Debt Delinquency Timeline: What to Expect

Posted on July 12, 2011 by Saldutti

At a time when unemployment remains stubbornly high and job prospects seem dismally low, the danger of missing a credit card payment or two is all too possible for many borrowers. Some may be tempted to try to outrun the debt by dodging collection calls and throwing away creditor letters. But sooner or later, your debt will find you.  Your delinquent debt can follow you on your credit report and possibly all the way to court if you refuse to pay. outlines the timeline for debt collection efforts and reveals what to expect and what you can do at each point.

Stage 1: 30 Days Past Due
• What to expect: Lenders likely won’t sound any alarms, but instead will use so-called soft tactics to get your payment in. They will call, email and send letters, but all contact will be friendly and helpful.  The creditor may also contact the credit reporting bureaus to report your account as delinquent.
• Your options: If you know you’ll miss a payment, contact the lender first.  The creditor will be more likely to work with you if you reach out first. If you don’t and the creditor contacts you, don’t avoid the call. Explain your financial dilemma to your creditor so you both can work out a payment plan.

Stage 2: 60 Days Past Due
• What to expect: Your credit card account likely will go into collections status and will be turned over to a department that specializes in obtaining delinquent debt.  The friendly phone calls, letters or emails will turn a bit more aggressive and less positive. The creditor will warn you that your account could go into serious delinquency if you don’t resolve the situation. Also, the creditor may contact the reporting bureaus to report your account as delinquent if it hasn’t done so already.
• Your options: You and your creditor can still work out a payment plan or come up with a hardship plan if your financial situation merits one.  You likely will have to pay a penalty fee.

Stage 3: 90 Days Past Due
• What to expect: More aggressive phone calls, emails and letters from your creditor. There’s a good chance your creditor will shut down the credit card account and you won’t realize it until you are denied in a store. That should prompt you to call the company and work out a solution. The creditor is most likely reporting the delinquency to the credit bureaus. At the same time, late fees and interest fees add to the total amount you owe.
• Your options: There is a chance you can reactivate the account by setting up a payment plan with the creditor.  If you’re facing a financial hardship, your creditor may establish a payment plan with reduced payments. Once you complete the plan, the account may be revived.

Stage 4: Charge-off Status
• What to expect: The creditor may sell or contract the account with a third-party debt collector. The creditor will notify the credit reporting agencies that your account is a charge-off and has gone into third-party collections.  The third-party debt collector will call and send emails and letters. They must abide by the Fair Debt Collections Practices Act, which outlines when third-party collectors can call and how often.
• Your options: Get verification of the debt from the third-party collector and confirm the collector’s identity with the original creditor. Set up a payment plan or offer a settlement. Try to negotiate a settlement with the original creditor, which may offer more flexibility. The creditor or debt collector probably won’t settle for less than half the balance.  Get the offer in writing with a clause that states the collector or creditor won’t sue you if you make the payments. Ensure that your credit report reflects any settlement as settled in full, which indicates your obligation to the creditor is fulfilled.

Stage 5: Court
• What to expect: You will receive a summons to appear in court regarding your debt. If the debt collector or creditor receives a judgment, then it may garnish your wages or seize assets such as bank accounts to satisfy the debt.
• Your options: If you receive a summons, show up for your court hearing.  There, you can dispute the debt – otherwise, it’s an automatic win for the collector.  The judge may also serve as a mediator and create some kind of repayment plan before choosing wage garnishment or the seizure of assets.

Things to Remember

• The federal Fair Debt Collections Practice Act doesn’t cover debt collection calls from the original creditor.

• Know your state laws. Each state has different laws regarding wage garnishment, seizure of assets and statute of limitations for debt collection.

• Any payment will restart the statute of limitations.

• All information regarding the delinquent account will live on your credit report for seven years from the date you first missed a payment.

• Third-party debt collectors sometimes sell off debt to another debt collector if they haven’t had any success. Make sure the debt shows up as the same account on your credit report. Sometimes it may look like another delinquent account, and you’ll want to dispute any duplicates.

