little secret of the mutual fund world is that many mutual funds do not outperform the market as whole over the long term, which is how most funds are used. Active investors who trade stocks on a regular basis tend to prefer individual equities. They may still hold mutual fund shares, but most of these will be used as buy and hold type of investments.

There are several broad classifications of mutual funds, which roughly describe the types of companies they invest in. Which funds you choose to invest in, if any, will be determined by your investment objectives. If you're investing for retirement that's a long way off, you'll pick different funds than if you are investing with an eye to receive regular income from your investments.

Sector funds concentrate their investments in a single industry or a group of tightly related ones.

Growth funds invest in companies who are, in the opinion of the fund's management, likely to experience rapid growth.

Index funds track market indices, such as the S&P 500, Dow Jones, Wilshire 5000, or NASDAQ composite index. These tend to not be actively managed, so in theory these funds have lower expenses than other classes of funds.

Balanced funds - A fund composed of a mix of equities (stocks) and debt (bonds). In theory stocks and bonds tend to cycle roughly inversely to each other, so a balanced fund can help diversify risk.

Income funds – Income funds are targeted at maximizing dividend income within the fund's objectives. These types of funds tend to have a lower volatility (smaller price swings) than growth funds.

Emerging Market funds – This type of international mutual fund concentrates on equities of companies in rapidly growing foreign (to U.S. investors) markets. These have the potential for tremendous growth (the 5-year Lipper average for emerging market funds is around a 200% return), but investing in overseas or Latin American markets can be risky.

Other mutual fund terms to know -
Expense ratio – How much of your money is used to pay the fund's management and administrative fees. An average is between 1% - 2%. These expenses can have a dramatic impact on long term investment returns, so choose carefully.

Load - A fee paid to purchase shares in a mutual fund. Not all funds charge loads. 

A mutual fund is simply fund comprised of a group of stocks managed by someone who knows more than you do about the economy, money management, and certain industries. They're easy to buy and a good way to get into investing for the average person. You can include mutual fund shares in most retirement programs. They are, in fact, a favored vehicle for retirement accounts such as 401k plans and IRAs.

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The divorce rate in America is dropping, and is at its lowest level in years; 3.6 per 1,000 citizens as of 2005, down from its 1981 peak of 5.3 (hey, that's when my parents were divorced). In the year 2000 it stood at 4.2 per 1,000 and in 1995 43 persons were divorced per every 1,000 U.S. citizens . Of course the marriage rate is dropping as well, and you can't have divorce without it. The marriage rate in the U.S. is currently about 7.5 percent.

Interestingly enough, Nevada, the state with the highest divorce rate at 6.4%, also had the highest marriage rate, as you might expect. What is actually interesting though is that, due to the high number of insta-marriages in Las Vegas wedding chapels, the marriage rate in that state is over 60%, almost 9 times that of the U.S. average, but it gets even better. In 1990, the marriage rate in Nevada was an astounding 99%!

Washington DC has the lowest divorce rate in the nation, at 1.7% in 2004. Of course in 2004 Washington DC also had by far the highest murder rate in the U.S., at 3.6 murders per 1,000 residents. The murder rate in DC in 2004 was 3 times that of the next highest state, Louisiana, who was about twice as high as the rest of the country (source - FBI Uniform Crime Reports. ). Is there a correlation between the very low divorce rate and the very high rate of murder in DC? That's a subject for better minds than mine, but it does make you wonder a bit.

Another interesting bit of knowledge is that most of the marriage statistics were gleaned from the U.S. CDC, while most of the divorce stats came from the U.S. Census Bureau.. Why is the Center for Disease Control tracking our marriages?

Okay, so why discus statistics on divorce in a finance blog? Because a large number of divorces either cause serious financial problems, or are caused by financial problems. According to Associated Content, financial problems are actually the most common cause of divorce, with infidelity being only number two. Cheat on me, just don't spend my money without telling me.

