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Credit

Credit is an agreement between a borrower and a lender which allows the borrower access to money without having to pay it back immediately.

Regina M. Campbell | Oct 8, 2019

6 Tips To Help Your Company Avoid Fair Labor Standards Act (FLSA) Violation

Understand FLSA Exemptions The FLSA details precisely which types of employees the legislation applies to, and which types of employees are exempt from aspects of the law’s requirements such as overtime pay. There are two main tests that determine whether an employee is exempt or non-exempt: the salary test and the duties test. Some of the exemptions under the duties test include executives, outside salespeople, highly compensated employees, and administrative employees. Employees are exempt under the salary test if they earn at least $455 per week. Misclassifying employees as exempt when they should be non-exempt is one of the biggest causes of FLSA violations, so be sure you fully understand how the exemptions work. Self Audit Consistently perform self audits of your company’s FLSA compliance. Allow a knowledgeable business attorney to analyze your company’s policies and identify potential FLSA risk factors you should address. If you perform audits yourself, you will prepared if you are ever audited by the Department of Labor, and be better equipped to handle any lawsuits that arise. Beware of digital complications In the Digital Age, numerous workers are constantly connected to their workplace through their phones and other portable electronics. If you have non-exempt employees who are checking and responding to emails in a manner which benefits your company—even if you did not ask them to—the time spent responding to emails could be compensable and count towards overtime. Be aware of your obligations with regard to digitally connected employees. Require employees to take lunch away from workplace You are required to pay for the hours that an employee works. If you allow for an unpaid lunch break, and the employee remains at their workplace, they may feel obligated to work during their lunch break. You will be required to compensate them for that time. If you want employee lunch breaks to remain unpaid, require them to take their lunch breaks away from their work space. Educate managers on FLSA-related policies Your managers are the ones who exercise the most control over keeping employees in compliance with company policies that are meant to protect you from FLSA violations. Ensure that your managers are properly trained and aware of your rules and regulations when it comes to FLSA-related policies so that they can adequately enforce them. Develop well-defined complaint policies and procedures If you develop clear and effective employee complaint policies, you can give employees an outlet to remedy potential issues before the problem escalates into a lawsuit. For example, if an employee believes they were not paid the overtime they deserved, they could follow your guidelines for issuing a complaint, giving you the opportunity to address and rectify the issue rather than forcing the employee to seek legal remedies.

Michael Kind | Oct 4, 2019

How to properly dispute items on your credit report

Get a free copy of your credit reports AnnualCreditReport.com is a website maintained by the three biggest credit reporting agencies, Equifax, Experian, and TransUnion. The site was created in order to comply with their obligations under the Fair and Accurate Credit Transactions Act (FACTA) to provide a way for people to receive their free credit reports once per year. You can download your credit reports directly from that website or you can call 1-877-322-8228. Write your dispute Make sure your letter clearly tells the credit reporting agencies what you are disputing. Identify the account you are disputing and why you believe what is being reporting is inaccurate or misleading. Include proof for your dispute If you have evidence to show that your credit report is inaccurate or misleading, include copies of the documents. For example, if you are disputing an account that was opened by an identity thief, include a police report or other paperwork to show that you were the victim of identity theft. As another example, if you are disputing a "late" notation, even though you made the payment on time, include the receipt showing that you paid on time. Finally, it is a good idea to include proof of your identity. You may want to send a copy of your identification or some other proof of your identity--especially is you're the victim of identity theft. Send your dispute to the credit reporting agency You should send your dispute to Equifax, Experian, and TransUnion directly. Under the Fair Credit Reporting Act, you do not have a private right of action against the furnishers of information (the companies that provide your credit information to Equifax, Experian, and TransUnion), unless your dispute is sent directly to the applicable credit reporting agency. See 15 USC 1681i. It is preferred that you send the letter certified mail and get a tracking number. This way, you have proof that the letter was received. Wait 30 days Credit reporting agencies are required by federal law to send you a response within 30 days. Under certain conditions, they may notify you that some additional time is required to prepare the response. Once you receive the response letter (called the "reinvestigation results"), review the paperwork carefully to make sure the errors you disputed have been corrected.