Resources:,, ClearPoint Credit Counseling Solutions,, CredAbility Counseling Services, Experian, American Fair Credit Council

Happy 2nd Anniversary, Economic Recovery

Posted on July 07, 2011 by Saldutti

This is one anniversary few feel like celebrating.  Two years after economists say the Great Recession ended, the recovery has been the weakest and most lopsided of any since the 1930s.  After previous recessions, people in all income groups tended to benefit. This time, ordinary Americans are struggling with job insecurity, too much debt and pay raises that haven’t kept up with prices at the grocery store and gas station. The economy’s eager gains are going mostly to the wealthiest.

Workers’ wages and benefits make up 57.5 % of the economy, an all-time low. Until the mid-2000s, that figure had been remarkably stable – about 64% through boom and bust alike.  Executive pay is included in this figure, but rank-and-file workers are far more dependent on regular wages and benefits. A big chunk of the economy’s gains has gone to investors in the form of higher corporate profits.

Corporate profits are up by almost half since the recession ended in June 2009. In the first two years after the recessions of 1991 and 2001, profits rose 11% and 28%, respectively.  And an Associated Press analysis found that the typical CEO of a major company earned $9 million last year, up a fourth from 2009.

Driven by higher profits, the Dow Jones industrial average has staged a breathtaking 90% rally since bottoming at 6,547 on March 9, 2009. Those stock market gains go disproportionately to the wealthiest 10% of Americans, who own more than 80% of outstanding stock, according to a recent Bard College analysis. 

But if the Great Recession is long gone from Wall Street and corporate boardrooms, it lingers on Main Street:

• Unemployment has never been so high (9.1%) this long after any recession since World War II. At the same point after the previous three recessions, unemployment averaged just 6.8%.

• The average worker’s hourly wages, after accounting for inflation, were 1.6% lower in May than a year earlier. Rising gasoline and food prices have devoured any pay raises for most Americans.

• The jobs that are being created pay less than the ones that vanished in the recession. Higher-paying jobs in the private sector, the ones that pay roughly $19 to $31 an hour, made up 40% of the jobs lost from January 2008 to February 2010 but only 27% of the jobs created since then.

Hard times have made Americans more dependent than ever on social programs, which accounted for a record 18% of personal income in the last three months of 2010 before coming down a bit this year. Almost 45 million Americans are on food stamps, another record. 

Another study suggest that Americans have a long way to go before their finances will be strong enough to support robust spending: Despite cutting what they owe the past three years, the average household’s debts equal 119% of annual after-tax income. At the same point after the 1981-82 recession, debts were at 66%; after the 1990-91 recession, 85%; and after the 2001 recession, 114%.  Because the labor market remains so weak, most workers can’t demand bigger raises or look for better jobs.  Instead, workers are toughing it out, thankful they have jobs at all. Just 1.7 million workers have quit their job each month this year, down from 2.8 million a month in 2007. 

The toll of all this shows in consumer confidence, a measure of how good people feel about the economy. According to the Conference Board’s index, it’s at 58.5. Healthy is more like 90. By this point after the past three recessions, it was an average of 87.  How gloomy are Americans? A USA Today/Gallup poll eight weeks ago found that 55% think the recession continues, even if the experts say it’s been over for two years. That includes the 29% who go even further — they say it feels more like a depression.

Source:  Associated Press

Student Loans 101: Paying off Debt

Posted on June 28, 2011 by Saldutti

You’ve graduated. Congratulations! Now what about those student loans? The average graduate this year has $24,000 in loans – but many have nearly $75,000. Don’t even think of leaving campus until you’ve had a meeting at the financial aid office. This “exit counseling” for federal student loans is a requirement — and failure to go through the process could hold up your diploma or transcripts.

So don’t procrastinate when it comes to dealing with your student loans. Remember, it is your responsibility to stay in contact with your student loan servicing agency or lending company. When you move, keep your address current. Even if you don’t receive a bill, your loan payment is due on time. There’s really no way to escape your student loans. They can’t be discharged in bankruptcy. And if you default, the government will eventually take its money from your Social Security check. Plus, defaults on student loans will have a big impact on your credit report. So it’s worth paying attention so you don’t have to pay forever. Here are some other things to think about as you deal with your student loans after graduation:

Track your loans – The “exit counseling” process is designed to help you keep track of all your student loans — except for private loans and PLUS loans taken out by your parents. If you haven’t kept track of your student loans, you can go to the National Student Loan Data System at

Check the grace period – After leaving school (or dropping below half-time status) you have a six-month grace period on Stafford Loans and nine months on Perkins Loans. Individual private loans may have different repayment start times. Remind your parents that PLUS loans typically do not qualify for a grace period.