Actually the problem of financial problems causing divorce is rooted in differing value systems. In many cases the two spouses have different fundamental beliefs about what's important, and how they should spend their disposable income. In many cases one or both spouses will spend in excess of their disposable income. For example the husband will think nothing of dropping $2,000 on a Browning Cynergy Classic for duck season, even if it goes on a credit card. On the other hand, the wife hits the Paypal account for a few pairs of Linda Pritcher pumps at $150 per.

Both spouses attach little value to the other's purchases, which leads to problems, especially if the new toys contribute to credit card debt. The stress of financial problems is compounded because neither party feels the other's purchases were warranted or have value approaching their monetary cost. Cynthia Cooper, Ph.D, marriage counselor and author says that 43% of married couples have marital spats over money and spending issues.

To avoid this she suggests open and honest communication. If expenses are agreed upon beforehand and both spouses sign off, many arguments and possible divorce can be avoided. Something else suggested by experts in the field is to set a spending limit above which purchases must be approved by both spouses. Below that amount, a set number of purchases may be made every month. If for example, the limit is $50, either spouse can buy one thing a month at or below this limit without getting the other's approval. Above this and both must pre-approve the expense. This goes a long way to avoiding financial problems and stress in a marriage and possible trips to the attorney later, and you know how much lawyers cost these days.

Another helpful tip to avoid financial induced financial stress in your married life is to do the same as many financial experts suggest for everyone; create a budget and stick to it. Having a budget will not only help ease financial stress in your marriage, it can show you where you're leaking financially so you can plug the leaks, and go on to a sounder financial footing.

Hopefully this look at statistics on divorce will help you. If you're one of those who doesn't need the information, so much the better.

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What happens to most of us with regard to how much we'll pay in Federal income taxes if Bush and his tax cuts go sailing off into the pages of history?

First a side note: Government spending is out of control, and has been for some time. Lest you think I'm just a (to use an expression usually reserved for those on the far left) Cool Aid drinker, government spending under the Bush administration has been totally out of control, to the tune of 19.6% in 2006, with a 2.1% budget deficit. In 2000 it was 18.4% of GDP and we had a 2.4% budget surplus. Even more frightening is that according to a CBO report, it's projected to swell to 23.8% of GDP by 2040 and even higher after that. Interest expense will grow to chilling (to our economy) numbers in the future if current trends aren't reversed. Eventually the CBO predicts that interest on federal spending alone will consume a greater amount of the budget in percentage of GDP than our entire budget does now!

Why don't we just surrender all our salaries, wages, and bonuses to the Federal Government and allow them to dole out to us what they feel we “need” to exist on. Oh wait, that's been tried. It was the dismal economic and social failure known as Communism. Hopefully most of you that read personal finance blogs at least aspire to some upward mobility, and aren't satisfied with remaining where you are. Why would you be so fired up to be penalized for working hard and bettering yourselves?

Taxes are a necessity of civilized society. After all, roads, bridges and other infrastructure need to built, and we must defend ourselves, but why should those that actually get up early create the wealth, jobs and technological wonders that allow us to have this level of prosperity be forced to pay for nearly all of it?

When the Bush tax cuts expire in 2010 as they're scheduled to:
Well, the Center on Budget and Policy Priorities reports that extending the Bush tax cuts and AMT relief would cost $4.4 billion. Cost who? Certainly not the tax payer. Sounds like the tax spenders are getting a bit testy, because from where I'm sitting that sound like it would save you and I money. It's all a matter of perspective on whose money it really is, anyway. I guess some feel that because they print the money it's really theirs and they're just loaning it to us. I'll bet that not all of the projected 33 million American taxpayers projected to be snared by the AMT in 2010 feel like they're wealthy. But why reform it? After all, it would contribute to the $4.4 billion that they feel we're not really entitled to anyway.

On the expiration of the “Bush” tax cuts, the tax brackets will change as follows:
Brackets 10, 25, 28, 33 and 35 percent will be increased by 50%, 12%, 10.7%, 9.1% and 13.1% percent, respectively, to 15, 28, 31, 36 and 39.6 percent. Those of you at the bottom of the tax barrel will see a 50% tax increase. Still think that those tax cuts are strictly for the wealthy?? Well, have a nice day then. The child tax credit will be cut in half (damn those wealthy families with children) so in reality, the upper and lower classes benefited the most from the tax changes, with the lower class receiving far and away the largest benefit. Yet, we seldom hear this in our daily news osmosis. The phrase “tax cuts for the rich” has been repeated so many times that the majority of the sheeple simply believe it.