Daniela P. Romero | Sep 25, 2019

The Secrets Debt Negotiation Companies Don't Want You To Know

Promises Not Kept Debt settlement companies promise to save you money on debt repayment, but they often tack on hidden fees that add up quickly. In fact, you may end up in greater debt than when you started! Lump Sums Settled debts often need to be repaid in a lump sum. If you are unable to come up with the entire payment, you may not be able to settle the debt. No Guarantees Some creditors will not even work with a settlement or negotiation company. Hidden Fees Often the money you pay upfront for your debt repayment, goes straight towards the debt settlement company through fees. Instead of making progress towards reducing your debt, you may find yourself in more debt or in the same spot you started Credit Affected The negotiation company may ask you to stop making payments, which could result in a delinquent account. Remember, delinquent accounts show on your credit report, resulting in your score being lowered. You could also be sent to collections or be sued for the delinquent debt. Debt Keeps Growing The interest & penalties on your debt will not stop accumulating during negotiations. You will likely end up paying more if debt is settled through fees. Many charge a fee based on the percentage of each settled debt (calculated on the debt’s balance when you first enroll with their company). Some even charge a fee based on the eliminated debt. This is one reason why it is important to read the fine print before agreeing to work with a debt settlement company. Other fees can include monthly payments and set up fees. Additional Taxes If a debt settlement is successful, the portion of the forgiven debt can be considered taxable income by the IRS. So, you may need to pay taxes on the forgiven debt. No Protections When using a debt negotiation company, you run the risk of receiving a lawsuit, judgment, wage garnishment, and/or bank levy.

Michael F. Terry | Sep 10, 2019

Top Ten Bankruptcy Myths

Congress has eliminated bankruptcy for the "little guy." Despite what you may have heard in the press, bankruptcy is still alive and well and available to the little guy. Yes, in October 2005, new bankruptcy reform laws went into effect that may make it more difficult for some individuals to qualify for Chapter 7 relief. However, consumers in serious financial trouble should still be able to qualify for protection under the Bankruptcy Code. The sky has not fallen on bankruptcy! Bankruptcy will ruin my credit record This is absolutely false. What ruins your credit record is your inability to pay your debts on time. After your bankruptcy case, many of your debts will be discharged, and you will be given a fresh start. If you can keep on top of any new debts you incur after you emerge from bankruptcy, your credit record should actually improve. Filing bankruptcy makes me a bad person Absolutely not! Congress passed the bankruptcy laws to help individuals and businesses with severe financial problems get a fresh financial start and become productive members of society again. Do you think it makes you a better person to avoid your creditors, ignore your bills, and drive yourself further into a debt hole that you'll never get out of, or to take on new credit responsibly, and pay your bills on time? Millions of businesses and individuals file for bankruptcy each year and become productive members of society-you can too. I won't be able to get credit after my bankruptcy Think about it. If you owned a credit card company, who would you rather give a credit card to: someone who has a massive debt load and is behind on all their bills, or someone whose bills have been wiped out? Probably the latter, right? That's why you should be able to get credit after bankruptcy. Since many of your debts will be wiped out after bankruptcy, and, in the case of a Chapter 7, you won't be able to file another one for another eight years, many creditors will see you as a good credit risk after your bankruptcy. I can't afford to hire an attorney for my bankruptcy We offer payment plans: you can make a down payment and pay the balance in installments. A debt counseling service can help me eliminate my debts without the stigma of bankruptcy on my r This myth is a very dangerous one. Debt counselors cannot get rid of your debts, nor can they stop your creditors from harassing you. All debt counselors do is help you negotiate new terms on your existing debt with your creditors-your creditors do not have to agree to any restructuring, and they can still come after you for any unpaid balances. By contrast, the moment you file your bankruptcy case, many of your creditors are prohibited by law from taking any legal actions against you, and once your bankruptcy is complete, many of your debts are gone forever. Furthermore, credit counselors do not necessarily have your best interests in mind-they are often owned by the very creditors that are making your life miserable to begin with. Don't let their non-profit claims fool you-when you use a debt counselor, someone is making a lot of profit off you, and in most cases you’ll still be hopelessly in debt. Bankruptcy cannot get rid of debts like student loans and taxes This myth ignores the fact that in some instances you can include student loans and taxes in a Chapter 13 repayment plan and pay them off over time. In many cases, this will save you money. Also, in rare instances, these debts may be dischargeable. You will need to talk to an experienced bankruptcy attorney if you have these types of debts. I can handle my bankruptcy myself Although you are permitted to handle your own bankruptcy if you wish, do you really want to? Bankruptcy involves a complex interplay of state and federal laws, and there are many traps for the unwary. Your bankruptcy will be one of the most important events of your financial life; if it is not done properly, it could have dramatic consequences for the rest of your life. You wouldn't perform your own surgery, why would you perform your own bankruptcy? I won't be able to buy a house or a car, or rent an apartment, after bankruptcy Again, not true. As we note above in myth number 4, you should be able to get credit after bankruptcy. Although it may take you a little time to start purchasing things, you should be a good credit risk once you emerge from bankruptcy, and you shouldn't have too much trouble making these types of purchases. You can also get help in making these types of purchases, such as getting someone to be a co-signer for you. I don't want to go through a difficult and time consuming court case Forget about jury trials, cross examination, and all of the other courtroom drama you see on TV. In most bankruptcy cases, you'll never appear before a judge, and in most Chapter 7 cases, your case will be complete and your debts discharged in about four months. BONUS TIP: Any lawyer can handle a bankruptcy Although any licensed lawyer can represent you in a bankruptcy case, would you hire a criminal lawyer for a real estate closing, or a patent attorney for a divorce? Don't you want to have the comfort of knowing that your case is being handled by an experienced professional? You'll likely only file for bankruptcy once in your life, so you should hire an experienced bankruptcy lawyer for this very important job.

