Our regular columnist is back for this month’s edition of her column.

Women need a lot of clothes. And shoes. Hair. Make-up. These things cost money, so make sure you budget and buy the right things. Need help? Here are my tips on making the most out of what you have.

Be organized

To make the most of your clothing collection, and your available closet space, you need to keep your threads properly organized. Every change of season, take last season’s clothes and store them somewhere. This goes for outerwear, accessories, casual and workwear.

Edit your wardrobe

I love de-cluttering, and my closet is no exception. Get rid of anything stained, out of date (nothing ever really comes back in again – Harry Rosen said that), ripped, too big or small, and anything you haven’t worn in a year. If a whole year has gone by, and you couldn’t find anywhere to wear that giraffe-print cotton tank, there’s a reason. Be honest. Toss it.

Take an appraising glance

Many stores offer styling advice, which often starts with a current-wardrobe consultation. An office tower I used to work in offered a free personal shopper service, and what I learned from her styling advice was invaluable.

Once you’ve de-cluttered and organized, look at what you have left. Now, what do you really need? At a minimum, every professional woman should have:

• A classic trenchcoat and a very good wool winter coat
• Great boots and leather gloves
• Shoes: grey, black, red, brown – flats and heels. You can add a lot of pop to a wardrobe with just shoes, so splurging here is allowed – yes, buy those purple snakeskin stilettos (if they’re on sale and you’ll wear them).
• Scarves and great jewellery – again, you get a lot of use from statement necklaces and good earrings.
• High-end briefcase, plus a clutch and 1-2 good classic purses
• Two black suits – one plain, one pinstripe. You can wear the pants separately, and of course black is a good staple that works with everything else.
• Two more non-black suits, at least one with a skirt. Chocolate, navy, grey, camel and red – start with neutrals (yes, red can be a neutral)
• Sheath suit dress with matching jacket-good for work and going for a drink
• 1-2 blazers
• Nicely-fitting sweaters and wraps – 2-5
• Camisoles high enough to wear as a blouse
• 2-3 crisp, white tailored shirts
• 5-8 other blouses
• 1-3 skirts and 3-5 trousers

Once you have these basics, you can wear them in all seasons, changing up the blouses under the suit, as well as the shoes and jewellery. When you can afford it, add in more trousers, skirts and suits. Unfortunately, women’s suit are often cut in trendy, up-to-the-minute styles, which are lovely, but only last you a year or two. Go for classic cuts to stock your wardrobe, then layer in unusual pieces.

Make-up and Hair

Get a great cut and visit the salon at least every eight weeks; more if you have short hair or complicated colour or highlights. Nothing looks less polished and professional than roots.

Also spend some money on make-up. Go to a make-up counter and ask for a full make-up application (often there is a minimum purchase fee, but it’s worth it). Practice at home as well. You don’t have to wear make-up, and I suppose there’s something very non-feminist about advising you to do so. But I take a post-feminist view of this and enjoy the perks of being female.

If you can afford a manicure on a weekly or monthly basis, that’s great. If not, invest in manicure tools and do this yourself at home.

Tips

• Now is a great time to be a consumer. Look for and shop sale items only.
• Stock up on gloves, belts, socks, and nylons
• Most chain stores now have websites, and very often have e-mail subscriptions. Sign up to get deals and notifications of sales.
• Don’t buy it if it really doesn’t fit. It will look horrible, you won’t wear it, and it will be a waste of money.
• However, if it almost, almost fits, buy it and take it to a tailor. It’s a small, worthwhile cost.
• Keep the receipts in your wallet. Don’t let the store put it in the bag – they know it will get lost easily and you won’t be able to return it!

It is tax return season again and the question always arises whether you should file your own tax return or hire an accountant to prepare your taxes? There are no absolute answers just contextual ones so think about the following this tax season.

There is always a cost of preparing taxes. Whether this cost is hiring an accountant to prepare your taxes, buying tax preparation software or the plain old traditional way of filing your taxes yourself, preparing your tax return takes time and money. Michael James conducted an experiment of how long it would take to prepare an  on-line tax returns; with the use of QuickTax, it took him 6 hours. Thus, it is inaccurate to say that preparing your own tax returns is done at no cost.