The funny thing is that many of the truly wealthy will be little affected by income tax hikes, because their income is derived from investments (taxed at the capital gains rate), and their property is in trusts, or actually owned by their businesses. The psuedo-wealthy that make $250,000 and up actually pay the vast majority of the taxes, so if you're going to cut taxes, that range offers the largest opportunity to do so. For those of you that think only the rich own stocks, you're wrong. 91 million Americans own shares of stock, thanks largely to 401k plans and IRAs, so boosting the market helps their retirement picture. In fact 90% more people in the bottom 20% of income earners own stocks now than they did 15 years ago.

Finally, do any among you think that as they economy slows it would be prudent to raise taxes? Why exactly would raising taxes (and it's scheduled to be a large raise) help get the economy back on track? Are you sure about that?

The reality is that you can't cut taxes forever and have total tax revenue rise, just as you can't raise them forever and have total tax revenue rise. To low and the reduction in tax revenue will overtake the rise in the economy; too high and the decline in the economy will overtake the rise in revenue. There's a sweet spot in the middle where nearly everyone pays, the economy is suitably stimulated and things get done. Lets find it, without spending so much damn money on bridges in Alaska.

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Posted by debtblog at 02:38 PM | Permalink | Comments (0) | TrackBacks (0)

Don't worry. Just ignore it and it'll go away. Really, just keep quiet, and watch American Idol tonight like you do every Tuesday. There's no need to run to the post office before midnight like all those other suckers. It's an effective strategy used by thousands of American taxpayers every year. The problem for these folks is that it's only effective for so long. The IRS wants their (our) tax revenue, and if you owe some and haven't paid it, they'll eventually come knocking at your door for their cut.

So, that begs the question; “What if I owe the IRS and can't afford to pay?” The number one thing you shouldn't do is ignore the problem. Much like cancer or syphilis, ignoring unpaid taxes will only get you in big trouble. Just ask Al Capone, he ignored both his taxes and syphilis, and look where it got him!

If you genuinely can't afford to pay the entire amount you owe you must contact the IRS. Ignoring them means two things: 1 – You won't get your economic stimulus check this year, and 2, You'll begin to accrue penalties and interest at a frightening rate. Yes, you'll accrue penalties and interest on unpaid taxes even if you do file your return, but at much lower rate. The penalty rate for failure to file is 5% a month of the unpaid balance, up to a maximum of 25%. That's in addition to the interest of 1.5% per month (compounded, and you know the power of compounding. If you don't, just ask Wesley Snipes). Hey, the IRS takes VISA. This is one instance where using a credit card may actually be the more responsible thing to do. The penalty for failure to pay is 10 times lower; 1/2 of 1 percent per month. You do the math on this one.

The IRS wants your money, but they will work out things out for taxpayers who genuinely can't afford to pay. If you have a legitimate excuse, they will be happy to set up a tax payment installment plan, for a small fee, of course! Actually that fee is a one time $105, not a trivial amount, but better than the alternative. You can lower the installment set up fee to $52 by agreeing to have the funds debited from you checking account. To find out more about IRS installment plans and other tax payment options, just check IRS tax topic 202 here.

Posted by debtblog at 01:41 PM | Permalink | Comments (0) | TrackBacks (0)

That means one of two things; either people drive too much, or that they're living on the ragged edge financially and the relatively small increase in fuel prices as a percentage of their overall budget is putting them in the hole. It's possible that survey respondents were taking the larger picture into account, and including the effects fuel prices have on the greater economy as a whole in their fears about gas prices, but I doubt it.

I'll show you how to save gas in a bit, but many people are unaware of just how the price of fuel touches our daily lives. Oil prices have a chance to dramatically impact the economy as a whole, and it could do so even if we still rode horses to the mall for the latest sale at Macy's, and left the Land Cruiser tucked securely in the garage.

