Perils of Unprotected Business Credit Cards

With all the publicity of the new protections afforded consumers with the passing of the Credit CARD Act of 2009, business owners can be surprised to learn that the business credit card in their wallet is not covered by the CARD Act. Business credit cards do not fall under the protections of the Truth in Lending Act and the Credit CARD Act of 2009. This means that card issuers can raise rates at will (even on existing balances), bill on any date each month, and squeeze the time frame between the receipt and payment date–all practices that have been banned on consumer cards.

Business cards, however, can offer benefits that are attractive to business owners, such as more flexible payment options, business reward programs, and the ability to detail and break out spending records for accounting purposes. To be fair, some business card issuers voluntarily incorporate many consumer protections into their fine print policies.

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What Happens to Credit Card Debt After Death?

You can’t take it with you, but do credit card bills follow you into the grave?
Does the debt die with you? Or, can it come back and haunt those you leave behind?

General Rule:
The general rule is that any debt of a deceased person, including credit cards and medical bills, are solely the responsibility of the decedent or the decedent’s estate. The general rule assumes that no other person was the signer or joint obligator on any particular account or debt of the deceased person. If an account is the deceased person’s alone, the debt is the deceased person’s alone.

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When Employers Can Be Liable for an Employee’s Debt

Creditors use employer garnishment errors to collect entire debt from employers

Employee wage garnishments appear to be informal and somewhat routine proceedings from the perspective of the employer. Employers are routinely sent writs of garnishment on printed forms, and employers can simply respond to writs of garnishment without using an attorney. Employers, however, face a huge risk relative to its employees’ garnishment proceedings because in the State of Michigan, employers can be held liable for the entire debt of the employee that is subject of the garnishment, including court costs and attorney’s fees, if the employer fails to comply with certain requirements. Some creditors are paying attention to the small details that the employer may overlook, because the creditor wants to be repaid and rather than wait around to be paid from the debtor, creditors are using employer garnishment errors to collect the entire debt from the employer. Employers are commonly not represented by counsel in this process and creditors are represented by counsel, providing the creditor a significant advantage.

Failure by employers to respond within 14 days could cause courts to take action against the employer

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Gifting to Avoid Estate and Gift Taxes

Going, Going, Gone!
U.S. taxpayers are experiencing a “perfect storm” of opportunity to make tax-free transfers (gifts) of assets such as family businesses, real estate and other wealth from one generation to the next. The gift tax was first enacted in 1932 by the federal government. Over the coming months, we all have what may be the best opportunity since 1932 to gift family assets without a gift tax now and to avoid significant estate taxes later.

Two notable exceptions to the gift tax
Some people are not aware that giving away assets to their children or other individuals may create a taxable event. The “gift tax” referenced above applies to anything of value transferred by one individual to another. There are two notable exceptions to the gift tax. One is an “annual exclusion” which is an exception that allows individuals to gift up to $13,000.00 per year per person without any gift tax consequences.
A second exception is an overall gift tax exemption which historically has been limited to $1M during an individual’s lifetime.

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Employer Social Media Policies and Employee Rights

Judge Rules on Employee and Facebook Post

Judge Rules on Employee Firing and Facebook PostWe have previously provided information regarding social media and how employee postings on various websites may or may not affect the employment status of employees. The Acting General Counsel for the National Labor Relations Board (“NLRB”) recently released a report on August 18, 2011, summarizing the results of 14 employment related cases that center on employees’ use of social media relative to their employment and their employer’s social media policies for employees. The report provides insight into what the NRLB regards as protected speech and also the enforceability of certain social media policies that employers implement. Remember that the NLRB and the National Labor Relations Act apply to most employers, union and non-union alike.

Protected, Concerted Activity

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