Assuming that one agrees that preparing tax returns costs something, the question then becomes one of opportunity cost?  In other words, is it more efficient for you to file your own tax returns if, in lieu of preparing your taxes, you were engaged in some other more economically efficient activity? For example, a lawyer friend of mine has always hired an accountant to prepare their tax returns. This makes perfect sense in this context. If their tax return costs $200-$400 and their hourly billable rate is $400/hour (plus), assuming we all clock in around 6 hours to prepare our taxes, my friend is weighing the cost of $200-$400 to pay someone to prepare a tax return versus potentially earning $2,400 in legal fees. This is a bit of an extreme example but what can you do with that extra 6 hours otherwise used to prepare your tax return?

The other factor to consider is efficiency and your own skill set. Can you find all the deductions that apply to you or is an accountant’s ability to find hidden deductions equal to or greater than their cost? This factor has been significantly reduced by on-line tax preparation software (and here is a thorough review of online tax preparation software) and, frankly, for most people who earn employment income only, tax preparation software is a very cost-effective manner to file tax returns.

If you typically hire third parties to file tax returns because filing tax returns becomes a question of skill, but you have a limited budget, then consider the following.  I tend not to like the tax preparation businesses that set up in malls and plazas during tax season. They are cheaper alternatives than accountants BUT, if they filed your tax return improperly, who can you complain to? I also worry about the obvious question of the skill level of people preparing your tax returns.

Professionals, although most people do not think of them as such, run their own businesses too. If cost is a barrier to hiring an accountant, some ways to reduce your costs are to speak to your accountant like a business person. For example, my tax returns are relatively cheap for someone making business income and all the paperwork that comes with it. However, I have also referred to my accountant numerous clients; given that accounting clients are “sticky”, this is a recurring source of income for him and, as a result, my tax returns are prepared much cheaper than they should be.

In other words, negotiate fees with your accountant by doing most of the book-keeping work or asking them for a deal if you refer clients to them.

There is no right answer on who should file your tax returns. The above are some factors to consider. As a side-note, for those self-employed, my experience has always been to find a good book-keeper before a good accountant; a good book-keeper can spot cash flow trends as they are unfolding and advise you to make adjustments. A good accountant may see you 1-2 times a year and the damage may have been done. Good luck.

I am on business travel this week so I may not be responding to comments that frequently. Thanks for your understanding.

The dividend signaling theory states that a firm increasing or decreasing a dividend is signaling to the world its future prospects. Since management has better insight into the company’s fortunes than the general public, its dividend policy, over and above other public disclosure, truly indicates where the company is going.

Would it not stand to reason then that, if you are a believer in the dividend signaling theory (which is a hotly contested theory among economists), a dividend decrease is a signal that the company has a pessimistic view of its near term financial future?

Not necessarily. A 2005 study published by Eric Lie in the Journal of Corporate Finance examined 661 dividend decreases and 484 dividend omissions in the period of 1980-1998 (or during two full blown recessions) and found the following major findings:

1. Companies tend to perform better or the same after a dividend decrease or omission- but not worse. This seems logical if you consider that the company has decreased or omitted a dividend for the purpose of freeing up cash to keep the business afloat.
2. Companies that decrease dividends tend to exhibit normal performance after the announcement. Most likely for the same reason discussed above. The study found that a business that omits a dividend typically takes 2 quarters to return to normal business performance.
3. The market reacts negatively in the quarter leading up to the dividend decrease or omission, neutral in the quarter of the announcement and positively to earnings announcements thereafter. This also seems logical since dividends follow earnings and earning decreases are typically accompanied by stock price decreases. The author concludes given how the market reacts positively in the quarters after the dividend cut, the markets tend to over-react when the dividend decrease was announced.

The paper does not address if dividends are increased after a decrease or omission. Most of the research was focused on earnings subsequent to dividend decreases or omissions. However, if dividends follow earnings, there may be (emphasis on “may”) ground to believe that dividends could be restored after a period of time.

The entire paper can be found here (as an interesting aside, the author did attempt to create a methodology to account for survivorship bias and, while admitting it is still a possibility, asserted that the findings were not affected by this).

There’s has been a debate about possible actions if a company cuts its dividends.  Arguments have been made that a dividend investor should sell out of any company that cuts it dividends. I don’t have any hard and fast rules if a company cuts its dividend; you have to take it case by case and industry by industry.