Why do oil prices so impact everything we do? Because we use oil for many things beyond transportation, and these other uses of oil touch every aspect of our daily lives. In addition, the use of oil for transportation related purposes goes beyond what you pump into your gas tank. Oil is obviously used for lubricating parts of your car, but it reaches far past the 5W/30 you got at Jiffy Lube last Saturday and the goopy stuff in your wheel bearings.

Just about every plastic part of your car is made from oil. If you've looked at the parts of a modern car recently, you're probably well aware that they have a very high plastic content. Everything from the dashboard to the seat belts, and the intake manifold to the accessory drive belts has a good chance of being made of plastic.

Even the tires you're rollin' on are composed of synthetic rubber, which is made from natural gas derived petrochemicals. I doubt a rubber tree was harmed to make the 275/40-18s that shod those expensive rims, but you can bet that there's part of dead dinosaur in there. Unless your car is finished in polished metal, it's most likely covered in some type of paint, which is made from, yes, you guessed it, oil. Lastly, there's the road itself. Besides the fact that diesel burning machinery was used to actually construct the road, asphalt roads are made from oil and gravel.

As noted above most plastics are made from petrochemicals, which is a fancy name for stuff made from oil. Almost everything in your house is made in some way from oil. The computer you're reading this on; the TV that your kids are watching so you can have the time to read this; the floor your chair is on (even if it's wood, the finish is most likely comprised of oil, smart guy); the paint, plastic, foam, and/or fabric on the chair; the blinds or curtains on your windows; the paint on your walls and appliances, the plastic parts on everything in your home; the water hose in your yard; the pipes in your walls; the vapor barrier that protects your house; the plastic sheeting in your crawl space that keeps out the Radon; the Vinyl siding; the plastic around the windows; the insulation on the wire and cables in your walls; and the shingles on your roof; almost all are composed partially or entirely of oil based chemicals. Many of the cleaning products under your sink are also made from oil too.

That only touches on oil uses in your house. Food prices are dramatically impacted by the cost of fuel and oil. Many fertilizers are made from oil. Diesel is used to run the machinery that plants, tends, and harvests the crops. Diesel runs the irrigation pumps that keep the crops green. Of course diesel fuels the trains and trucks that get that food to the warehouse food store (you don't still shop at the overpriced big-name food stores, do you?) where you can actually buy it. Much of the packaging that the food is in is composed of plastic as well.

The truth is that however much had wringing accompanies gas prices rising at the pump, people would pull their hands clean off if they knew how much we really use oil. The other truth is that we can't just stop using oil, even if we never drove another mile, and it's plain unrealistic to pretend otherwise. We can cut back our use of the stuff however,and the pace that most people can do that the easiest, and with the most potential to save money, is in their vehicles.

How to Save Money on Gas -1
What kind of Gas do You Need?
If you're trading in your ¾ ton 4x4 for something that's a bit more miserly, check to see what grade of fuel it burns. Diesel is now more expensive than gas and it's likely to remain so for the foreseeable future due to the way American refineries are set up, and the increasing demand for diesel fuel in the world. So if you're counting on fuel savings because that E320 BlueTec gets such stellar mileage for a large sedan, remember that you may save on the gallons, but you may not on the total dollars you spend for fuel. The same holds true for gas burning cars. Be aware that some cars require premium fuel to deliver the economy and performance they're capable of. Check the manufacturer's fuel requirements before you buy a car to avoid paying an extra 20 to 30 cents a gallon for premium gas. Many premium and performance oriented vehicles require premium gas as well.

One more thing, that cute, little Smart for 2 is a joke. While it may look like it will save you a huge amount of money on gas, it actually doesn't get very high fuel economy, especially given it's extremely small size. You can get better gas mileage and more utility from numerous other offering from the likes of Toyota, Honda, and VW. If you want to check out a hybrid vehicle from Ford, Toyota, or Honda, you can do even better, but you'll pay a premium at the sales desk, even after you take the tax credit into account, in most cases. Whatever you choose, if you get Smart you'll get better mileage and have room for 4 to boot (but not in it, for those of you in the UK).

