The most common question that a bankruptcy attorney receives is always going to be “How much does it cost to hire you?” This isn’t surprising because everyone that is considering bankruptcy as an option has one thing on their mind and that is money. They want to know what the bottom line is going to be for this process.
Prior to the 2005 changes it was possible for an individual to represent themselves in a bankruptcy case. I am not saying that after the 2005 changes that it is impossible but there is a reason that the most common continuing education classes for lawyers are about bankruptcy. That reason is that the bankruptcy laws are complicated for lawyers to understand. It is highly recommended that everyone that files bankruptcy hire an attorney in some capacity to assist them.
Everyone reading this article wants to know, where do I find the money to pay an attorney? First I would like to like to say that payment plans are not an option for those debtors filing Chapter 7. If a payment plan is set up then the attorney becomes a creditor and after the court discharges the debtor’s debts then the attorney’s fee is discharged. This would mean that the attorney did all of the work for free and most attorneys don’t like to do that. If the debtor files a Chapter 13 case, since the debts are not discharged until the plan is complete this means that the attorney would be allowed to collect installments to pay for the fee.
There are other options though. One of the most obvious that people overlook is to stop paying other bills. Most debtors are fighting to try to get back on top of things by making partial payments to creditors. When you file bankruptcy many of your debts will be discharged so if you miss a payment it isn’t the end of the world. Further paying creditors within 90 days of filing bankruptcy can sometimes lead to an assumption of favoring some creditors over others and this leads to complications in the bankruptcy. If a debtor has an income and they stop making payments on consumer and credit card debts, they can use that money to pay their attorney.
Another option is to use a tax refund to pay the attorney. Most people that have financial problems view a tax refund as a way to get creditors off their backs for a little while or a means of getting something done that because of their debt could not get done previously. Using a tax refund to pay an attorney to file bankruptcy could be the smartest way to use your refund. It would get the creditors to stop harassing you permanently and it would allow you the financial freedom in the future to get other things done.
A generous family member might be another option to help you get enough money to file. It is sometimes hard to ask for this kind of help but in the end it is worth it. Most families care about each other and are more then willing to help out. They might not be willing to give you money put the creditors at bay temporarily but they are more likely to help you achieve a permanent solution to your financial problems.
There are other methods available to get the money to pay for an attorney. I hear it all the time, “If I had that much money I wouldn’t be calling you.” The fact of the matter is most clients that are filing for bankruptcy owe creditors 20 to 50 times as much as it cost to pay an attorney. If they exhaust their resources most people can get the amount of money that an attorney requires to assist the client. That amount of money wouldn’t change the debtor’s situation at all if they were to use it on bills but if they use it to file bankruptcy, the effects on the debtor’s life can be profound.
Monday, January 11, 2010
Tuesday, January 5, 2010
Form 990
The IRS vision over tax exempt organizations is growing. Form 990 has increased the amount of information that must be provided to the IRS and the public. There are 16 schedules that must be filled that total 76 pages. There are 113 pages of instructions that accompany those pages. This is in addition to normal filing requirements. Despite the length, the IRS assures tax exempt organizations that they will not have to fill out every schedule in a given year.
There are still some organizations that are still exempt from having to fill out the full form. Churches, conventions, and associations of churches and some church organizations are completely exempt. Private foundations must file a Form 990-PF instead of the Form 990. Organizations with gross receipts of less than $1,000,000 and total assets less than $2,500,000 can file a Form 990-EZ although in the upcoming years these numbers are going to become even more restrictive. Most organizations having gross receipts less than $25,000 are allowed to file a substantially shorter version called a Form 990-N.
The new form requires more details to be disclosed by the organization. One of these changes is the organization must disclose who governs it. This includes listing the number of voting members, which of these members are independent and listing the information on the directors, officers and key employees.
Organizations must also disclose the organizations policies for identifying and dealing with conflicts of interest, the amount of compensation given to employees, how to respond to whistleblowers, how records are handled and how interactions with taxable entities are to be handled.