If the entire industry as a whole is slashing dividends, it is troubling because it could be nothing more than a prelude to a race to the bottom. If there are one or two laggards in a dividend paying industry cutting dividends then competitive pressures may force the company to eventually restore the dividend; the best example being TransCanada cutting its dividend in the 90’s due to short-terms business issues and steadily increasing the dividend in order to remain competitive with its dividend paying competitors (mostly notably, Enbridge).

I would like to see Lie update this piece after the dust of this downturn settles. But, if nothing else, Lie’s work seems to suggest that, historically speaking, a dividend cut or omission (a more dramatic move) tends to signal a near bottoming or bottom and a return to normalcy for the business operations.

Suddenly, starting a business has become cool. The Economist calls entrepreneurs the “Global Heroes.” There is a stimulus package aimed at small business and encouraging banks to loan money to small businesses and MBA schools are retooling their curriculum towards producing graduates who start new business rather than joining the investment banking ranks. Lot of praise for a bunch of rag-tag people, like me,  who start businesses because they hate working for the man.

But the reality of the situation is that small businesses are fueled by money and not compliments. Despite multiple attempts by government to encourage small business start up loans, the reality is that it is difficult to obtain small business financing even in the best of times. Thus, small business start-ups have to learn to bootstrap their way to success. Here are 5 tips to growing a start-up business on the dime:

1. Barter to control your expenses:  I got my first website built by bartering. I have 5 years supply of holiday cards since someone bartered those for legal advice many years ago. Book-keeping services? Barter. People make business sound complicated but it is not. There are two sides to a business: revenue and expense. You can control the latter and not the former. So barter to reduce your expenses.
2. Encourage anything to speed up payment. I deliberately gravitate towards businesses with short payment terms. Then, I regularly discount a bill in return for payment within 5 days (no payment, no discount). In other words, I focus on putting cash in the bank and do not worry as much about earnings or large profit margins- these don’t mean much if you get stretched out on payment.
3. Provide services for short-term cash flow (even if you sell goods). This is a classic tech play. While you are developing your killer app in your start-up business, consult on the side to keep money coming in. Consulting has little sunk-costs, you get paid quickly and it keeps food on the table. Does it prolong moving your business to where you want to be? Of course it does but, in business, it always takes longer and costs more than you think so that’s just par for the course. Even if you sell a good, consult on the side- perhaps on how to use that good you are developing (side benefit is that you begin to sell yourself as an expert in your field).
4. Be the fly on the elephant’s back- partner to increase market exposure. Have you ever been in a street garage sale? Did you notice how many more people came to your drive-way? This is the fly on the elephant effect. Find partner(s) in your industry who have larger mailing lists, more contacts, brand recognition and partner with them on something they do not have- a key technology or service or a market that they cannot get at but you can (…think about white shoe corporate America trying to sell to a ethnic communities)- and partner with them. You are exposed to markets you otherwise could not get to and give back something the elephant could not do themselves. The classic fly on the elephant’s back effect is little Microsoft providing an operating system to “Big Blue” IBM in 1981.
5. Be ubiquitous but cheap in marketing to your niche. Favor free PR over paid advertising (media is dying for content daily). Newsletters and seminars are cheap ways to sell your good or service to many people at once.  Have lunch with large groups of connectors. The key is to hit your niche hard and often with cheap marketing tools- people throw out brochures but remember names and faces.

Starting a business can be tough but fulfilling but you have to watch your cash. If you have no intention of being an entrepreneur but want that little extra in your pocket, consider Brip Blap’s tips on finding hidden sources of income (with a very astute observation on why focusing only on spending less rather than earning more can be self-limiting).

The price of a barrel of oil traded above $50 last week, receiving considerable less notice than when the price of oil surged above $100/barrel early in 2008 and its astonishing collapse to approximately $32/ barrel in December.  What is fueling this incremental increase in the price of oil and is it here to stay?

Everyone seems to have an opinion about why the price of oil has begun to rise again. Among the most popular ones are:

1. Inflation: commodity prices tend to rise in anticipation or in reaction to inflation and the consensus is forming that the stimulus packages are solving one issue (the credit crisis) by creating another (inflation caused by the printing of money).
2. Short term Supply is decreasing. As I wrote before, OPEC has indicated that they believe a “right” price for a barrel of oil is $75 and, given their ability to impact supply through production cuts, what OPEC wants, it eventually gets.
3. The Market is correcting itself. Many believe that the fall in the price of oil was due to an over-reaction in the market which is now correcting itself.
4. Global uncertainty. We are sadly beginning to hear about soldier deaths in Afghanistan, coinciding with a NATO offensive being undertaken in that country which will only intensify with the deployment of  17,000 additional troops from the U.S. The price of oil tends to increase during times of conflict given increasing consumption of oil to feed the military machine and the threat that supply may be cut off.

