Hoglund Law Blog

Eight States which include Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont, and Washington all raised the minimum wage to keep pace with inflation.  The increase in these States ranged between 28 and 37 cents per hour and will take affect January 1.  More than 1.4 million low-income earners will see their wages go up on New Year’s Day.  While the Federal minimum wage is at $7.25 an hour, workers in Washington State will earn a minimum of $9.04 thanks to their recent wage increase.  18 States total, including Washington, D.C., have rates above the federal level.

The wage increase in the aforementioned states will result in an extra $582 to $770 a year for full-time workers.  The non-profit advocacy group, National Employment Law Project contends that the minimum wage increases will act as a mini-boost to the economy.  The expected increase in wages will result in an increase in those wages being spent, which is projected to add $366 million to the nation’s gross domestic product.  The National Employment Law Project also projects that the minimum wage increases also will result in a creation of more than 3,000 full-time jobs.

Paul Sonn, legal co-director at NELP states, “Increasing minimum wage is a key form of local stimulus.”  The increase in wages will put money back into the pockets of low-income families who will then spend that money at the local businesses.  Paul Sonn also believes that the eight states that are raising their minimum wage on January 1 are protecting themselves in case Congress can’t reach an agreement to extend the payroll tax break beyond February.  He believes that the boost in incomes for individuals living in those eight states will more than offset the loss that could come from the inability of Congress to extend the payroll tax break.

Source:

Blake Ellis, Minimum wage increases for workers in eight states, http://money.cnn.com/2011/12/23/news/economy/minimum_wage_increases/index.htm?iid=Popular (accessed 12/27/11)

Some economic experts and analysts contend that there is little chance for a housing recovery.  That extremely pessimistic outlook is not based on feelings, but upon solid economic data.  The year of 2011 was a sad story for the housing market.  The market saw record low 30-year mortgage rates with few people taking advantage of the rates to buy new homes.  The New Year is likely to bring much of the same.  Doug Duncan, vice president and chief economist at Fannie Mae, contends that there might be a slight uptick in houses sold but the home prices likely will be down.  This means that although more houses will be sold in 2012, the total amount of money spent on purchases is likely to be the same as in 2011.

Despite the fact that the Federal Reserve has pledged to keep rates low through 2013, many content that because of the high unemployment and the historically low home prices, there will be no recovery of the housing market for the foreseeable future.  Last year saw a total of $1.3 trillion in home lending, which is down from $1.7 trillion in 2010 and $3.3 trillion in 2005.  Another disturbing figure is the fact that much of the $1.3 trillion in home lending last year did not result in new home purchases.  Approximately 4 out of 5 mortgage applications were for refinancing current mortgages.  Borrowers were taking advantage of the historically low rates, which averaged less than 4%, not to purchase new houses, but to refinance their current homes.

Not all analysts predict such doom and gloom for the housing market.  Others are optimistic about the future of the market.  Former top economics advisor to the White House and Wells Fargo & Co., Sung Won Sohn states, “Housing has hit the bottom and has begun to heal slowly.”  The events that have taken place over the past few years have “set the stage for a rebound” as Sung contends.  Whether or not we are to see a recovery in the near future most would contend that given the extreme damage that was inflicted on the housing market any form of recovery is likely to be slow.

Source:

E. Scott Reckard, Low mortgage rates likely to continue through 2012, experts say, http://www.latimes.com/business/la-fi-mortgage-rates-20120103,0,2240865.story (accessed 12/4/12)

A procedure known as platelet rich plasma, or PRP injections, are being used to alleviate arthritis and other joint pain.  Avivia Gianetti is an active golfer who is in her late 50s.  However, soreness and pain running down her arms left her unable to play her favorite sport.  Not keen on the idea of surgery, her doctor suggested a new procedure known as PRP.  The procedure allows the patient to be relieved of pain without having to go under the knife.  In the procedure, the patient’s own plasma, a natural nutrient found in blood, is separated from the blood cells and injected into the damaged joints.  The PRP injection helps repair damaged cartilage and joints.

Notable athletes such as Kobe Bryant and Matt Forte have been using PRP to alleviate joint pain; however, baby boomers may want to take advantage of this alternative to surgery as well.  Due to the aging baby boomer population joint replacements are rapidly growing.  Knee replacement surgeries have doubled over the past decade.  Although many experts contend that PRP injections are not a proven substitute for surgery, they may be a good option for some.  Dr. Jazrawi states, “This is certainly, potentially one treatment option that may be utilized, but it’s not the magic bullet.”

Dr. Jazrawi uses the PRP injections most often in the treatment of chronic arthritis.  Patients are able to schedule a quick visit with Dr. Jazrawi to receive the injections.  And more often than not, one quick injection in Dr. Jazrawi’s office will allow a patient to get right back to their active lifestyle.  Dr. Jazrawi notes that PRP should not be the first-line of treatment.  Instead, he suggests that patients maintain an active and healthy lifestyle with dieting and exercise.  There is always a risk in applying new technology, and Dr. Jazrawi asserts that he does not want to apply this new technology in a haphazard manner.

