Rusty Law

This is NOT the End

By October 21, 2010 all lawyers will be abolished according to the movie, Back to the Future II.  The CERN may accelerate the apocalypse, though the ancient Mayans have annihilation engraved for 2012.  Right now, though, this is NOT the end of the world.  

Shakespeare has been trying to get rid of lawyers since Henry VI, yet the American Bar Association membership is at about 400,000.  Not everything people say comes true.  Even Nostradamus missed the creation of his own website.  

The unemployment rate is over 11%, which is not the 25% of the Great Depression.  Over 100 banks have failed this year, but we do not have a run on the banks.  Since the creation of the FDIC, money is more secure.  

Leave science and technology to manufacture the end of the world, not the economy, and certainly not the lawyers!  

Have a safe and happy New Year!  

Ever After

Divorce and foreclosure are often together as the winter and foul weather.  Regrettably, suicide sometimes figures in also.  While financial ruin and marital dissolution are biologically survivable, death is not.  Suicide may negate the need and expense of divorce, but it is really not the happiest state in the union.  

Suicide rates traditionally increase in correlation to economic down-ticks; however, they usually lag a little.  Records from the Great Depression show 15.3 suicides per 100,000 people in 1929, rising to 17 in 1930 and 18.6 in 1932.  Also the rate is related to unemployment, with a rise of 1.3% increase in suicides for every 1% increase in a state’s unemployment.  In Florida last year suicides were up 6% with unemployment near 10%.  The highest suicide rate ever was reported in 1933 when unemployment was almost at 25%.  

These are not happy figures.  They are something to watch out for.  Please note that the government funds the National Suicide Prevention Lifeline at 1-800-273-TALK.  

Tiger Woods is not in financial ruin, but he is in a bad lie.  His ad former campaign for Accenture is hopeful, though:  “It’s what you do next that counts.”  In golf and life, in divorce and foreclosure—this is an appropriate slogan.  No one should go through foreclosure alone.  

The Payoff

Extortion has become an increasingly popular crime.  High profile cases such as those of David Letterman and John Travolta have come forward on a national scale, but on a smaller celebrity degree, the caseload of such threats has increased to five times what it used to be for a security and investigation firm in New York.  Also increased is the number of debt servicing ambiguities—companies collecting for debts they do not own.  

You may owe the money, but who owns the debt?  Often in small claims court, credit card collections go uncontested; defendants start making payment arrangements before verifying that the company they are paying is really the company whom they owe.  This can be the situation for credit card debt and mortgage debt alike, where we have “show me the note” cases.  If you are unclear on the servicer trying to collect, ask.  Seek legal counsel.  Furthermore, there may be other options available to you besides what the bank or financial institution will offer.  A second look could be worth it.  

Security experts advise against unguarded use of electronic communication as a thwart to blackmail.  That is a lot to give up in this age of personal technology.  Your life does not have to come to a halt in the case of credit card debt or foreclosure, but you may want to have your case reviewed by an attorney.  

Facing South

You cannot shout “Let’s get ready to rumble!” on the radio without getting a bill.  You cannot mimic Toys R Us using a backwards R in a business name.  Cyber squatting on domain names is a no no.  Even news used to be copyrighted as it travelled from the East Coast to the West.  Now we have a clothes debate:  South Butt started as a joke and escalated into a Federal lawsuit about trademark infringement on North Face.  We have yet to see how the anatomy of this case will play out.  

The South Butt offers a direct opposite in name and logo to the well-established, The North Face.  The North Face claims there is customer confusion with brand ambiguity.  This is in South Butt’s favor in establishing a paradoxical stance, in which the original must be recognizable, but communicate satire, ridicule, or amusement.  In other words, North Face has got to be the butt of the joke.  

The South Butt also has the Goliath effect in its favor—the American way, free market where the little man can compete against the big company.  South Butt made about $4000 in profit last year.  (Fortunately South Butt is enjoying free legal representation.)  Thus South Butt has very little to lose in the lawsuit except the recent sales spike prompted by North Face’s threat.  

South Butt was founded to encourage alternatives, to break the status symbol of North Face clothes.  This may be the weak point of the defense, where “alternative” may fade to “knock-off” in courtroom lighting.  South Butt is selling the same type of items to the same group of customers; whereas, in the Louis Vuitton v. Chewy Vuiton case, the former sold high-priced handbags in exclusive boutiques while the later was selling dog toys in pet shops.  Chewy Vuiton prevailed—dogs can distinguish between a tote and a toy and will always maul the more expensive.  However, the similarity of product and consumer target may cause South Butt to lose face.  

Meanwhile, eighteen-year-old owner and founder of The South Butt, Jimmy Winkelmann, continues to pursue his degree in biomedical engineering with a business minor.  He may not be old enough to drink in Old Milwaukee, but we will see who prevails in Federal Court there, and who gets fleeced.  

Minding The Store

This year’s His & Her gift from Neiman Marcus is an ICON A5 Sports Aircraft.  It runs on gas or aviation fuel, is designed to take off and land on water as easily as ground, has an MP3 player dashboard dock, and boasts a streamlined two-seat interior, but do not expect that in leather.  