Conflicts or potential conflicts of interest must also be disclosed. These include the organization dealing with other entities that an officer, director or key employee has an interest in. This is to prevent the use of the tax exempt organization to funnel money to the person with an interest.
Organizations will also have to closely report the amount of fundraising they do and how much donated property they receive. The new form asks for specific details on these activities. One possible discomfort is organizations must report how much they spend on specific events and how much they receive for hosting such events. If the event results in a loss this might be quite embarrassing for the organization.
There are other things that now must be reported for organizations that deal with certain things such as those that receive tax-exempt bonds or those that deal in healthcare. These are specific to only those organizations and others do not need to bother with this type of reporting.
It is important for multiple members of the organization to review the return prior to its submission. Not only will the IRS go over it but it will also be available for the public to view. This can affect potential donors’ decisions to donate or not. It is important for an organization to act morally all year long in order to avoid any appearance or wrong doing. Not only can they lose their tax exempt status but they can also lose funding because it would appear to an unsavory charity to associate with.
There are still some organizations that are still exempt from having to fill out the full form. Churches, conventions, and associations of churches and some church organizations are completely exempt. Private foundations must file a Form 990-PF instead of the Form 990. Organizations with gross receipts of less than $1,000,000 and total assets less than $2,500,000 can file a Form 990-EZ although in the upcoming years these numbers are going to become even more restrictive. Most organizations having gross receipts less than $25,000 are allowed to file a substantially shorter version called a Form 990-N.
The new form requires more details to be disclosed by the organization. One of these changes is the organization must disclose who governs it. This includes listing the number of voting members, which of these members are independent and listing the information on the directors, officers and key employees.
Organizations must also disclose the organizations policies for identifying and dealing with conflicts of interest, the amount of compensation given to employees, how to respond to whistleblowers, how records are handled and how interactions with taxable entities are to be handled.
Conflicts or potential conflicts of interest must also be disclosed. These include the organization dealing with other entities that an officer, director or key employee has an interest in. This is to prevent the use of the tax exempt organization to funnel money to the person with an interest.
Organizations will also have to closely report the amount of fundraising they do and how much donated property they receive. The new form asks for specific details on these activities. One possible discomfort is organizations must report how much they spend on specific events and how much they receive for hosting such events. If the event results in a loss this might be quite embarrassing for the organization.
There are other things that now must be reported for organizations that deal with certain things such as those that receive tax-exempt bonds or those that deal in healthcare. These are specific to only those organizations and others do not need to bother with this type of reporting.
It is important for multiple members of the organization to review the return prior to its submission. Not only will the IRS go over it but it will also be available for the public to view. This can affect potential donors’ decisions to donate or not. It is important for an organization to act morally all year long in order to avoid any appearance or wrong doing. Not only can they lose their tax exempt status but they can also lose funding because it would appear to an unsavory charity to associate with.
Monday, January 4, 2010
What is a tax exempt business?
If there is one thing that new business owners under estimate it is the effect taxes can have on the business. Everyone knows that income is taxed but the tax codes are so complicated there seems to be an endless number of considerations that must be made in filing taxes annually. Wouldn’t it be so much easier to qualify as a tax exempt organization to avoid all of that? Being tax exempt might not be as simple as it sounds.
Requirements
There are two tests that must be met for an organization to qualify as a tax exempt business. The first is the organizational test and the second is the operational test. If an organization fails to meet either of these tests it cannot be exempt.
The organizational test is pretty strait forward and simple. In order for an organization to be tax exempt the organizing documents must restrict the organization purposes to exempt purposes. An example of this would be an organization that is set up to teach students how to fix and repair vehicles. Education is a tax exempt purpose. The organizing documents, such as articles of incorporation, must restrict the purpose of this organization to education. They are not permitted to include selling auto supplies or employees repairing vehicles for profit in its purpose.