How to Save Money on Gas – 2
The largest single impact on fuel economy besides the type of vehicle itself is how you drive it. I regularly exceed 18mpg combined from a V8, 4x4 SUV because I drive like a granny 98% of the time. While that's not what I'd get out of something that was really fuel efficient, I need the space and 4wd capability on a regular basis. Driving to save fuel requires a light foot and careful planning. You must plan ahead to stop, because every time you step on the brake, you're converting expensive gas to heat, instead of forward motion. Let off on the gas pedal well before a stop and gradually apply the brake. The same goes for leaving the stop. Press on the accelerator pedal like there's an orange between the pedal and your foot and the orange is all you brought for lunch. If you crush it, you'll be scraping OJ off your gas pedal for lunch.

Keep your speed low on the freeway, because driving faster does waste fuel, like they told you in the '70's. Personally however, on long trips I'm no fan of the double nickel. The extra time wasted can never be recovered, but I can earn back the extra $10 I spent on fuel driving 75 for 5 hrs. On short trips of 20 – 30 minutes you'll save little time by going faster than 60, but you will waste gas, especially if that's all you ever drive. All that wasted gas going fast on short trips adds up at the end of the year.

How to Save Money on Gas – 3
That brings up something else. Don't take so many short trips. Your car isn't as efficient on short trips because it never gets fully warmed up. It's also worse for the engine, because combustion byproducts don't have a chance to evaporate out of your oil, accelerating wear and tear on your engine. Combine short trips into a longer one hopefully with fewer total stops.

How to Save Money on Gas – 4
If you're stopped at a light for long periods of time, such as longer than a minute, and you're driving a newer car, turn off the engine. You'll save fuel and not emit any emissions while your vehicle isn't running (stands to reason). In Europe, where gas runs $6- $8 a gallon (got to love those tax happy governments), this fuel saving technique is regularly practiced. Don't use this method if you have an older car. They don't have the modern engine and fuel management systems necessary to start rapidly without wasting fuel and increasing start up emissions. You don't want to be that person at the light when your car doesn't start back up in a hurry.

How to Save Money on Gas – 5
Proper maintenance is key to maximize fuel economy and the life of your vehicle. Keep tires properly inflated to the pressure recommended by that sticker inside your driver's door. Make sure your air filter is clean and your oil and oil filter is changed regularly. Make sure your car is tuned up (these days that really only means changing the plugs for many vehicles) at the recommended intervals. These items can add up to substantial savings in the 20 – 30% range over the same vehicle where these things are neglected.

How to Save Money on Gas – 6
Finally, watch where you buy gas and plan your fuel stops. In many locations the price of real estate and regulations is reflected in the price of fuel. Gas stations in more expensive parts of town will be commensurately more expensive to buy fuel in. The same is true for locations with higher fuel taxes. You can often save 20 cents or more at the pump depending upon where you buy your gas.

Use these tips on how to save money on gas to keep your head above water, and if you don't have to, don't drive, although that advice on saving gas has always seemed rather ridiculous to me. Few people I know take trips simply for the hell of it. Most have to actually get somewhere!

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Posted by debtblog at 02:41 PM | Permalink | Comments (0) | TrackBacks (0)

Weather you’re taking about the economy or your hairline, recession is something you’d rather stay away from. In the case recession is a normal part of the business cycle. Normal business is cyclical, going through periods of expansion and contraction. When the economy stops growing, BAM! You’re in a recession.

The normal definition of recession is one of those things that is confusing because, well, there isn’t a “normal definition”. It’s pretty easy to get a fist full of answers on the subject, but they can be distilled down in to basically this:

A recession is when aggregate business activity declines on a national level for two consecutive quarters.

People will argue that although recession can be defined by a two quarter reduction in real GDP, such a definition fails on a couple of points, although a recession by either definition could certainly include a drop in GDP. Some economists feel that the real GDP definition of recession ignores two other large economic indicators; employment level and aggregate income. They also point to sales in the manufacturing and retail sectors as important contributors to overall economic activity that should be reflected in any discussion of recession, and weather or not the nation is in one.