Understand interest rates – Current student loans carry fixed interest rates. But if you have federal student loans taken out before 2010, under the FFEL program where private lenders disbursed the loans, you may get a break on interest rates by agreeing to automatic monthly deductions. Or you may get a lower rate after completing several years of on-time payments.

Understand repayment options – There are two basic repayment plans — the standard 10-year plan, and a stretch plan that allows you to make payments over 30 years. If you take the latter route, you can choose a fixed payment every month, or graduated payments that start low and increase every two years. Just remember that the longer you take to repay the loan, the more interest you will pay over the years. That can really add up.  Check the calculators at to see how much more it will cost to stretch out your repayment period.

Income-based repayment plan – Recognizing the burden of student loans, starting in 2009 the government created the income-based repayment plan.  Using your current income information, an affordable monthly payment is created. This program can be used for 25 years, and at the end of that time, any remaining balance is discharged if you have kept up with your payments. There is more information at

Deferring loans – One other possibility is deferring your student loans. This is often allowed when you go back to school on at least a half-time basis, or go on to graduate school. But interest keeps accruing unless it is a subsidized Stafford loan.

Forebearance – Proving that it is not completely hard-hearted, the government may allow you to temporarily postpone payments on your student loan. That will require documented proof of unemployment or some other qualifying circumstance. A deferment can be for up to 12 months and may be extended, but interest continues to accrue.

Forgiveness? – Well, that’s the most unlikely solution to your repayment problems. Simply being unemployed will not qualify you for forgiveness. But you can contact your lender or loan servicing agency if you truly have a sad story to tell. Remember, a loan that is late by even one day can cost you a discount for on-time payment. If you are 21 days late, a loan goes into delinquency, and you can expect a collection notice if you are a month late.  A two months’ delay will be a delinquency that is reported to the credit bureaus. After 270 days, the loan is considered in default — and the borrower is subject to wage garnishment and other penalties.

Your best bet in dealing with student loans is to be proactive. Go to and use the repayment calculators to figure out how much your monthly payment will be under the standard 10-year repayment plan. That’s the place to start if you know you will have an income. Set up an automatic monthly payment so you can get the loan behind you before you consider buying a home or starting a family. That’s the sensible thing to do.

Retirement at Age 80?

Posted on June 22, 2011 by Saldutti

Americans better get used to working longer, even until they are 80 years old, according to a study by the Employee Research Benefit Institute (via Robert Powell at MarketWatch).  Naturally, those with lower incomes will need to work longer.

Here’s how it breaks down (via MarketWatch):

• If you make around $11,700 a year – you have to work to age 84 to have a 50% chance of affording retirement.
• If you make between $11,700-$31,200 a year – you have to work to age 76 to have a 50% chance affording retirement
• If you make between $31,200-$72,500 a year – you have to work to age 72 to have a 50% chance of affording retirement.
• If you make $72,500 or more a year – you have to work to age 65 to have a 50% chance of affording retirement.

This study does point out one bright spot for those working past 65 though. If you are putting your money into some kind of retirement fund, your chances of saving enough increase substantially.

From the report:

One of the factors that makes a major difference in the percentage of households satisfying the retirement income adequacy thresholds at any retirement age is whether the worker is still participating in a defined contribution plan after age 65. This factor results in at least a 10 percentage point difference in the majority of the retirement age/income combinations investigated.

What's It Worth?

Posted on June 14, 2011 by Saldutti

The Monetary Value Of A Happy Marriage
Economists David Blanchflower and Andrew Oswald calculated the “compensation value” of life events like employment and marriage by surveying 100,000 Americans and Britons from the 1970s to the 1990s.  In terms of happiness, they found that marriage was worth an impressive $100,000 annually.  Meanwhile the psychological value of employment is worth $60,000 annually.  New York Times columnist David Brooks mentioned this study in his new book, The Social Animal: The Hidden Sources of Love, Character and Achievement. But he went a step further:

People vastly overvalue work, money, and real estate. They vastly undervalue intimate bonds and the importance of arduous challenges. The average Americans say that if they could make only $90,000 more a year, they could “fulfill all their dreams.” But evidence suggests they are wrong. The deeper the relationships a person has, the happier he or she will be. People in long-term marriages are much happier than people who aren’t.