The operational test is a little more complicated. The base line rule for this test is that the operating rules must further the exempt purpose. This is a complicated way of saying that the organization must act as a charity. To determine if an organization is charitable the IRS looks to the primary purpose of the organization. This means that incidental nonexempt activities won’t disqualify the organization so long as it remains incidental. If we look to our automotive school example, if the school was to perform repairs on vehicles and in return the owners of the vehicles were to pay the school for the work done as long as the primary purpose of the organization was to educate and not to make money for repairing vehicles then this is considered incidental. If the students of the school were already certified mechanics then obviously the primary purpose is to make a profit for the repairs and not to educate.
Charitable operations include hospitals and healthcare, legal services and public interest firms, community development and low income housing, environmental protection, disaster relief, education, religious organizations, and other exempt purposes. For all of these operations the organization must meet the community benefit standard. This means that it is open to the public, controlled by an independent community-represented board, open staff policy and surplus is used for improvements. As long as our automotive school discussed above allowed anyone to enroll; the controlling body included community members; it didn’t restrict who can be employed; and any surplus in income was put back into improving the school, then this test would be met.
Restrictions
Even if an organization meets these two tests there are still restrictions that the organization must adhere to. These are above and beyond simply making sure the organization continues to comply with the above tests.
The first and most obvious restriction is the organization cannot violate public policy. This encompasses more then simply avoiding unlawful activity. This restriction comes into play mostly when there is discrimination. A prime example of this would be a group like the Ku Klux Klan. They are not organized to make a profit in any way but they obviously discriminate heavily and therefore they cannot be a tax exempt organization.
The next restriction is that no part of the net earnings may inure to the benefit of any private shareholder or individual. Inurement occurs when an organization permits an insider unwarranted personal use of or benefit from organizational assets. An insider is a founder, officer, director, manager or any of these individual’s family members. This basically boils down to that individuals that run the organization cannot benefit from their position. This does not mean that cannot receive a reasonable salary or be compensated for expenses but abuse of their position can violate this restriction. Violations result in heavy taxes for both the organization and the individuals involved.
The third restriction is that the organization cannot be operated for a targeted private individual. This would be an organization that is set up simply to benefit one person. If someone set up an organization to benefit a man that was recently paralyzed and continue to supplement his income to make up for any loss he would experience or additional expenses he would have. This would be for the benefit of one person alone and would result in the organization losing its tax exempt status.
The next restriction is that a tax exempt organization is not permitted to participate in political campaigns. Even religious organizations can lose their exempt status by this kind of activity. Organizations are permitted to educate voters as long as they refrain from advocating for or against a candidate. They can also help to register voters but must refrain from targeting people with a certain view point.
The tax exempt business must not participate in substantial lobbying. This can be complicated and confusing. It should be avoided but if necessary the organization should consult someone prior to taking any actions. This rule applies to all levels of government and both direct lobbying and a grassroots campaign to get voters to contact government officials. The law says that a tax exempt organization must not normally make lobbying expenditures in excess of the lobbying ceiling amount of 150 percent of their § 4911 amount. Public charities must always pay a tax sanction on lobbying or they can lose their tax exempt status.
The final restriction is that the business is not permitted to operate in a commercial manner. Substantial commercial activity destroys the charitable purpose. The IRS looks to the extent of the commercial activity to the size of the trade or business to determine if there is substantial commercial activity. A good example of this is a gift shop in an art museum. The gift shop is commercial activity but compared to the rest of the business it is very minor.
Public Charity vs. Private Foundation
There is a difference between a public charity and a private foundation. These seem like the same type of entity but in the eyes of the IRS they are different. A public charity receives substantial support from qualifying grants and contributions and is a community foundation or service provider. A private foundation is a charitable organization that usually receives contributions from a single source, has investment income and makes charitable grants to others rather then run its own programs.
The biggest reason that anyone should take note of this difference is that private foundations are under more restrictions then public charities are. The organizing documents of the foundation must specify payout requirements and must prohibit self-dealing and taxable expenditures. Foundations are also prohibited from dealing with certain individuals. There are other regulatory requirements for private foundations and taxable activity for them.