The economists that support the expanded definition feel that it gives a more accurate picture of economic growth and contraction than just looking at the real GDP. For example the GDP could be flat or slightly rising for two quarters as many Americans were experiencing layoffs and others were being shifted into low income jobs. GDP however is a measure of the aggregate dollar amount of goods and services produced. As productivity increases the total value of produced goods could actually rise as other as GDP fell. The reason for the new take on recession is that including the other economic indicators in the definition, along with GDP, helps paint a more accurate picture of recession and weather or not we’re in one.

Is a recession the same a depression? Thankfully, no. A recession is a milder economic malady, and just a normal part of the business cycle.  A depression, on the other hand, is a much more cataclysmic, and fortunately rare, event. One definition of economic depression says that a depression is a reduction of the real GDP by 10%. That’s pretty bad, and it’s a good thing that the U.S. hasn’t seen such a plunge on our output since just before WWII.

There; now you know the definition for recession and why it isn’t a depression. You can start thinking about how to deal with it until the next period of unbridled economic joy.

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Posted by debtblog at 07:42 AM | Permalink | Comments (0) | TrackBacks (0)

The fact is that a relatively short trip in an ambulance can result in a substantial bill, and one that you may be completely unprepared for. I found this out the hard way when my wife required a journey in the siren express a few months back. The bill was about $500, and we live only a few miles from the hospital. Thankfully our insurance covered a large percentage of the bill, but it came as a bit of a shock nonetheless. An ambulance ride is one of the things that the average person doesn’t really think about, even in the context of medical procedures. If you live a long way from a hospital, an ambulance ride can set you back upwards of $1,000.

The fact is that many people are not covered at all for ambulance bills, even if they have medical insurance. It just results in one more large bill at a time when there can be so many of them. The first thing you can do is examine your medical insurance plan to see if it covers ambulance services, and if there are any restrictions. That can be important. Failure to follow the stipulations of your insurance can result in your being responsible for the entire bill, rather than just a portion of it. In addition, when you are selecting medical insurance plans, if given the option, check to see how the coverage varies with regard to ambulance services.

The next thing is to see who you’re riding with. In our case there were two options; the county funded ambulance and a private ambulance service. Both showed up in response to the call. We were unaware of the difference and in the furor of the moment failed to ask for the distinction between the two. It makes a big difference when it comes time to pay the bill. The county service is paid for by tax dollars, meaning we already paid for it through a special property tax. Had I been aware of the difference I would have chosen the county ambulance, which I’m sure is just as fast, and staffed by excellent EMTs, just as the private service was.

You have to check, because the name on emblazoned on the side of both ambulances looks similar. In our case, the county funded vehicle didn’t have the equivalent of “County Ambulance Service” or other such thing on the side. Both names looked like private companies, especially in the heat of the moment, so be sure to ask if you find yourself in a similar situation.

If you have Medicare you can’t be billed separately for ambulance calls after 7:00pm. This used to be a standard practice in many jurisdictions but was changed by federal legislators in 1995. Check for this, although such billing mistakes aren’t common anymore.

In some locations you may be billed even though you are transported in a city or county ambulance. If that is the case and you aren’t covered by Medicare, state health insurance, or private health insurance, you can usually apply for some sort of hardship assistance if you are having trouble paying the bill. In other areas the county or city will accept any insurance payment as payment in full, so if you receive a bill for the ambulance service, check with your insurance provider or Medicare. If they have made a payment to the ambulance service, you should not be liable for any other charges.

Separate billing for ambulance services is relatively recent in many areas throughout the U.S. For example in Fairfax County, VA, such separate bills began in 2005. One thing to check on such separate bill is the mileage charge. Make sure it’s accurate, especially because it can be up to $10 a mile, depending upon where you are. It doesn’t take much of an error in such cases to add up to a substantial overcharge.

Another thing to check is the accuracy of the procedures and medications on the statement. While you may be in a relatively poor position to determine the accuracy of this, some things will be obvious. For example if you had a heart attack, you probably weren’t given a topical antibiotic enroute to the hospital. Similarly, if you had a broken leg, you probably didn’t need a defibrillator zap. In many cases the data entry for the bill is done on laptops located in the ambulance and mistakes can be made. Actually, mistakes can happen at any point in the billing chain, so be vigilant.