Neimans, once renowned for its fine furs, is looking to cotton pelts and other fabrics to cinch the waistline of its falling sales.  The stores are generally among the most successful retailers per square foot, but they have stepped into $3 billion in debt while waiting for luxury to be the new black again.  

Prada’s got a hobo bag going for $400 less than its average priced tote.  And the crocodile’s cousin may show up as a woolen handbag.  The trend away from high-dollared items appears in other industries as well.  Jack Daniels is turning to premixed products to offset declining revenues.  And Champagne bottling is down 44% by the world’s top Champagne producer.  You may be ringing in the New Year with a toast of Southern Comfort.  

The ICON A5 Sports Aircraft retails at $250,000, but production will not be completed until late 2011.  Maybe economic times will be better by then.  

Stretching the TARP

Bank of America repaid its $45 billion debt, an action expected to prompt other banks to repay their bailout money, and now the Treasury Department will extend the Troubled Asset Relief Program beyond Christmas and New Year’s Eve, past Easter straight through to Halloween of 2010.  

Just as homeowners face new requirements in the extended version of the first-time home buyer tax credit, TARP will be striped with updates to its coverage.  While TARP is now projected to cost less over a 10 year period, it will be limited to foreclosure prevention and providing capital to small banks and businesses, hoping to shade business and consumer loans from the sun of a harsh economy.  

It may not be a new bank holiday, but the Treasury Department vows to give out goodies into Fall of 2010.  

Last Minute Shopping

Fiscal fitness through the holidays is nearly as difficult as dieting.  ‘Tis the season to go shopping!  Keep in mind, though, that credit cards are plastic band aids on purchases which can result in substantial debt over long-term interest rates.  Your horoscope may not say “avoid credit card debt,” but your credit score will.  

If you are going to use credit cards on holiday purchases, stack the deck in your best interest.  Use lower interest rate cards first before you rely on higher interest rate cards.  This will help reduce cost of debt over time.  

How you handle debt affects your purchasing power for Christmas-yet-to-come, and other days as well.  Everything piles up on your credit report, which can affect your ability to buy a house, a car, a student loan, a lot of things.  You decide if your credit score is going up or down for the holidays.  Last minute shopping can create long-term debt.  As you rush on final impulses, beware of what you pile on your cart and credit card balance.  

Cyber Monday Sales

Online versus in line is appealing to consumers, especially those stuck in a snowstorm.  People can navigate a website rather than a phone tree or icy roads, and for retail sales, the consumer can zoom straight to the product instead of wading through the whole mall.  

The Monday after Thanksgiving has been designated “Cyber Monday.”  Online sales tend to be spread over the holiday season instead of being tied to a particular day, as with Black Friday, but Cyber Monday gets its own name anyway, as well as tracking which showed that sales rose by 5% over last year’s figure.  Consumer spending makes up 70% of America’s gross domestic product, and online sales account for 5-7% of retail sales.  

Optimists have cited heavy use of Google as hopeful for the economy because unlike its competitors, Yahoo and AOL, Google carries more consumer ads.  In other words, what is good for Google is good for revolving credit.  Indeed, the number of online shoppers increased 6% Cyber Monday; however, the amount spent per customer decreased 2%, indicating that shoppers are still cash-strapped.  (Consumers spent $102.19 per person online Cyber Monday.)  Maybe they would have spent more if discounts had not dropped by more than 3% from last year.  Still, Americans spent $887 million on November 30.  Now, if we can only get non-revolving credit moving…and maybe the airports and highways along the east coast.  

Home for the Holidays

Fiscal fitness is a matter of life and debt.  The holidays are a horrible time to contemplate foreclosure on your home, but they are a great time to make resolutions to shape up your finances.  Set goals that will help you achieve the financial picture you would like to present this time next year.  

One size fits all does not apply to home financing.  A mortgage payment that is too big is not flattering.  It takes over the identity of who you truly are.  And cinching in your belt on a balloon mortgage just does not work.  

If the mortgage crisis has hit home, go shopping—find out what programs are available and which one would best suit you.  There are a number of solutions, and a foreclosure defense attorney can help you review the options so you can make an informed decision.  Take control of your life and where you want to be.  

No one should be alone during the holidays, and no one should go through foreclosure alone.  

Are We Alone?

Of the alien planets capable of sustaining real estate, Gilese 581e makes the short list.  It is relatively Earth-like and right next door to planet 581d, which may host liquid water.  Gilese 581e is a comfortable 20 light-year commute from the nearest foreclosure sale on our home planet.  

Foreclosure can seem like a demoralizing situation, but it is not the apocalypse.  It is not the creation of a new heaven and a new earth; it is just business.  

Ninety-five percent of Floridians losing their homes in foreclosure do not have legal representation, most of them because they feel they cannot afford it.  No one should go through foreclosure alone.  Contact the St. Johns County Legal Aid office at (904) 827-9921, or you are welcome to contact my office at (904) 829-6600 to learn more about your financial options in foreclosure legal defense.