Gaining tax exempt status is very beneficial for an organization. That is the reason that the IRS puts so many retrictions and requirements on gaining this. If they didn't then we would see churches and schools become the leaders in business because they would be able to avoid the dark cloud that most of us hate to see come every year.
Requirements
There are two tests that must be met for an organization to qualify as a tax exempt business. The first is the organizational test and the second is the operational test. If an organization fails to meet either of these tests it cannot be exempt.
The organizational test is pretty strait forward and simple. In order for an organization to be tax exempt the organizing documents must restrict the organization purposes to exempt purposes. An example of this would be an organization that is set up to teach students how to fix and repair vehicles. Education is a tax exempt purpose. The organizing documents, such as articles of incorporation, must restrict the purpose of this organization to education. They are not permitted to include selling auto supplies or employees repairing vehicles for profit in its purpose.
The operational test is a little more complicated. The base line rule for this test is that the operating rules must further the exempt purpose. This is a complicated way of saying that the organization must act as a charity. To determine if an organization is charitable the IRS looks to the primary purpose of the organization. This means that incidental nonexempt activities won’t disqualify the organization so long as it remains incidental. If we look to our automotive school example, if the school was to perform repairs on vehicles and in return the owners of the vehicles were to pay the school for the work done as long as the primary purpose of the organization was to educate and not to make money for repairing vehicles then this is considered incidental. If the students of the school were already certified mechanics then obviously the primary purpose is to make a profit for the repairs and not to educate.
Charitable operations include hospitals and healthcare, legal services and public interest firms, community development and low income housing, environmental protection, disaster relief, education, religious organizations, and other exempt purposes. For all of these operations the organization must meet the community benefit standard. This means that it is open to the public, controlled by an independent community-represented board, open staff policy and surplus is used for improvements. As long as our automotive school discussed above allowed anyone to enroll; the controlling body included community members; it didn’t restrict who can be employed; and any surplus in income was put back into improving the school, then this test would be met.
Restrictions
Even if an organization meets these two tests there are still restrictions that the organization must adhere to. These are above and beyond simply making sure the organization continues to comply with the above tests.
The first and most obvious restriction is the organization cannot violate public policy. This encompasses more then simply avoiding unlawful activity. This restriction comes into play mostly when there is discrimination. A prime example of this would be a group like the Ku Klux Klan. They are not organized to make a profit in any way but they obviously discriminate heavily and therefore they cannot be a tax exempt organization.
The next restriction is that no part of the net earnings may inure to the benefit of any private shareholder or individual. Inurement occurs when an organization permits an insider unwarranted personal use of or benefit from organizational assets. An insider is a founder, officer, director, manager or any of these individual’s family members. This basically boils down to that individuals that run the organization cannot benefit from their position. This does not mean that cannot receive a reasonable salary or be compensated for expenses but abuse of their position can violate this restriction. Violations result in heavy taxes for both the organization and the individuals involved.
The third restriction is that the organization cannot be operated for a targeted private individual. This would be an organization that is set up simply to benefit one person. If someone set up an organization to benefit a man that was recently paralyzed and continue to supplement his income to make up for any loss he would experience or additional expenses he would have. This would be for the benefit of one person alone and would result in the organization losing its tax exempt status.
The next restriction is that a tax exempt organization is not permitted to participate in political campaigns. Even religious organizations can lose their exempt status by this kind of activity. Organizations are permitted to educate voters as long as they refrain from advocating for or against a candidate. They can also help to register voters but must refrain from targeting people with a certain view point.
The tax exempt business must not participate in substantial lobbying. This can be complicated and confusing. It should be avoided but if necessary the organization should consult someone prior to taking any actions. This rule applies to all levels of government and both direct lobbying and a grassroots campaign to get voters to contact government officials. The law says that a tax exempt organization must not normally make lobbying expenditures in excess of the lobbying ceiling amount of 150 percent of their § 4911 amount. Public charities must always pay a tax sanction on lobbying or they can lose their tax exempt status.