Hopefully a ride in an ambulance is not something that you or a family member will need, but if you do, you shouldn’t have to pay any more than necessary. Make sure when the bill shows up that no more of your money gets mailed back than is warranted.

Have a great, Debt Free, weekend.

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Posted by debtblog at 01:29 PM | Permalink | Comments (0) | TrackBacks (0)

 
If you are new to investing you need to ask yourself one main question: “What are my goals?” If you’re investing for retirement, fun, or to build a large position you can cash out to use for other things, you’ll use different investing strategies. If you’re investing for retirement you’ll have to take into account your current age, risk tolerance, the age you’d like to retire and how much you can invest each period. You may want to create a chunk of cash you can use to fund other things, weather that is other investments or fun in the sun. You could also be looking to start investing in the stock market as a hobby to occupy your spare time, and make a bit of money if you do well.

All of those reasons are great reasons to get started investing in stocks, but you’ll want to begin with a different approach for each. One thing should be the same though. You’ll want to learn as much as possible about investing, economics, human behavior, and finance. It’s often been said that knowledge is power, but in this case knowledge is the difference between your portfolio going up or evaporating altogether.

If you’re investing for your retirement and you have a long time to go before you retire, you can invest in stocks that may be a bit more risky than if you’re investing for retirement and have only 10 or 15 years to go before you want to hang it up. You can afford to invest more aggressively because you have time in which to absorb short term losses. In most cases aggressive investing will carry with it a bit more risk and your portfolio will probably have a bit more volatility. Volatility is the propensity of your portfolio to go up and down.

If you are investing for the short term, you want to be a bit more conservative because large swings in your portfolio’s value could cause you to be in the middle of a drop at precisely a time when you need to be withdrawing funds. If you have a longer time horizon, you have time to absorb such short term losses because in time the market should carry your stocks higher again.

If you’re investing purely for fun, you can afford to take as risky or as conservative a position as you’d like, depending upon your mood. If your research unearths a stock that seems to have promise, you can go ahead and take a position (buy some). If it drops, well, you’re only in it for a good time anyway. If it goes way up, you’ll get the investor’s rush as your portfolio rapidly grows.

In the majority of cases I like Warren Buffett’s value approach to investing. Value investing is buying stocks in good companies that are, by most analytical indicators, undervalued compared to stocks of other companies in their industries. In many cases some of the most boring stocks can be some of the strongest performers. I did a post a while back about boring stocks. On the other hand, some of the sexiest, most attractive stocks can such your portfolio dry in a heartbeat.

You can invest in individual stocks or mutual funds. Mutual funds are funds comprised of a large number of stocks or other securities and are managed by those who in theory know better than you about such things. If you want to choose your own stocks, and want to stay in the value investing mold, here are some pointers as I see it. Value stocks can earn you nice returns, but as with many things stock market related, can eat up your funds in a hurry too. So called value companies are in many cases experiencing some sort of trouble, which is why their stock price is so low in the first place. Your job as an investor is to determine what kind of trouble they’re in and if they are likely to recover over the long term.

If you choose a company that is attractively priced now, but has attractive prospects going forward, you’ll do very well. However you can easily pick a company that is in fundamental trouble and has limited prospects for future success. In that case you’ll likely lose most or all of your investment in that stock.

Here are some of the fundamentals you can look at to help determine if the company has good prospects for success in the future. One of the most important is the cash flow. If the company has a history of positive operating cash flow, and has positive operating cash flow in the last year, that is a good sign. There’s an old saying in business “Cash is king” and that’s certainly true when you’re analyzing a company whose stock you’re considering investing in.

Another important thing to look at is weather the company is profitable. To determine that you need to look it’s net income. If the company has a positive net income for the previous year, preferably two, that’s good. Remember as an investor, you’ll be a part owner in the company. You can feel better about it’s prospects to make money for itself in the future, and by extension, make you money, if it’s doing so already.