If nothing else the yo-yo effect of the price of oil reinforces that one should not invest based on emotions. Many investors got giddy and bought oil stocks when it peaked and sold when oil bottomed in a panic.

Where will the price of oil go? No one know for certain but consider that the price of oil is mostly independent of government policy since it is a commodity with finite supply.  Additionally, while the much welcomed green movement may help us ween ourselves from fossil fuels, do remember that plastics, used to produce alternative energy sources like wind power, is a chemically modified form of petroleum. Finally, the proposed Suncor Energy acquisition of Petro Canada represents a 25% premium on the 30 day weighted average of Petro Canada share.

These are signs that we may never see super cheap oil again. But whether we will see super expensive oil or some equilibrium between super cheap and super expensive oil is a question no one really knows for certain.

If you want to invest in oil stocks and want to play it safe, think about “integrated” oil and gas companies that pay dividends- these are companies that explore, refine and sell oil and gas to you and I (as opposed to companies that only produce). Think of names like ConocoPhillips, Exxon Mobile and BP.

Congratulations to Geoff who won last week’s draw. Look for more draws coming up in the spring.

Overdraft protection is an often misunderstood banking product. As Ellen Roseman’s recent article on overdraft protection indicated even judges have difficulty understanding the product. First and foremost, overdraft protection is not a line of credit (even though it works in a similar manner).

Instead, overdraft protection is a short-term coverage by the bank when there are insufficient funds to cover cheques, debit purchases and electronic transfers. One of the purposes of overdraft protection is to protect an account holder in the event a bank account has a low balance and there are more withdrawals going out than there is money to cover (with the assumption that a pay cheque or money would be deposit shorter thereafter to bring the balance bank above $0).

Most overdraft protection I have seen are for coverage of  up to $5,000- $10,000 (in other words you can have a balance of – $10,000 in your bank account). However, the overdraft has to be repaid within a short period of time (I have seen as little as 30 days to 89 days to 6 months) or punitive interest will be applied (credit card rates and over).

Fees can vary. Some financial institutions charge a monthly fee which is less than the amount of NSF fees which would be charged if you bounced a cheque. There are now also “pay as you” policies now for ocassional users of overdraft protection.

The key though is not to treat your overdraft protection like a line of credit since the repayment period is relatively short and the interest rates sky-high. As Ellen’s article states once you start treating your overdraft protection like a line of credit, the bank treats you as a delinquent customer.

From a practical perspective, it also make little sense to use overdraft protection as a short-term line of credit given it is an extremely expensive financing source- as strange as this sounds, in some cases, it is cheaper to finance using your credit card than overdraft protection.

In other words, overdraft protection should be used if you typically keep a low bank balance but have frequent withdrawals. If the bank tries to sell you more overdraft protection ask instead for a greater line of credit instead. As always, read the terms and conditions of your overdraft protection since they are amended often and banks, in this day and age, are not very lenient if you are in default.

Last reminder to enter into a draw for a free prize by posting a comment here.

The angry surrounding the approximately $165 million of bonuses that were due to be paid to executives of AIG on March 15 played itself out in Congress this week as the House of Representatives voted to impose punitive taxes on all AIG bonuses. If nothing else, the whole scandal over the AIG bonus has done nothing more than to widen the mental chasm between Wall Street, and their defenders, and main street.

As best as I can explain, here is why normal, working class people are angry or, inversely, why Wall Street and their defenders don’t get it.

Banking, as a friend who works in a bank said to me, is the perfect business model (insurance is often described as insurance without banking). Think about this for a second. I take your money for safe-keeping and I pay you a small fee to keep it BUT I also charge you money to keep it. Then I take YOUR money and lend it someone else and charge considerably more than what I am paying you.  I make sure that when I lend money out, I receive enough collateral in return to recover all, if not most of my loan, if the borrower defaults so your money should be safe even if the loan defaults.

You really have to try hard to mess this business model up and, yet, the bankers messed it up.

