Office of the Chapter 13 Trustee Personal Financial Management Class

CLASS GOALS Budget Development Money Management Wise Use of Credit Consumer Information

The average American has a financial emergency once every 18 months! The use of credit or the incurring of debt is prohibited while in Chapter 13. 90% of Americans have no savings.

What’s really important? Where do I want to go from here?

YOUR Plan is YOUR Decision…. Goals Personal Financial Choices Way You Want to Live Things You Want to Have Things You Want to Do Ideals Beliefs Values Philosophy Communication Attitude Components of Good Money Management

1 - Wants v. Needs

2 - SET S.M.A.R.T. GOALS Specific Measurable Attainable Relevant Time-related

LONG TERM = 5 years + Set Goals Short term = 1 year or less

TAKE ACTION: I will save “X” number of dollars for Christmas presents and parties by December 1. 1. 2. 3.

Skills needed to achieve goals 1 Focus – reminders or pictures Set priorities Manage time wisely 4 Evaluate progress 5 Adjust goals if necessary 6 Celebrate success

Inventory your business Write down everything you spend every day for one month

GETTING STARTED (Gross = the whole enchilada) GROSS Income______________ - TT payment (if payroll deducted) - Insurance deductions - IRA contribution ** NET Income _______________ (Net = that itty, bitty taco you take home) - fixed expenses (mortgage/car) - periodic expenses (home repair/auto registration) - variable averages (utilities/groceries/fun/habits) = ___________________ FOR SURPRISES/FUTURE (Gross = the whole enchilada) Teachers Manual Page 4-1: Unit Objectives (Overhead 4-1)

Types of Expenses Types of Expenses Examples Fixed Mortgage, Rent, Car Payments, Child Support Periodic Insurance (house, car) Property/Income Taxes Variable Clothing, Food, Phone, Entertainment

GETTING STARTED GROSS Income______________ - TT payment (if payroll deducted) - Insurance deductions - IRA contribution ** NET Income _______________ (use lowest amount – DO NOT include overtime) - fixed expenses (mortgage/car) - periodic expenses (auto registration/home repair) - variable averages (utilities/groceries/fun/habits) = ___________________ FOR SURPRISES/FUTURE** ** This is where decision making comes into play.

Buyer Beware!

Consider when shopping - Compare prices and quality - Research before buying - Plan shopping in advance Walk away, think about it before you buy Don’t buy on impulse Remember: The sales people work for the seller

Debt Warning Signs Don’t Have Enough Saved for Emergencies Make only Minimum payments on CC bills Routinely Spend MORE than you earn Transfer balances from one card to the other instead of making payments Unsure of total amount you owe creditors Bounced Checks Use more than your total income just to pay off debts

CREDIT REHABILITATION Lynda Woods 817.770.8500 Ext 28572 Amy Tate-Almy Ext 28574

Kinds of Credit Long-Term Short-Term Secured Unsecured Mortgage, car loan, installment loans Short-Term Items or services in a single payment within a given period of time, usually with no interest charge. Example: Utility bills Secured Something of value promised to lender Unsecured Loan without collateral higher interest rate 5-4 5

Other forms of Credit Rental Purchase (Rent to Own) Lease Use an item for a period of time, then return it if you desire. Weekly or monthly payments Lease Use a car for a period of time, the down payment and monthly payments are almost always lower than purchasing a car. Costs more in long run

United States Bankruptcy Court Northern District of Texas Sample Matrix, p 1 United States Bankruptcy Court Northern District of Texas Fort Worth Division IN RE: name CASE NO: 405-4XXXX-DML-13 CHAPTER: 13 VERIFICATION OF CREDITOR MATRIX

Sample Matrix, p 2 ABC Creditors PO Box 1234 Anyplace, USA 00000 Credit Systems 5678 Mickey Mouse Lane Disney, CA 99999 GMAC PO 9876 Cargo, MI 98765 XYZ Jewelers 4567 Diamond Circle Emerald Hills, AZ 54871

Get Off and Running NOW with your Credit !!!! www.annualcreditreport.com 877.322.8228 Snail Mail: Annual Credit Report Request Services POB 105281 Atlanta, GA 30348-5281

Credit Report Says about you Negative Information Identification and Employment Data Payment History Inquiries Public Record Information Negative Information Collection accounts, late payments, charge-off, days late, bankruptcy, tax liens, judgments, excessive inquiries, accounts closed, Trans Alert, Hawk Alert (potential fraud indicators)

Texas Dept. of Insurance Texas Fair Plan 1(888)799.6277 www.helpinsure.com 1 (866)695.6873

Maintain Adequate Insurance Coverage You May Need: You May NOT Need: Health Mortgage Life Insurance Disability Insurance on CC balances Life Flight Insurance Homeowners or Renters Cancer Insurance Auto www.tdi.state.tx.us 1-800-252-3439 Consumer Help Line

Identity Theft Fastest growing crime in America DFW area FACTA – federal law helps protect Review credit reports periodically Be aware of fraud

Consumer Information Federal Trade Commission www.ftc.org/gov regional office: 214.979.0213 Consumer Action Handbook http://www.pueblo.gsa.gov 1.888.878.3256

Good luck… reach for the Stars!!!