The final restriction is that the business is not permitted to operate in a commercial manner. Substantial commercial activity destroys the charitable purpose. The IRS looks to the extent of the commercial activity to the size of the trade or business to determine if there is substantial commercial activity. A good example of this is a gift shop in an art museum. The gift shop is commercial activity but compared to the rest of the business it is very minor.
Public Charity vs. Private Foundation
There is a difference between a public charity and a private foundation. These seem like the same type of entity but in the eyes of the IRS they are different. A public charity receives substantial support from qualifying grants and contributions and is a community foundation or service provider. A private foundation is a charitable organization that usually receives contributions from a single source, has investment income and makes charitable grants to others rather then run its own programs.
The biggest reason that anyone should take note of this difference is that private foundations are under more restrictions then public charities are. The organizing documents of the foundation must specify payout requirements and must prohibit self-dealing and taxable expenditures. Foundations are also prohibited from dealing with certain individuals. There are other regulatory requirements for private foundations and taxable activity for them.
Gaining tax exempt status is very beneficial for an organization. That is the reason that the IRS puts so many retrictions and requirements on gaining this. If they didn't then we would see churches and schools become the leaders in business because they would be able to avoid the dark cloud that most of us hate to see come every year.
Monday, December 28, 2009
The Medical Bill Crunch
The great debate in Washington is over the national healthcare system. To many Americans this is a confusing issue because it seems like the politicians have debated and twisted the subject to such a point that we don’t know what they are fighting over. Is it reducing healthcare costs, insuring everyone, raising taxes or something else? Despite this confusion there is one thing that is certain, don’t get sick or hurt because it is going to cost an arm and a leg to get healthy again.
Medical bills are the fastest growing reason for causing individuals to file for bankruptcy. If it’s not the medical themselves that are overwhelming it’s the other bills that individuals fall behind on because of the medical bills that cause them to have to seek relief.
In Grand Rapids and West Michigan we have seen the medical field boom. New technology, new buildings and new people seem to be pouring into the area pretty steadily. This influx of medical facilities and medical staff has not caused the price of healthcare to go down. In fact because the doctors are more specialized there has been an increase in expenses.
Medical bills are responsible for over 60% of bankruptcy filings. This is a sharp increase from the percentage of filings associated with medical bills that occurred at the beginning of this decade.
Many people are under the impression that because they are insured that they are immune from this beast. Everyone is subject to attack. Of those that file because of their crushing medical bills, nearly 75% had medical insurance. These are expenses that grow drastically and it’s out of our control usually.
The one light at the end of the tunnel is that bankruptcy can relieve these medical bills. The holders of these claims are unsecured and have no priority. That means that any bills accumulated prior to filing will be discharged.
Some might think that it’s not worth filing bankruptcy for medical bills because you might not be able to file for bankruptcy protection if something else was to come up in the near future. Yes other financial hardships do come up and after filing there is a certain amount of time that is required to pass before you can file again. This is when it is important to consult an attorney and assess your financial situation prior to these health expenses, what it will be like after you file and how long and under what circumstances you would live if you don’t file.
The ongoing debate in the nation’s capital might be over our heads for now but we do know how medical bills can hurt us right now. Any one that is watching these types of expenses pile up or is trying to unbury themselves should consider bankruptcy as a possible solution.
Medical bills are the fastest growing reason for causing individuals to file for bankruptcy. If it’s not the medical themselves that are overwhelming it’s the other bills that individuals fall behind on because of the medical bills that cause them to have to seek relief.
In Grand Rapids and West Michigan we have seen the medical field boom. New technology, new buildings and new people seem to be pouring into the area pretty steadily. This influx of medical facilities and medical staff has not caused the price of healthcare to go down. In fact because the doctors are more specialized there has been an increase in expenses.
Medical bills are responsible for over 60% of bankruptcy filings. This is a sharp increase from the percentage of filings associated with medical bills that occurred at the beginning of this decade.
