Personal Bankruptcy Myths & Truths Explained

June has sprung! Kick off this month with our latest info, leads, and tips to help you get ahead.

You Should Know

• A summer price war has broken out between major retailers, such as Walmart, Target, Aldi, Amazon Fresh, and Walgreens. These retailers have announced price cuts across thousands of everyday grocery items.

• There are now 485,000 Americans who have over $1 million in their 401(k) retirement accounts, the highest number ever recorded, according to Fidelity.

• June is the most popular month for states that offer "free fishing days." On these days, residents and visitors can fish without a license. Look up your state’s free fishing days here.

Personal Bankruptcy: Understanding the Truths About This Debt Relief Tactic

If you’re struggling with overwhelming debt, bankruptcy can be a tool for a fresh start. To be clear, filing for bankruptcy has serious consequences (read the last paragraph of this article), and it’s not an easy process.

First of all, don’t let the Michael Scott bankruptcy method fool you. Filing for bankruptcy involves many steps, and bankruptcy takes on many forms. There are different chapters of bankruptcy under the U.S. Bankruptcy Code. For example, Chapter 7 is for liquidation, where some assets are sold to repay debts. Chapter 13 involves creating a repayment plan under court supervision.

There are plenty of other misunderstandings about personal bankruptcy, so let’s clear up a few of the big myths…

Myth: Declaring bankruptcy will cause you to lose everything you have, including all your property.

Bankruptcy laws provide exemptions that allow you to keep essential property, such as your car (up to a certain value), your home equity (depending on your state), and tools necessary for your trade or profession.

Myth: Bankruptcy discharges all types of debt.

Certain obligations, such as child support, alimony, and most student loans, typically cannot be discharged.

Myth: Your credit score / financial future will take a permanent hit.

Rest assured, your credit profile will “get out of jail” one day, and you can begin rebuilding your good credit. Chapter 7 bankruptcy remains on your credit report for ten years, and Chapter 13 for seven years.

Myth: Everyone will know you filed for bankruptcy.

Technically, this is possible, but practically speaking, no one you know will find out. True, bankruptcy filings are public record, but in reality, most people simply won't notice. A simple internet search won’t work. A person searching for bankruptcy fillings would have to visit the courthouse or using use a service like PACER (Public Access to Court Electronic Records), which requires a fee.

Myth: You can run up debt before filing for bankruptcy.

Accumulating debt with the intention of discharging it through bankruptcy is considered fraudulent. Debts incurred through fraudulent means, such as luxury purchases or cash advances shortly before filing, may not be discharged and could lead to legal consequences.

Myth: Bankruptcy will relieve you of all unpaid taxes.

Bankruptcy can discharge some income tax debt, but only if certain conditions are met. Under Chapter 7, dischargeable taxes must be more than 3 years old, and you must have filed all required tax returns for the past four years. If you have unpaid taxes, a better route would include an IRS payment plan or an offer in compromise.

Of course, there are major consequences to filing for bankruptcy and you should consider other paths first, such as working with a debt consolidation service (check out Accredited Debt Relief or National Debt Relief). Alternatively, a non-profit credit counseling agency, such as National Foundation for Credit Counseling, can help you create a debt management plan.

Earn Some Extra Money

• Homestay lets you earn income by renting out a room or space in your home to tourists and foreign students. The site is known for connecting travelers with a local host who welcomes them into his/her home, offering a cultural exchange experience. Guests book homestays for nightly, weekly or monthly stays. You control and set your own prices.

• Cloud Research Connect needs people to share opinions and participate in surveys and online tasks. Their goal is to help researchers at universities and companies understanding people’s thoughts, feelings, and behavior. Connect offers a variety of high-paying microtasks, with most paying an average of $10/hour.

• Getaround allows you to make money by renting out your car to verified renters. You don’t even have to meet the renters/drivers. They can book, locate and unlock your car from the Getaround app. You are automatically covered by comprehensive insurance provided from Getaround, and the service verifies each driver’s identity. Getaround charges a 20-30% commission on the total rental price.

• Kudos acts as a “smart wallet” that helps you maximize your credit card rewards. When you're about to make a purchase, Kudos automatically recommends the credit card that will earn you the most rewards for that specific purchase. This free app/Chrome Extension claims you can earn $750+ annually.

Why Limit Yourself to Physical Dollar Stores? Online Dollar Stores Are Equally Awesome

While Dollar General, Dollar Tree, and Family Dollar have long been destinations for budget-conscious shoppers, online dollar stores are increasingly becoming a valid alternative, especially for shoppers who don’t want to leave their home.

Online dollar stores offer a vast selection of products, and prices can be unbelievably low. However, online dollar stores usually require bulk purchases when you shop on their sites. Also, these stores usually require a minimum order to qualify for free shipping.

Here are some top online dollar stores:

• Dollar Fanatic – takes the classic dollar store experience online, letting you browse shopping bins at the $1, $2, $3, $4, and $5 price ranges. The Clearance Bin is pretty good. They also offer wholesale liquidation sales. Free shipping on orders of $35 or more.

• Dollar Item Direct – caters to buyers who buy in bulk at wholesale prices. The site imports directly from factories in China and offers over 20,000 items in stock that can usually be found in dollar, gift and general stores.

• DollarDays – this is a shopping site for nonprofits, businesses and others who wish to buy items in bulk at wholesale prices. Most items are sold by the case, meaning, for example, you’ll have to buy a case of 100 toothpaste tubes (but each tube costs 50 cents).

• Miss A – serves specifically the needs of women, offering a broad selection of beauty products, fashion accessories, and home décor items. Many items here fall within the dollar range, while others may be slightly above but still very budget-friendly.

• Oriental Trading – offers deep discounts for party, holiday, events and school supplies. Free shipping on orders of $49 or more.

SoFi Is Throwing Money at Bank Account Holders

SoFi, a top online bank, is offering a meaty cash incentive for users to set up direct deposit with their Checking and Saving account. You can now earn up to $300, depending on the amount of your direct deposits. The offer ends June 30.

Bank account holders at Sofi enjoy no overdraft fees, no minimum balance fees, and no monthly account fees. Additionally, a savings account at SoFi earns 4.6%, 10x the national average savings account rate.

To qualify, you just need to set up direct deposit and receive at least one deposit of $1 or more by June 30, 2024. The amount of your bonus depends on the total amount deposited within 25 days after your first deposit. Deposits of $1,000 to $4,999.99 will earn you $50, while deposits of $5,000 or more will get you the maximum bonus of $300.

How to Get Top Dollar When You Sell Used Furniture

Selling your used furniture on Craigslist or Facebook Marketplace can be painful – sketchy buyers who enter your apartment and touch your stuff with their greasy fingers, low ball offers, moving logistics, etc. If you have high-end furniture, direct selling on these sites isn’t going to give you the best price, because you’re mostly limited to local buyers.

The good news is that you can outsource the selling of your quality furniture by using a consignment service. These sites act as middlemen, showcasing, selling, and delivering your furniture to buyers (in exchange for a commission on the sale). You’ll typically get the best price for your furniture because the buyer base is nationwide. Here are two leading used furniture consignment sites:

• AptDeco – offers a white-glove service for selling high-quality furniture. They inspect furniture for quality and authenticity, professionally photograph your pieces, and handle secure delivery. Commission fees typically range from 25-38% of the final sale price.

• Kaiyo – specializes in designer and vintage pieces. Kaiyo offer a selective pick-up service where they assess your furniture and determine if it aligns with their brand. If accepted, they handle professional photography, listing creation, and manage the entire sale. Fees vary depending on the item, but generally fall within a 40-60% range.