Marc Jacobson | Aug 1, 2019

How to Monetize the New York State Film Tax Credit Program for Production

New York State Film Tax Credit Program for Production Overview New York’s rebate program is different from a tax credit, which is made available in many other states. In New York, the value of the rebate is actually paid to the company entitled to receive it sometime after compliance with all the state mandated requirements. In many other states, the value of the tax credit is offered to the production company, which may use the credit on its tax return. Often that company cannot use the credit, because the company does not owe taxes of any amount, let alone the amount of the credit available after spending money in the state and compliance with all the requirements of that state’s program. Tax credits are often sold by the company entitled to receive the credit to a company that can use the credit, at a discount. This article only discusses how to monetize the New York State Film Tax Credit, which is really a rebate. New York Provides 30-40% Rebate on Qualifying “Below the Line” Expenses In its most basic terms, the New York State program provides that film productions, which meet certain minimum qualifications for both content and expenditures within the state, and certain administrative requirements such as meeting filing deadlines, may receive 30% of enumerated qualifying “below the line” expenses incurred within the state as a rebate. “Above the line” and “below the line” are industry terms for line items in a film’s production budget. Generally, “above the line” expenses are the costs for the principal cast, the director, the producers, the writers, certain travel expenses, and other items. After these expenses are listed in the budget, a line is drawn across the page, and the “below the line” expenses are the other expenses in the budget. For productions north and west of Westchester and Rockland counties, an additional 10% rebate is available for specified “below the line” labor costs. Assuming a film does all of its pre-production, production, and post-production in New York state, and is eligible for a 30% rebate, and the “below the line” costs are about two thirds of the total cost of the film, as a rule of thumb, the film will typically receive about 18-20% of the total cost of the film back from New York State.But the state doesn’t just write you a check before you start shooting. Instead, the production has to go through a process whereby the amount of the anticipated rebate, based on the budget submitted to and approved by the state, is certified. Then you know how much is expected to come back. After completion of the work in the state, additional forms are filed, and pursuant to a schedule, the state makes payment to the producers sometime after completion of the film. The Problem of Pass-Through Business Entities Most film production companies are organized as a limited liability company (“LLC”) so they may be treated as a partnership for income tax purposes. That means that the LLC itself pays no income taxes. All of its income is passed through to the owners of the LLC, usually in accordance with the pro rata share of their investment in the film. The LLC would not retain any of the funds earned from a sale or license of the film, and would show no income, and therefore the LLC would pay no tax. Even if it did retain the cash and did not actually pay it out to the investors, the investors would be “deemed” to have received the cash, and then they would pay tax on that income. It is this “pass through” status that raises an issue for NY State. New York has a Right To Set Off Rebates Against Tax Due As a rebate state, New York actually pays the producer, instead of providing a credit to be claimed on an income tax return. However, New York will set off against a rebate due any outstanding taxes due to the state from any owner of an LLC. Let’s assume a rebate is due to the LLC of $500,000. Upon receipt, ordinarily, that income would be passed through to the individual investors. If just one of the individual investors owes taxes to New York State, of say, $600,000, then 100% of the benefit which would otherwise be payable to the LLC by New