Many people are under the impression that because they are insured that they are immune from this beast. Everyone is subject to attack. Of those that file because of their crushing medical bills, nearly 75% had medical insurance. These are expenses that grow drastically and it’s out of our control usually.
The one light at the end of the tunnel is that bankruptcy can relieve these medical bills. The holders of these claims are unsecured and have no priority. That means that any bills accumulated prior to filing will be discharged.
Some might think that it’s not worth filing bankruptcy for medical bills because you might not be able to file for bankruptcy protection if something else was to come up in the near future. Yes other financial hardships do come up and after filing there is a certain amount of time that is required to pass before you can file again. This is when it is important to consult an attorney and assess your financial situation prior to these health expenses, what it will be like after you file and how long and under what circumstances you would live if you don’t file.
The ongoing debate in the nation’s capital might be over our heads for now but we do know how medical bills can hurt us right now. Any one that is watching these types of expenses pile up or is trying to unbury themselves should consider bankruptcy as a possible solution.
Wednesday, December 23, 2009
Michigan Business Tax
Growing up I was taught by my father that there were only two guarantees in this life: death and taxes. One is extremely simple and the other is exceptionally complicated. There is only one thing that complicates taxes more and that is the taxation of business entities. And in past year the concepts that surround business taxes in Michigan have become more complicated.
Many people were relieved to hear that the Michigan Single Business Tax (SBT) would no longer be in effect. After making their first filing under the new Michigan Business Tax (MBT) and preparing to have to make another soon, many have the opinion that this new law is more confusing than the old.
OVERVIEW
There are four parts that make up the MBT and there is a fifth for small businesses. Depending on the whether the tax payer is a financial institution, insurance company, small business or none of these will determine which of the five parts the business is responsible for.
The general rule is that a business will be responsible for the business income tax portion (BIT), the modified gross receipts tax (MGRT) and a surcharge. If the business qualifies as a small business, it will be limited to a 1.8 percent tax and no surcharge. Financial institutions and insurance companies are exempt from the BIT and MGRT but they have their own specific industry taxes they must pay.
SPECIFIC ISSUES
Under the SBT a unitary combined filing could only be done by permission which was difficult to receive. Under the new MBT, a combined return is required for any group of taxpayers if (1) the taxpayers are owned more than 50 percent by one person and (2) there is a flow of value between or among the taxpayers.
There is also a prominent difference between how an S Corporation and LLCs are taxed. Usually these two entities are seen as very similar because they are corporations that are taxed as flow-through entities. The difference now comes from the fact that LLCs have to pay a federal self-employment tax and S Corps don’t. Under the MBT, LLCs are permitted to deduct this federal tax payment from their Michigan return.
There is also a new test as to how to determine if a there is a significant nexus between an out of state business and Michigan. If there is a significant nexus the business will have to pay taxes in Michigan. A non-Michigan business will have nexus and be subject to the MBT if it either has (1) a physical presence for more than one day during the tax year or (2) gross receipts apportioned to Michigan of at least $350,000 and actively solicits sales in Michigan.
This is an obvious simplification of all that goes into the MBT. There are other issues surrounding it and more in depth factors to the ones discussed here. A business that operates in Michigan should see these issues and at least recognize that they might be subject to them. If there is a possibility these businesses should contact an attorney to discuss their liability and options.
Many people were relieved to hear that the Michigan Single Business Tax (SBT) would no longer be in effect. After making their first filing under the new Michigan Business Tax (MBT) and preparing to have to make another soon, many have the opinion that this new law is more confusing than the old.
OVERVIEW
There are four parts that make up the MBT and there is a fifth for small businesses. Depending on the whether the tax payer is a financial institution, insurance company, small business or none of these will determine which of the five parts the business is responsible for.
The general rule is that a business will be responsible for the business income tax portion (BIT), the modified gross receipts tax (MGRT) and a surcharge. If the business qualifies as a small business, it will be limited to a 1.8 percent tax and no surcharge. Financial institutions and insurance companies are exempt from the BIT and MGRT but they have their own specific industry taxes they must pay.