Source:

Lara Salahi, Cutting Edge: Joint Injections Heal Baby Boomer Arthritis, http://abcnews.go.com/Health/Wellness/cutting-edge-joint-injections-heal-baby-boomer-arthritis/story?id=15214643 (accessed 12/22/2011)

In the 40-year history of Freddie Mac’s Primary Mortgage Market Survey, interest rates on a 30-year fixed-rate loan is the lowest it has ever been.  Just in time for the holidays, the mortgage rate on a 30-year mortgage is now 3.94%.  Mortgage rates have been falling over the entire year, and since the beginning of the year, the rate has fallen .9%.  Frank Nothaft, Freddie’s chief economist notes the decrease in rates over the year results in a savings of $1,200 a year for a homeowner with a $200,000 mortgage.

These low rates are resulting in an increase in home sales, which is a good sign for the economy.  This past month saw the greatest new home sales since January.  Senior financial analyst at Bankrate.com, Greg McBride, contends that mortgage rates should remain low for much of 2012.  “For well-qualified buyers, interest rates should be no impediment to home buying in 2012,” said McBride.

Existing homeowners are taking advantage of these historic rates by refinancing their old loans into more affordable ones.  Nearly 80% of all mortgage applications last week came from existing homeowners.  McBride expects that lenders will ease up on borrowing requirements only slightly.  Some lenders are starting to require only a 720 credit score, where previously a 740 credit score was required for the best mortgage rates.  These baby steps will, however, help more people gain access to these historic rates.

Source:

Les Christie, Mortgage rates hit another record low, http://money.cnn.com/2011/12/22/real_estate/mortgage_rates/index.htm?iid=HP_LN (accessed 12/22/2011)

Former Chicago Bulls star, Scottie Pippen, most notably known for his time playing alongside Michael Jordan in the Bulls six NBA championships, has filed a multimillion-dollar federal lawsuit Tuesday, December 13, 2011.  The lawsuit claims that several websites and media outlets falsely accused Scottie Pippen of filing for bankruptcy.  CNBC.com was among one of the many news outlets that reported Scottie Pippen’s alleged bankruptcy filing.  CNBC.com had listen Pippen in one of the “15 Athletes Gone Bankrupt.”  The article went on to mention that Pippen had lost $120 million in career earnings, including a $4 million corporate jet.

Scottie Pippen contends that all the reports about his bankruptcy are completely false and still has “substantial net worth, which has not been less than approximately $40 million in the last 10 years.”  The federal lawsuit names Comcast Corp., General Electric Co. and CBS Corp, among others.  The lawsuit contains three claims including negligence, false light and defamation.  The suit seeks approximately $9 million in damages.

Source:

Allison Horton, Scottie Pippen files suit against those who said he filed for bankruptcy, http://www.suntimes.com/sports/basketball/bulls/9426888-579/scottie-pippen-files-suit-against-those-who-said-he-filed-for-bankruptcy.html (accessed 12/13/2011)

In an astounding study presented at Chicago’s Radiological Society of North America, a team from the Leiden University Medical Center found that Type 2 diabetes can be eliminated in patients in just four months.  What is the cure for Type 2 diabetes?  The answer to that question is simpler than you might think.  A low-calorie diet has shown effectively to cure Type 2 diabetes in just four months.

The Leiden University Medical Center in the Netherlands conducted a study that included seven men and eight women with Type 2 diabetes.  Each subject consumed just 500 calories a day for four months.  At the end of the study, the low-calorie diet effectively eliminated insulin dependence and reduced the amounts of dangerous fats around the heart in all 15 of the patients.  “It is striking to see how a relatively simple intervention of a very low-calorie diet effectively cures Type 2 diabetes,” said lead researcher Sebastian Hammer.

This extreme dieting may have long lasting effects as well.  In a similar study conducted by Newcastle University in the United Kingdom, many patients in the study remained disease free even several months after completing the program and returning to a normal diet.  Although the results of these tests are very promising, doctors warn that this type of therapy is not for everyone, and patients should consult with their doctors before beginning this type of reduced-calorie diet.

Source:

Yahoo! News, Reduced-calorie diet could beat diabetes in four months, http://news.yahoo.com/reduced-calorie-diet-could-beat-diabetes-four-months-164141607.html (accessed 12/6/2011)

Earlier in the year, the Social Security Administration in Baltimore decided to implement changes in the federal disability benefits program to reduce the straining backlog of applications.  The Social Security Administration implemented new medical examination policies, which Social Security Administration spokesman Mark Hinkle contends, “decisions are timelier… but this does not mean we are sacrificing quality for speed.”  However, some doctors have criticized some of the new policies.

New policies resulted in a vast increase in the number of people receiving benefits.  Doctors have been working harder and faster to meet the Social Security Administrations new standards.  The new policy resulted in a pay cut for doctors unless they were able to work faster to get through more cases.  Additionally doctors were required to stray farther from their areas of expertise.  As a result of the policy change, 45 of the 140 doctors working in the Baltimore offices either quit or were fired.