Look deeper at the operating cash flow. How was the money generated? If the operating cash flow is greater than the net income that’s a good sign for you as a potential investor. If the company’s operating cash flow for the past 4 quarters are greater than its net income you can usually give the company strong consideration. Also, make sure that the cash flow didn’t come from sale of assets or stock, but from the company’s actual operations of its core business.

One last thing that I like to check is what is called the “current ratio”. That is the company’s current assets related to its current liabilities. If it is decreasing its liabilities related to its assets ever year that is another good sign.

So, once you’ve figured out why the heck you’re thinking of investing in the stock market and learned what you can about how things work, you can take the plunge. Remember by buying stock in a company you’ll be buying a piece of that company, hoping to participate in its future success. Company’s that are well run, in growth industries, and undervalued compared to their competitors stand a good chance of success. On the other hand, you want to steer clear of companies in declining industries that have poor financial indicators and management with shaky track records.

You may want to trade using a full service broker or use a discount broker. A discount broker will give you little or no guidance, but charge you a very small fee each time you make a trade. On the other hand a full service broker will make recommendations but charge you for doing so. You’ll have to pay them each time you buy or sell anything. Some full service brokers are very good and can give you solid recommendations, while others are only interested in the commissions they earn from your trading. Most are somewhere in between.

As with many professionals you’ll want to carefully investigate their track records and talk to their current customers. If you have friends and associates who have a broker they are happy with, and has demonstrated long term success, you may use them. There are also fee based brokers that don’t charge a commission of reach trade you make, they charge you a flat fee no matter how many trades you make. If you plan to make a lot of trades and want the advice and service of a full service broker, a fee based broker may make sense for you.
 

If you plan to make quite a few trades, but feel comfortable doing your own research and choosing your won stocks, you probably want to go with a discount broker. You’ll pay a much lower fee. If you don’t want or need the advice, there’s no reason to pay for it. I did a post comparing online discount  stock brokers a few months ago.

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Posted by debtblog at 01:37 PM | Permalink | Comments (0) | TrackBacks (0)

There are 2 possibilities; they could be trying to collect a debt that never existed, or one you’ve already paid. The second is much easier to dispute because you can show documentation that you paid the debt in full and their request is invalid. Trying to prove a negative on the other hand is much more difficult.

Rest assured, you wouldn’t be the first to be informed that you were in default on your debt for your Sears card that you owed $2,100 on. But, what if you didn’t actually owe the money? You either never made the purchase, or didn’t have an account with the firm in question. The first thing you do is jump on your trusty computer and fire off a letter to the collection agency and the merchant, disputing the debt. Want to do this as soon as possible. Use fake legal letterhead to make it appear even more impressive…..just kidding, definitely do not do that, however tempting it may be. Do, however provide every shred of documentation (copies only, please) supporting your position.

You will have to send the credit reporting agencies and the collection agency a letter disputing the debt. For reporting that you have a debt that you don’t actually owe, they can be in violation of section 623(a) of the Fair Credit Reporting Act (FCRA).

This provision of the FCRA states the following:

Duty of furnishers of information to provide accurate information.

(1) Prohibition.

(A) Reporting information with actual knowledge of errors. A person shall not furnish any information relating to a consumer to any consumer reporting agency if the person knows or has reasonable cause to believe that the information is inaccurate.

(B) Reporting information after notice and confirmation of errors. A person shall not furnish information relating to a consumer to any consumer reporting agency if

(i) the person has been notified by the consumer, at the address specified by the person for such notices, that specific information is inaccurate; and

(ii) the information is, in fact, inaccurate.

(C) No address requirement. A person who clearly and conspicuously specifies to the consumer an address for notices referred to in subparagraph (B) shall not be subject to subparagraph (A); however, nothing in subparagraph (B) shall require a person to specify such an address.

(D) DEFINITION- For purposes of subparagraph (A), the term `reasonable cause to believe that the information is inaccurate' means having specific knowledge, other than solely allegations by the consumer, that would cause a reasonable person to have substantial doubts about the accuracy of the information.

According to the same section, but in subsection (b), cr