SPECIFIC ISSUES
Under the SBT a unitary combined filing could only be done by permission which was difficult to receive. Under the new MBT, a combined return is required for any group of taxpayers if (1) the taxpayers are owned more than 50 percent by one person and (2) there is a flow of value between or among the taxpayers.
There is also a prominent difference between how an S Corporation and LLCs are taxed. Usually these two entities are seen as very similar because they are corporations that are taxed as flow-through entities. The difference now comes from the fact that LLCs have to pay a federal self-employment tax and S Corps don’t. Under the MBT, LLCs are permitted to deduct this federal tax payment from their Michigan return.
There is also a new test as to how to determine if a there is a significant nexus between an out of state business and Michigan. If there is a significant nexus the business will have to pay taxes in Michigan. A non-Michigan business will have nexus and be subject to the MBT if it either has (1) a physical presence for more than one day during the tax year or (2) gross receipts apportioned to Michigan of at least $350,000 and actively solicits sales in Michigan.
This is an obvious simplification of all that goes into the MBT. There are other issues surrounding it and more in depth factors to the ones discussed here. A business that operates in Michigan should see these issues and at least recognize that they might be subject to them. If there is a possibility these businesses should contact an attorney to discuss their liability and options.
Thursday, December 17, 2009
Unfair Competition: Advertising
There only seems to be one place that is more competitive then the world of sports and that is the world of business. Not only are we in direct competition with other companies but we are also competing with businesses in other markets. Everyone wants there business to not only be the best in its given field but wants other businesses from other fields to mimic the plan they follow. With such heavy competition how can we draw a line on what is merely being competitive and what would be unfair business practices?
Google is a great example of a business model to follow. They took a revolutionary idea of how a search engine should work and developed it. For quite a while that single thing was Google’s niche. They mastered it and became a leader in the field of search engines. Then they expanded the brand. Since then Google has become one of the leaders in web applications. I think anyone that has done business or owned a business would love to match the success of Google. Most are striving to achieve the first step made by Google and that is mastering their trade and becoming an industry leader.
That first step is a difficult one and many people work their entire lives and never truly make it there. And then there are those that look to cut corner in order to meet this goal.
One of the biggest mistakes that business can make is in their advertising. When I use the term advertising I am including everything from a television or magazine ad to sending out information about your product to salesmen or talking to customers. One way to easily promote your product is to compare it to the competition’s products. This is an effective way to prove to the consumer that yours is the best out there. The problem arises when businesses using this strategy begin to fudge the facts or attack the competition.
Whenever you make statements about your competitions products and those statements are false or misleading red flags should go up immediately. This can result in your competitor bringing an action against you for defamation, injurious falsehood, and other violations. Advertising should always be truthful and if your product doesn’t look good when compared to the competition’s product then don’t compare them. There are other strategies to promote your products or services that don’t involve a direct comparison or attack of the competition.
Think of Google. How many ads did they run that claimed Yahoo! as being inept or said that Ask.com was so much slower then Google? Google only promoted itself and made strides to better itself. There may have been internal comparisons in order to track progress but Google competed fairly the whole time.
I will post future articles that cover other asspects of unfair competiton.
Google is a great example of a business model to follow. They took a revolutionary idea of how a search engine should work and developed it. For quite a while that single thing was Google’s niche. They mastered it and became a leader in the field of search engines. Then they expanded the brand. Since then Google has become one of the leaders in web applications. I think anyone that has done business or owned a business would love to match the success of Google. Most are striving to achieve the first step made by Google and that is mastering their trade and becoming an industry leader.
That first step is a difficult one and many people work their entire lives and never truly make it there. And then there are those that look to cut corner in order to meet this goal.
One of the biggest mistakes that business can make is in their advertising. When I use the term advertising I am including everything from a television or magazine ad to sending out information about your product to salesmen or talking to customers. One way to easily promote your product is to compare it to the competition’s products. This is an effective way to prove to the consumer that yours is the best out there. The problem arises when businesses using this strategy begin to fudge the facts or attack the competition.
