Managing Stress During the Holiday Season

While the holidays bring plenty of cheer and laughter, they also tend to bring a great deal of stress. Planning face-time with family, coordinating activities, and managing the financial aspect of the holiday season can often become overwhelming. The following suggestions from the Mayo Clinic aim to reduce holiday-related pressure and anxiety:

Stick to a budget. It might be helpful to decide in advance how much you are going to spend. The trick is to then stick to it. Remember that gifts and presents do not equate to happiness. Do not extend beyond your means. If you have a large family or are traveling, consider other gift-giving arrangements. Some alternatives include donating to a charity in someone’s name or exchanging homemade gifts.

Plan ahead to avoid becoming overwhelmed. Trying to visit all of the family in a single day can be exhausting. Spreading family visits over the course of several days will allow you to make the most of the time you do spend with relatives. If certain relatives drive you crazy, consider activities that minimize the amount of time you spend together, like a cup of coffee or a quick lunch. Establishing some organizational tools can also help minimize unnecessary stress. For example, generating lists can help keep you focused while shopping or planning meals and activities.

Be flexible and realistic. Striving for utter perfection can often lead to disappointment when things do not pan out as hoped. The ability to make adjustments along the way is essential. Do not be afraid to adopt new traditions that better suit your family’s needs. Remember that traditions can grow and change as your family does and not every year has to be exactly like the one before.

Maintain healthy habits. The holidays are full of temptation. Remember to keep everything in moderation. Overindulgence can often lead to feelings of guilt. Try to strike a balance between some indulgence and maintaining your regular habits and routines. Exercise regularly and make sure you get enough sleep. Engaging the family in physical activities together can help make those healthy routines seem a little more fun.

Be aware of your feelings. Holidays may not necessarily be happy and joyous, particularly for those who have lost a loved one. Take the time to acknowledge and work through your emotions. If you are feeling isolated, reach out by volunteering or get involved in community events. When dealing with pushy family members, do not be afraid to say no. At the same time, do not be afraid to ask for help when you are feeling swamped. Openness and honesty can prevent harboring frustration, anger, and resentment. Take some time for yourself and relax as well.

For divorced families, the holidays can often be particularly challenging. The American Psychological Association offers several key pieces of advice for the holiday season, beginning with the importance of setting aside differences and laying down the sword. Put the needs of your children first. Encourage your children to spend time with your former spouse and reassure them that you will be fine when they do. Do not put unnecessary pressure on your children. When visits are not possible, technology like Skype can help facilitate contact between family members during the holiday season.

Sources:

“Stress, depression and the holidays: Tips for coping,” Mayo Clinic, available at http://www.mayoclinic.com/health/stress/MH00030

Dr. Elaine Ducharme, “10 Tips for Managing Family Stress at Holidays,” American Psychological Association, available at http://www.yourmindyourbody.org/family-stress-during-the-holidays/

Contributed by: Kelly Thompson, Law Clerk

Digging Deeper Into Debt With Payday Loans

Regularly advertised as an easy source of money, payday loans appeal to people with an urgent need. Bankruptcy and payday loans tend to go hand-in-hand because once you fall behind it can be virtually impossible to catch up.

The payday loan industry claims that these loans are meant to be a small, short term advance used to help a borrower meet their financial needs until their next pay day. The lender holds a check anywhere from a week to a month and in return, the borrower gets cash immediately. These loans unfortunately have extraordinarily high interest rates that more often than not leave a borrower worse off than before. At the time, borrowing this money seems like an appropriate option in an urgent situation, but what the borrower may not realize is that they are only digging themselves deeper into debt.

Lenders say that these loans are used only in emergency situations and over a short term period -- however this is absolutely wrong. A Wall Street analyst conducted a study and found that "the average customer makes 11 transactions a year, which shows that once people take [out a payday loan], they put themselves behind for quite some time(1)." Borrowing from paycheck to paycheck will only result in eventually defaulting on repayment.

In one situation a woman named Andrea Felts took out a loan to help cover expenses after her divorce. She took out a $400 loan and was charged $120 in interest for the 16 day loan period. When she wasn't able to pay the $520 she borrowed, she rolled over the loan for an additional $120 in fees. By the end she rolled her loan over a total of 5 times which resulted in $600 in fees on a $400 payday loan(2).

Once you are already struggling to make ends meet, taking out a payday loan can escalate an already dire situation very quickly and it's all too common for a borrower to eventually file for bankruptcy. For the most part, payday loans are considered unsecured debt and are treated as so during bankruptcy proceedings. Filing for Chapter 7 will allow a debtor to discharge their debt without repayment and essentially all unsecured debt is dischargeable. Under Chapter 13, the payday loan is treated equally along with all other unsecured debt in the debtor’s plan. .

If the loan was received within 60 to 90 days before filing, the loan may not be dischargeable in bankruptcy. The creditor will have the presumption they were taken out with no intention of being paid back. Also, if the electronic authorization or check written to the payday loan company “bounces” or is returned by the bank as insufficient funds, the payday loan company may refer the incident to the County prosecutor for bad check charges. If you are charged with writing a bad check, this is a criminal charge that is not dischargeable in bankruptcy.

If you find yourself submerged with debt and your payday loans are only aggravating the situation, contact one of our knowledgeable bankruptcy attorneys for more detailed information.

Footnotes:

(1) M. Anderson, "Cash poor, choice rich, Paycheck-advance firms move in," Sacramento Business Journal (Jan. 11, 1999).

(2) "Payday Lenders: small loans, hefty fees, big problem." Consumer Reports Magazine. 02 2009: n. page. Web. 28 Jun. 2012. <http://www.docstoc.com/docs/23437676/Consumer-Reports-Magazine-February-2009-Payday-lenders-small>.

How To Deal With Joint Tax Liability In Your Divorce

Divorce may legally dissolve a union but it does not dissolve the tax liability the former couple shared. The adage, “[i]n this world there is nothing that is certain except death and taxes,” absolutely holds true in this instance. By taking an active role in the way your divorce decree is written and by familiarizing yourself with the terms in it, you will better understand your tax implications. 

If on the last day of the tax year you were legally married, you are able to file jointly. Most people choose this option if it’s available to them because it typically results in the lowest tax burden. However, be aware that filing jointly means that you are both fully liable for the contents of the tax filing. The option of the “married filing separately” status is also available. Prior to filing, both parties have to determine how these filing statuses will affect their tax liabilities and benefits. 

If you were legally divorced by the end of the tax year, you may be able to file as a single individual or as a head of household. Filing as a head of household can be more beneficial tax-wise, but you must meet certain conditions. In order to qualify, you must have paid at least half of the cost of maintaining a home and must have lived in the home with a qualifying dependent for over half the year. 

These are simply two possibilities. Unfortunately, situations during the divorce don’t always have the most pleasant outcome, and you may be stuck footing the bill. Even if you, as a former spouse, did not generate any of the income or deductions on the return, you could be held responsible to pay all of the taxes simply because you signed the return. 

The IRS can provide some solace in the form of the innocent spouse relief. By evoking this, you can be relieved of responsibility for paying the tax debts if your former spouse omitted or improperly reported items on your tax return. However, if you are jointly and individually responsible for the tax debt, that does not qualify for relief.  This might be a result of a joint return you both signed and filed while married. The IRS is able to collect that debt from either you or your former spouse. Contact your attorney at Heartland Law or a tax professional for more information on your options. Call (816) 842-6700 or Email us by clicking on the link.