So find someone, and choose wisely.

A “Mom” Paycheck
Ever wonder what mom should be paid for her work as mom? has valuated the “mom job” of both the Working and Stay-at-Home Moms.  Based on a survey of over 6,500 mothers, determined that the time mothers spend performing 10 typical job functions would equate to an annual salary of $115,432 for a stay-at-home mom. Working moms ‘at-home’ salary is $63,472 in 2011; this is in addition to the salary they earn in the workplace.

The job titles that best matched a mom’s definition of her work are (in order of hours spent per week): housekeeper, day care center teacher, cook, computer operator, facilities manager, van driver, psychologist, laundry machine operator, janitor and chief executive officer.

A Father’s Salary also conducts an annual survey which determines how handsomely dads would be compensated if parenting came with a paycheck. Salaries for 1,074 stay-at-home and working dads were created using the 10 most common “dad jobs” including: day care center teacher, CEO, psychologist, cook, groundskeeper, laundry machine operator, computer operator, facilities manager, maintenance worker and van driver.  This year’s survey found stay-at-home dads work an average of 52.9 hours a week. Factoring in base pay plus overtime, these dads would earn $60,128 a year. Working fathers would be paid $33,858 a year after spending 30.6 hours a week on parenting duties. And that’s on top of working an average of 44 hours a week at their day jobs.

The dads in this year’s survey are busy looking after their kids, preparing meals, doing work around the house and ensuring the mental well-being of their children.  A recession, combined with a shift towards shared parenting, led to 154,000 American men becoming stay-at-home dads in 2010.

5 Uncommon Ways to Raise Your Credit Score

Posted on June 07, 2011 by Saldutti

Most consumers know the drill when cultivating their credit score – pay on time, try to wipe out the balance every month and never close too many accounts at once.  But beyond the basics, many consumers are still in the dark about what makes their credit scores go up and down.  Consumers understand that the credit utilization ratio – the total amount of revolving credit someone uses in a month, compared to the amount of available credit they have – is a major factor in calculating a score.  But did you know that it’s often calculated from the total on the statement date, not the due date? So even if you pay balances in full every month, a card issuer may report a balance. And that can hurt your credit score. offers these five tips to boost your credit rating:

  1. Pay bills before the statement date – Typically, the balance as of your last statement date is the balance that will report to the bureaus, says Barry Paperno, consumer operations manager with  So if you pay most of the bill before the statement date, you can lower your utilization rate – and that can equal a higher credit score.  “How much you owe is 30 percent of your score – and the utilization ratio is a large part of that,” says Paperno.  If you charge a balance every month but pay it off and can’t understand why your score isn’t higher, it could be that your utilization ratio is what’s depressing your score.  This might not work with every card – some lenders don’t use the balance on your statement date when they report to the bureaus. Instead, they select another day and report the card balance on that date instead.  Paperno’s advice: Call your lender to ask when the balance gets reported.
  2. Make Multiple Payments – Another way to lower the balance on your statement date is to make periodic payments throughout the month.  If you use your card throughout the week for everyday expenses and pay it off every Friday, you’ll cut the amount of credit you’re using at any one time. Check with your card issuer to learn how they handle multiple monthly payments.  However, your card could place a limit on the number of times you can pay in a month.  While most cards will accept two or three payments, if you are paying weekly or more, you want to call and make sure they are set up to handle that many multiple payments.
  3. Ask for a ‘Good-Will Deletion’ – If you only have one or two bad marks on your credit record, you may be able to get them expunged, says John Ulzheimer, president of consumer education for  If you’ve paid late, but have an otherwise spotless credit history, you can ask your lender for a “good-will deletion.”  This doesn’t mean it is wrong or was reported incorrectly – rather, what you’re doing is asking the creditor to cut you some slack.  The good news: “You’ll be surprised how many times they will,” says Ulzheimer.  The bad news: “If you’re habitually late, it won’t work,” he says. This is strictly for folks who err rarely.  As for whom to ask, start with customer service but you may have to go up the ladder. Try to make your request as soon after the error as you can – it can make a big difference in your credit score. According to Ulzheimer, “If you have two or three bad things on (your) credit report, and you get one or two removed through good-will deletion, you will be surprised how quickly your score will go up.”
  4.  Pay for Removal – If you have an account that’s gone into collection, sometimes collectors will agree to remove the debt from your credit report if you agree to pay if off.  But before you agree to or pay anything, you want the arrangement in writing. Get a letter on company letterhead that spells out they will remove the debt from all three major credit-reporting agencies.  The process is sometimes called “pay for deletion,” Ulzheimer says. And “while credit bureaus frown on those arrangements, it’s not their data that’s being reported.”
  5. Protect Yourself in a Short Sale – After a short sale, the mortgage lender often will report to credit bureaus that the home loan was settled for less than the full amount. In addition, it can also note the amount of the deficit as “balance owed” on the credit report, even though the obligation has been finalized and no additional money is owed.  While the short sale will damage your credit score dramatically (as much as a foreclosure, according to examples recently released by FICO), you can mitigate the damage slightly by arranging with the lender not to report a balance owed.  The best time to negotiate this with the lender: before or during the short sale process, says Ulzheimer. While you can attempt it after the fact, that’s not as practical.  “After it’s been paid, the lender starts to lose interest in speaking with a former customer.”