On the other side of the ledger, we all drank the cool-aid collectively. We leveraged ourselves to the hilt, bought stupid products that these bankers who were trying so hard to mess up a perfect business model sold to us and never met a tax cut we didn’t like while demanding more services at the same time (see the now nearly bankrupt state of California as Exhibit A).

In what should be the most economically prosperous time in the history of humankind, we collectively mess that up too.

So the “mess up” score is now: Bankers 1, Main street 1 circa September 2008.

On the main street side, do you know what I hear after the mess up score is tied? Yes, we made stupid mistakes but we are adjusting and coping and moving on. We are down-sizing. Shedding staff. Interviewing new investment advisors. Taking more control of our money etc. etc. Is the spike in the savings rate to 5% not indicative of the fact that people are retrenching back to a more responsible lifestyle?

In other words, most people I meet have taken responsibility and have moved on. You have to remember that the world that the media lives in quotes the exception rather than the rule and the exceptions are the people not taking responsibility for their actions. Most people I know have and are adjusting- just that the media doesn’t interview normal people; they find the wailers (there will always be irresponsible people no matter what the economic climate so you can’t speak to someone who is always irresponsible and say they do not take responsibility for the subprime era actions since they never take responsibility at any time).  In addition, most people are keeping a stiff upper lip and begrudgingly allowing their tax dollars to the economy whole again.

On the Wall Street side, do you know what we read? I need a “retention bonus” in a job market that has cratered for financial industry management. Keep bailing us out. We want legal immunity (the banks in ABCP restructuring). We’ll move our automotive plant out of country if you don’t do what we want (discounting years of government subsidies). We will not cut our union wages (even though that is part of the source of the problem). This wasn’t our fault- it was previous management/union heads/bad government decision/the general public/geo-political forces etc. etc.

So now the responsibility score is Bankers 0, Main Street 1 in March 2009.

Thus, when the AIG bonus first came to light, it made me feel like it was doing nothing more than reinforcing the responsibility deficit on the bankers’ part.

I look at it this way. You are employed in a large department for an equally large company with your boss having a lot of managerial discretion (i.e. little regulatory over-sight). You boss losses his/her marbles and starts making terrible decisions. But no one in the department actually calls the boss on it; instead, everyone begins to engage in equally terrible decision making. The department completely blows up and nearly puts the company into bankruptcy.

What happens? Employees are fired or disciplined. Pay freezes and budget cuts ensue to punish the department.  But the boss stays and, not only does the boss stay, he/she decides to give himself/herself a raise and the company forces you to pay for the raise out of the pay cheque of the remaining employees (this part is not realistic but work with me for a second). Would that not entice a revolt in the company?

That to me is the AIG bonus issue in a nut-shell. Feel free to comment/rant as I just did.

Have a great weekend.

If you were to believe the media, Twitter is the greatest thing since slice bread replacing last year’s greatest thing since slice bread, Facebook, which replaced the iPhone etc. etc. The question becomes, if Twitter is so great, would you invest in it if you had an opportunity? Much like my previous post on Facebook, the question is not whether you believe in the utility of Twitter but whether you believe in the business model enough to put your money into it.

The answer, again, is no.

For those who have managed to escape the media onslaught, Twitter is Morse code for the internet. A subscriber sends messages, known as Tweets, of up to 140 characters and anyone subscribing to the subscriber receives their tweets. Thus, Twitter has been described as a micro-blog for its analogous characteristics to the blog but in 140 character jolts.

Why would I take a pass on Twitter?

1. Twitter has no business plan or model. Yes, that’s right. One of the outrageous aspects of Twitter as a business is that it has no business plan.  Venture capitalist firms have invested more than $50 million in a business with no business plan or obvious business model. Imagine you are an institution investing in a venture capital fund and the manager of the fund said “we want to invest your money in a business with no business plan or model and we are in no rush to generate revenue either” (the revenue passage- not profit, revenue- was said by one of the vc funds that invested in Twitter). Now you know why the financial system is broken. The people managing money have lost all common sense.
2. What problem is it exactly solving? This is related to the first point but good substainable businesses solve problems.  For example, Craig’s List lets you buy and sell stuff. What problem is Twitter solving? A narcissistic need to let people know what you are doing all the time is not exactly a need dying to be addressed (unless you are Paris Hilton).
3. It is hard to monetize. Usage is free and there is no advertising. The basic rule of business is that it is easier to move down in price than up. It is going to be hard for Twitter to move from a free to some type of pay per use system. If you want proof on how hard it will be for Twitter to start generating revenue, Facebook has a group called “We will not pay to use Facebook. We are gone if this happens.” There are over 1 million members in this group- and growing. With respect to advertising, it has the same issue as all non business to business social media. People are there to connect socially first and foremost and not to shop.
4. Media gushes. Main street- not so much. I asked two small business owners who use social media and the internet to advertise and generate revenue about Twitter and the comments I got were along the lines of “lots of work for very little return.” One wonders if Twitter is just media hype main street will ignore with the passage of time.
5. Trying to turn a social tool into a business tool as well is tough. Linked In turned a profit within 3 years of launch. But this tool doesn’t pretend to be anything other than what it is- a business tool that is free for limited features and then charges for additional features. It defines its niche well and makes money off of it. Twitter and Facebook have the same issue; its a social/personal tool that big business is trying to turn into a money maker; it is hard to be all things to all people successfully.