After implementation of the new procedures in Baltimore, eye doctors were assigned back-pain cases, dermatologists reviewed strokes, and gastroenterologists reviewed cases of deafness.  Although doctors receive extensive training in a broad range of cases, some of doctors have not examined certain medical issues in years.  As a result, Dr. Novin notes that some people who shouldn’t be getting benefits are getting it, and some people who should be getting it aren’t getting it.  Dr. Novan, the former chief of surgery at Baltimore’s Harbor Hospital contends that he was fired because he was pressured by a supervisor to change his medical opinion and award benefits when he did not believe the person was prevented from working.

The Social Security Administration previously has tried to improve the medical screening process; however, little success has resulted.  The Social Security Disability program certainly has not been an easy program to fix.  The agency is under extreme political pressure to reduce the backlog of cases, but at the same time, the changes in medical procedures is creating problems of its own.  Whatever, the final consensus is in Baltimore will surely affect the program in the rest of the country.  Many consider the Baltimore the flagship office of the Social Security Disability program.

Source:

Damian Paletta, Doctor Revolt Shakes Disability Program, http://online.wsj.com/article/SB10001424052970204621904577016221945984492.html (accessed11/22/2011)

As a general rule taxes are nondischargeable in a bankruptcy. However, in some circumstances, income taxes can be discharged in a bankruptcy. In order for income taxes to be eligible for a discharge in a bankruptcy, the taxes must have been filed for at least two years and the taxes must have been due and owing for at least three. For example, 2007 taxes became due and owing in 2008 and they can therefore be discharged after April 15^th in 2011 assuming that they were filed on time in 2008. There are some qualifications to this. If certain events have occurred during the three year period, the taxes will not be discharged. For example, an assessment will cause the waiting period to be extended. There are a variety of other tolling events. It is best to get a professional opinion regarding the dischargeability of taxes before assuming that a bankruptcy will wipe out the obligation.

Consumer spending over the last three quarters of 2011 has shown a reversion to credit card use over debit card.  Silvio Tavares, senior vice president at First Data, which processes card transactions for 4.1 million merchants, notes that “Consumers have spent the last couple of years de-leveraging and reducing credit card use, but the past month — and since April — they’ve been using their credit cards more and are starting to return to pre-recession buying.”  The first quarter of 2011 saw an 8.2% increase in credit card use, followed by a 9% increase in the second quarter and a 10.6% increase in the third quarter.  On the other hand, debit card use increased by 9.6%, 8.3%, and 5.9% in quarters one, two and three respectively.  On black Friday alone, credit card use jumped 7.4% from the same day a year ago.

A major contributing factor to the rise in credit card use is that the banks are encouraging consumers to switch from debit to credit.  Credit card use is more profitable and cost effective for banks compared to debit/checking accounts.  To get consumers to make the switch, credit card mailings have increase 85% since early 2010, and many of these credit card offers come with new perks such as rewards points, miles, or cash rebates.  The number of credit cards offering such perks has increased over the past two years from 6 out of 10 of the credit card offers in 2009 to 8 out of 10 credit card offers today.

Analysts believe that an increase in credit card offers will continue to intensify as debit cards become less cost-effective for banks.  Banks have started to raise checking account fees and charge debit card usage fees, all of which is part of the attempt to get consumers to switch to credit cards.  Although consumers will not be charged with the same usage fees on their credit cards, Bill Hardekopf, CEO of LowCards.com warns consumers to pay off their balance each month because the interest payments will be much greater than any new debit card fee.

Source:

Blake Ellis, Credit card use is on the rise, http://money.cnn.com/2011/12/05/pf/credit_card_use/index.htm?iid=SF_PF_LN (accessed 12/7/11)

While the once large auto business network owner Denny Hecker serves out his 10-year sentence in the Duluth Federal Prison Camp, bankruptcy trustee Randy Seaver is on the search for hidden assets.  Randy Seaver, assigned trustee in handling the bankruptcy estate of Denny Hecker, believes that there are hidden assets and the persons may have been aiding and abetting Hecker while he in prison.  To begin his search, Seaver has asked for permission to question several people close to Hecker and his wife Christi Rowan-Hecker.

David Leibowitz, a bankruptcy expert from Chicago believes this is a bit of a fishing expedition on Seaver’s part, but contends, “Seaver obviously feels there’s a fish in the water here.”  Leibowitz goes on the mention that this activity is consistent with the aggressive manner in which Seaver has handled the case.  Seaver has sought to speak with Hecker’s second wife Sandra Hecker, Hecker’s former lawyer John Neve, as well as and Barbara Tourville, George Johnson, and Molly Jensen, all of whom have allegedly put money in Hecker’s prison accounts and have been assisting him in business and financial matters.

Rowan-Hecker, who married Denny via telephone back in March, recently was released from a federal prison in Illinois to a halfway house in Minneapolis where she will finish out her 14-month sentence for bankruptcy fraud.  This is a typical procedure for inmates nearing the end of their sentence to be transferred to a halfway house for the last one to six months of their sentence.  During this time at the halfway house, Rowan-Hecker will be assisted in finding a job and helping her return to society.

Source:

MaryJo Webster, Hecker trustee seeks hidden assets; Rowan released to Minnesota halfway house, http://www.twincities.com/business/ci_19489778 (accessed 12/9/2011)