Get Out of Town! Americans Suffer from Vacation Deficit Disorder

Posted on May 31, 2011 by Saldutti

Americans work 100 more hours per year than the Japanese. We’re also the only country in the world that doesn’t require paid vacation leave. In his book, Work to Live:  The Guide to Getting a Life, Joe Robinson says that most of us suffer from “vacation deficit disorder.”  Ever since the early 80s, a false sense of urgency has loomed over American workers — creating “a world with no boundaries,” he tells Psychology Today.  Combine that with the fact that more of us are doing multiple jobs since the recession, and there’s a high burnout factor.

To medicate this, vacation is necessary. According to Robinson, it takes a full two weeks to recharge. But since that’s unrealistic for most U.S. workers, he recommends completely cutting yourself off from work for a few days. Without the mental break, it’s as if you never left the office. That means not dwelling over looming deadlines, or even relationships with colleagues, during your time at the beach.  “You have to unpack before you pack,” he says. “Put together an unpacking list of the stuff that has no business going with you.”

Full-time workers in most countries all received paid vacation days, but no one forces you to use that time.  Ipsos Global and Reuters surveyed 13,000 people in developed countries to see what people are least likely to use their vacation days.  Here are the top 10 Workaholic Countries in the World (courtesy of the Business Insider):

 10.  China – Only 65% take all their allotted vacation days.

  • There are 11 federal holidays
  • Employers have to offer at least 10 vacation days

9.  Sweden – Only 63% take all their allotted vacation days.

  • There are 11 federal holidays
  • They clock in at about 1,610 hours per year.

8.  India – Only 59% take all their allotted vacation days.

  • They get 16 federal holidays off from work
  • Employers are only required to offer 12 vacation days

7.  Brazil – Only 59% take all their allotted vacation days.

  • There are 11 federal holidays
  • Employers are required to offer 30 additional vacation days

6.  Canada – Only 58% take all their allotted vacation days.

  • There are 9 federal holidays per year
  • They clock an average of 1,699 hours per year

5.  United States – Only 57% take all their allotted vacation days.

  • There are 10 federal holidays
  • No requirement for how much time off an employer must offer, but average is 15 days.
  • They clock an average of 1,768 hours per year.

4.  South Korea – Only 53% take all their allotted vacation days.

  • There are 15 federal holidays.
  • Employers are required to offer 19 days of vacation time

3.  South Africa – Only 47% take all their allotted vacation days.

  • There are 12 federal holidays off
  • Employers are required to offer 21 vacation days

2.  Australia – Only 47% take all their allotted vacation days.

  • There are 8 federal holidays off
  • They clock an average of 1,690 hours per year

1.  Japan – Only 33% take all their allotted vacation days.

  • There are 16 federal holidays
  • They clock an average of 1,714 hours per year.

Uptick in Corporate Fraud – Protect Your Business

Posted on May 24, 2011 by Saldutti

When it comes to survival, corporate fraud seems to be as invincible as the cockroach. Despite increased legislative attention focused on putting a stop to Foreign Corrupt Practices Act violations, kickbacks, and the like, a report released this week suggests that those activities are still very much on the rise.

According to the “Quarterly Corporate Fraud Index,” put out by The Network, Inc., and BDO Consulting, employee reports of corporate fraud have nearly doubled since the inception of the index in 2005. There were 6,100 reports of fraud-related incidents in the first quarter of this year, compared to 2,500 reports made during the same period in 2005.