I like the utility of the tool. I just would not invest my money, or anyone else’s money, in it.

If there is a moral of my review of Facebook and Twitter, it is this: media hype and buzz does not equate good investments. Companies that concentrate on profits and not market share, solve a common problem, and dominate a niche (to use the Buffet terminology, they have developed an economic moat) tend to be better long term investments. For those in active investing, ignore the hype and pursue the substance.

Anyone care to share their experiences with Twitter?

Just a reminder to enter for the draw by posting a comment on my Nuru Personal Finance card review. Thanks.

If you have less cash than your monthly expenses, what bill would you make a payment on first? Does paying one type of bill have a greater implication on your credit report and credit score than paying another type of bill?

Here are some major factors to consider in prioritizing which bills to pay first.

SOME BILLS HAVE IMMEDIATE IMPACT ON CREDIT REPORTS AND CREDIT SCORES

Not paying your bills on mortgages, credit cards, student loans and other types of bills which usually required a mandatory credit check before obtaining these types of loans/bills tend to have the largest and most immediate impact on your credit report and credit score (a credit report is a history of your past borrowing and dealings with certain creditors; a credit score is a numerical expression up to 900 of your credit worthiness with the higher the number the better).

For this reason, these types of bills should be ideally on some type of pre-authorized electronic/online payment so that they are automatic and, in this sense, receive the highest priority.

For those with upside down mortgages (where the mortgage is now worth more than the home), here is an interest article on the implications of defaulting on your mortgage. The most important issue to know is whether you live in a jurisdiction that allows the lender to pursue the borrower personally after a home is sold as part of a power of sale/foreclosure proceeding since you have the double disadvantage of a default showing up on your credit score and are still liable for the remainder of the loan.

Other creditors which do not usually require mandatory credit checks to open accounts tend to have less adverse and immediate impact if you are delinquent. These include phone and cell phone bills, gym membership, magazine subscriptions etc. Non-payment of these bills may eventually end up on your credit report but it may not be as more immediate  (which is not to suggest you should deliberately pay late or default on payment).

INTEREST AND PENALTIES

This topic has been discussed many times in other blogs but any bill which has high interest rates and penalties (10% or over) should ideally be paid in full or, otherwise, it is difficult to ever begin paying down the principal and you enter into a debt spiral.

For this reason, credit card bills and tax bills should be paid immediately and in full in an ideal world. Non payment of taxes is especially problematic given, in some jurisdictions, it is easy for the government, relative to the typical creditor, to garnish wages from your employer.

SHEER PRACTICALITY

You need a roof over your head, power in your house and a phone (either land or cell). In other words, you need to pay for the necessities of life no matter what. You don’t need a gym membership, a subscription to magazines and newspapers and both a land and cell line.

Having said that, what I did find interesting was that last year I read an article that some homeowners were paying their credit card bills and not their mortgages. If nothing else, an interesting observation about how even our homes have become mere commodities in modern life.

SOME OUTSTANDING BILLS SURVIVE BANKRUPTCY

Depending on where you live, student loans, support payments and outstanding taxes will survive even bankruptcy. Thus, keep in mind that, even in a worse case scenario, you cannot wipe the slate completely clean and some bills payments should be made no matter what. To understand which obligations survive bankruptcy, it is prudent to see a lawyer familiar in this field or a trustee in bankruptcy who will give free consultations for those thinking of bankruptcy.

… and, in the event you cannot pay your bills, I previously posted on dealing with collection agencies. Good luck.