Whenever you make statements about your competitions products and those statements are false or misleading red flags should go up immediately. This can result in your competitor bringing an action against you for defamation, injurious falsehood, and other violations. Advertising should always be truthful and if your product doesn’t look good when compared to the competition’s product then don’t compare them. There are other strategies to promote your products or services that don’t involve a direct comparison or attack of the competition.
Think of Google. How many ads did they run that claimed Yahoo! as being inept or said that Ask.com was so much slower then Google? Google only promoted itself and made strides to better itself. There may have been internal comparisons in order to track progress but Google competed fairly the whole time.
I will post future articles that cover other asspects of unfair competiton.
Wednesday, December 16, 2009
Bad Mortgages
Mortgages are a huge part of the everyday lives of a lot of West Michigan citizens. In most of our lives that mortgage payment takes up a large portion of our budget. But are we actually giving money away to our mortgage holders?
There seems to be a new trend developing in the current legal system. Courts are standing up for the little guy when it comes to mortgage disputes. It might be in response to the public outcry against the large mortgage holders that are being bailed out by the federal government while individuals continue to lose their homes to foreclosure. Or it could be simply the continuing evolution of Michigan Courts. Either way, it should have everyone looking a little closer at their mortgages.
Large mortgage companies put out thousands of mortgages a year. This is a highly technical process that if not followed closely can result in a mistake that may not give the mortgage holder a lawful right to the property. With so many mortgages being created and also with so many changing hands, mistakes are bound to happen. These mistakes were often dismissed as not being equitable before if the court was to invalidate the mortgage.
Recently though this has changed. More courts are beginning to recognize these mistakes as reasons for the mortgage holders to lose their interest in the property. The Bankruptcy Court has not only voided liens on the property but held that those mortgage holders that have had liens voided are not permitted to file a proof of claim because they have failed to do so in a timely fashion.
One Judge in New York actually took this new wave of thought to the next level when ruling on a foreclosure dispute case. He ruled that not only was the foreclosure invalid and the mortgage was invalid, but also ruled that the bank had no claim to the house at all. This gave title to the home to the owners free and clear of any claims.
The mortgages that you have signed are legal contracts and they must be followed and there are specific laws that must be followed in order for them to remain valid. It is important that you hold the financial institutions that you enter into these agreements with to the same strict letter of the law that they do you. If trouble arises or you feel that you are being treated unfairly, it is important to consult an attorney about these things.
There seems to be a new trend developing in the current legal system. Courts are standing up for the little guy when it comes to mortgage disputes. It might be in response to the public outcry against the large mortgage holders that are being bailed out by the federal government while individuals continue to lose their homes to foreclosure. Or it could be simply the continuing evolution of Michigan Courts. Either way, it should have everyone looking a little closer at their mortgages.
Large mortgage companies put out thousands of mortgages a year. This is a highly technical process that if not followed closely can result in a mistake that may not give the mortgage holder a lawful right to the property. With so many mortgages being created and also with so many changing hands, mistakes are bound to happen. These mistakes were often dismissed as not being equitable before if the court was to invalidate the mortgage.
Recently though this has changed. More courts are beginning to recognize these mistakes as reasons for the mortgage holders to lose their interest in the property. The Bankruptcy Court has not only voided liens on the property but held that those mortgage holders that have had liens voided are not permitted to file a proof of claim because they have failed to do so in a timely fashion.
One Judge in New York actually took this new wave of thought to the next level when ruling on a foreclosure dispute case. He ruled that not only was the foreclosure invalid and the mortgage was invalid, but also ruled that the bank had no claim to the house at all. This gave title to the home to the owners free and clear of any claims.
The mortgages that you have signed are legal contracts and they must be followed and there are specific laws that must be followed in order for them to remain valid. It is important that you hold the financial institutions that you enter into these agreements with to the same strict letter of the law that they do you. If trouble arises or you feel that you are being treated unfairly, it is important to consult an attorney about these things.
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