The Network offers a third-party ethics hotline to more than 1,100 of its 3,400 corporate clients worldwide. Its quarterly reports examine fraud-related incident report activity gathered from almost 15 million employees at all corporate levels.

Doug Wells, senior vice president of call center operations at The Network, said that the company considers fraud-related incidents to include anything from auditing irregularities to violations of corporate policy that result in a loss. “These can be less severe from a compensation or financial standpoint—up to fraud that results in a corporation ending with in a $20 million settlement,” said Wells.  “The long story is that fraud-related incidents continue to remain high and essentially have done so going back to mid-to-late 2009.”

Wells offers this advice:  “Prevent, detect, and analyze.  Have a code of conduct that people understand.”  He said companies can encourage employees to report fraud internally by making employees feel comfortable talking to their managers or reporting fraud through a hotline. And once fraud has been detected, analyze the activity so that the appropriate corrective action can take place.

Additionally, offers these 7 useful steps that all companies can take:

1. Start at the top – “It’s critical for both the board of directors and executive management to set the tone for the corporation and its operating units,” says James Davidson, managing director at Avant Advisory Group and a certified fraud examiner. In fact, this may be the most important component of the control environment necessary for deterring fraud and fostering transparency. Plenty of lip service has been paid to the importance of tone at the top, of course, and it is often cited as the key to the success of…well, almost everything. But when it comes to curtailing fraud, it really does matter, because without it, an “entire culture of workplace fraud” can take root, according to the Association of Certified Fraud Examiners (ACFE).

2. Educate employees – The ACFE also maintains that employee education is the foundation for preventing and detecting occupational fraud (defined as “the use of one’s occupation for personal enrichment through the deliberate misuse or application of the employing organization’s resources or assets”), because employees are a company’s top fraud-detection resource. They must be trained in what constitutes fraud, how it hurts everyone in the company, and how to effectively report any questionable activity.

3. Change the culture ASAP – Goldman Sachs, which has a reputation of functioning as a “black-box” organization, recently announced plans to change its culture. The investment-banking firm claims it will become more transparent and ensure its business processes put customer interests first. That’s easier said than done, however. “It’s difficult to bring about a far-reaching cultural change in well-established companies,” says Thomas Quilty of BD Consulting and Investigations. “That’s not true, however, for first-generation or even second-generation companies, where the employees have a stake in the company and are more motivated to protect it from fraud.” More-established companies face a larger hurdle. “Current employees didn’t build the company,” Quilty says, “so they’re less interested in protecting it against fraudsters.”

4. Surprise! We’re having an audit – Another effective, yet underutilized, tool in the fight against fraud (according to the ACFE) is surprise audits. Fewer than 30% of victim organizations in the ACFE’s recent studies conduct surprise audits. Those that do, however, tend to have lower fraud losses and detect fraud more quickly. While surprise audits can be useful in detecting fraud, their most important benefit is in preventing fraud by creating a perception that it will be detected. Generally speaking, occupational-fraud perpetrators commit fraud only if they believe they will not get caught.

 5. Check (and double-check) employee backgrounds – Due diligence is essential in evaluating the credentials and competence of new hires and becoming aware of any issues regarding personal integrity. That means, at a minimum, that companies should confirm an applicant’s work history and education as detailed on his or her résumé and follow up thoroughly with all references provided. Any embellished or false information or undisclosed history may be a red flag. The same scrutiny should be applied to new and existing suppliers, customers, and business partners, says Toby J. F. Bishop, Director of the Deloitte Forensic Center for Deloitte Financial Advisory Services.  (A number of outside security and risk-management firms, such as Kroll, will perform extensive background checks on a company’s behalf.) Finally, the ACFE recommends that after someone joins your staff, an evaluation of the new employee’s compliance with company ethics and antifraud programs should be incorporated into his or her regular performance reviews.

6. Prepare a data-breach response plan – With information loss and data breaches now the most common form of fraud, according to Kroll, it’s essential to establish a comprehensive response plan that will enable decisive action and prevent operational paralysis when a data breach occurs. Disseminate this plan throughout the company to ensure that everyone knows what to do in the event of a breach. In preparation, consider the following: Who will have a role in reviewing the policies and procedures on a predictable timetable? What are the physical security elements? When and how will they be tested? As additional motivation, consider that new regulations now impose severe penalties on firms that don’t have this aspect of security nailed down.