York State will be retained by the State to satisfy that individual member’s state tax liability. If the individual’s liability is $200,000 then the rebate will be reduced by that amount. That’s not good for the other investors, because then they won’t get the full benefit of the rebate. More importantly, in our discussion, it makes it impossible for a bank to lend money, because if the bank takes the rebate as collateral, but the rebate is kept by the state to set off and satisfy an investor’s tax liability, the collateral is worthless to the bank. The Conundrum If the film doesn’t earn a profit (which is very common) each investor wants to take any tax losses, to which they may be entitled, on their personal tax returns. As a result, the entity into which the investors invest must be a pass through, so the losses may be passed through and applied to the other income of the investor. But in order to borrow money, the entity which produces the film, and which would receive the tax rebate cannot be a pass-through entity, which might potentially render the collateral worthless. The Solution In what has become a structure which is now mandatory for lending banks, the rebate needs to be paid to an entity which is not a pass-through entity, specifically a “Subchapter C” corporation. The Subchapter C corporation when formed becomes a wholly owned subsidiary of the LLC into which the investment was made. The Subchapter C corporation then is hired and paid by the LLC to produce the film. It signs the contracts for the production so that all the qualifying expenses are incurred by the Corporation. The Corporation is the entity which applies for the rebate with the State of New York and is also the borrower of any money which pledges the rebate as collateral to the bank. How the Solution works for the Bank When the bank takes the rebate due to the Subchapter C corporation as collateral for the loan, there is no chance that any unpaid taxes due from an investor to New York State will be used to offset the rebate to be paid by the state, because the Subchapter C corporation is entirely owned by the LLC and is not a pass through entity. The Subchapter C corporation is created solely for the purpose of producing and delivering the film to the LLC, which in turn will deliver the film to the distributor. The rebate will be paid to the Subchapter C corporation, which will be contractually bound to deliver the amount of the rebate as directed by the LLC—to the bank, which lends against the amount due if there is a loan, or to the investors, to recoup their investment if there is no loan. But in no event can unpaid taxes due to New York State be assessed against the rebate payable to the Subchapter C corporation to reduce the amount due. What the Solution means for the Borrower/Producer Of course, a bank will discount the amount the producer will receive as a rebate. So, if the amount due back from the rebate is calculated at $500,000, then the bank will discount that by about 20% and offer a loan for about 80% of $500,000 or $400,000. So, while $500,000 will be paid by the State of New York, the bank will lend about $400,000. Interest must also be paid on the loan. New York takes years to pay its rebates. So, the amount received during production through a loan will be lower than the amount actually paid by the state when the rebate is due. But about 80% of the value of the rebate may be made available by the bank to the production to defray production costs, reducing the amount of investment needed to finish the film. Production Services Agreement The terms of the production agreement between the LLC and the C corporation need to be carefully outlined. The bank will want to know that the film will be delivered, which typically mandates the issuance of a completion bond, and if using the rebate as collateral to a loan, then proof of such rebate and documentation when the rebate will be due. Many other factors need to be considered in creating the financing package in this scenario. It is possible then, to turn most of the New York State Film Tax Credit/Rebate into cash for the production of your film, but it will take careful planning, analysis, and extensive documentation.