7. Make sure the board of directors plays its role – “Corporate governance is the joint responsibility of both the board of directors and management,” says James Davidson of Avant Advisory Group. Now that the SEC has mandated greater board involvement in risk management, apprising the board of fraud risk and responses becomes a top priority for the CFO. It won’t be fun, and, as Davidson notes, if board directors are at the top of their game they will push back and demand even more information. But that kind of dialogue can be invaluable in uncovering vulnerabilities.


Posted on May 17, 2011 by Saldutti

Saldutti Law, LLC is pleased to be the first successful creditor firm in the state to petition the Chancery Division Court in Atlantic County for a receiver to take over and sell various condos that were in the foreclosure process.  The firm recently represented an Atlantic City condo association which was facing a high volume of foreclosures.  The firm petitioned the court to allow the condos to be listed and sold prior to foreclosure completion.  The judge ruled in favor of the condo association, citing the preservation of the property.  This significant victory will enable the condo associations to obtain new owners and circumvent what has become a two and a half year foreclosure process.  The ruling also eases the burden of the taxes and fees on current condo owners.


Posted on May 10, 2011 by Saldutti

Consumer spending habits are sure to be affected by rising food and gas costs. A report by Citi’s Jeff Black gives us the breakdown of spending habits of various income groups across America in 2009.  For example, households with an annual average income of over $150,000 spent about 83% of their income and expenditures on gas and motor oil made up about 2.6% of their overall expenses.  For those at the lower end, spending on gasoline is much higher.

Income group: Less than $70,000
Average annual expenditure: $33,810 (including households that make as little as $0/year).
This income group spends a lot less on housing, personal insurance and pensions, transportation, and entertainment compared with the others. Its spending on apparel and services was relatively high and annual spending on gas and motor oil amounted to $1,573.
• Housing: $12,509
• Healthcare: $2,541
• Personal insurance and pensions: $2,344
• Entertainment: $1,749
• Education: $519
• Food: $4,798
• Cash contributions: $1,052

Income group:  $70,000 – $79,000
Average annual expenditure: $57,833
This income group spends significantly more housing than the previous income group while its spending on entertainment is relatively high. Annual spending on gasoline and motor oil amounted to $2,470.
• Housing: $19,127
• Healthcare: $3,679
• Personal insurance and pensions: $6,968
• Entertainment: $3,364
• Education: $783
• Food: $7,818
• Cash contributions: $1,685

Income Group:  $80,000 – $99,999
Average annual expenditure: $65,027
This income group spends significantly more on education and less on tobacco and other smoke supplies than lower income groups. Annual spending on gas and motor oil totaled $2,669.
• Housing: $21,666
• Healthcare: $4,158
• Personal insurance and pensions: $8,368
• Entertainment: $3,625
• Education: $1,259
• Food: $8,359
• Cash contributions: $2,414

Income Group:  $100,000 – $119,999
Average annual expenditure: $76,140
There is a marked jump in personal insurance and pension spending for this income group. Annual spending on gas and motor oil expenses came to $2,942.
• Housing: $23,907
• Healthcare: $4,385
• Personal insurance and pensions: $10,764
• Entertainment: $4,616
• Education: $1,828
• Food: $9,622
• Cash contributions: $2,443

Income Group:  $120,000 – $149,999
Average annual expenditure: $85,806
This income group spends the least on tobacco and other smoking supplies and significantly more on personal insurance and pensions than lower income groups. Annual spending on gas and motor oil expenses added up to $3,090.
• Housing: $27,923
• Healthcare: $4,399
• Personal insurance and pensions: $13,559
• Entertainment: $4,824
• Education: $2,442
• Food: $9,886
• Cash contributions: $2,996

Income group: $150,000 and more
Average annual expenditure: $124,306
This income group spends more than three times as much on housing, as the income group that earns less than $70,000. It also spends significantly more on personal insurance and pensions, food, and entertainment. Its annual expenses on gas and motor oil amount to $3,257.
• Housing: $38,824
• Healthcare: $5,242
• Personal insurance and pensions: $21,302
• Entertainment: $7,228
• Education: $4,831
• Food: $13,234
• Cash contributions: $6,002