When A City Goes Bankrupt Who Pays for Police Protection?

At the city level, some of the most important services for our citizenry are police, fire, and sewers for instance. Let’s go ahead and talk about the importance of police protection. When cities are forced to cut back, they often cut the number of police officers on duty and the number of cars on patrol. This opens the door of the crime triangle allowing for greater opportunity for criminals to practice their dastardly deeds.

When the City of Detroit found itself in near bankruptcy there were certain parts of the city that the police would not respond to. That meant complete lawlessness and anarchy. People set up their own neighborhood watches, and they armed themselves – it was a literal free-for-all. Of course, by that time the property values had gone to zero, and most people had moved out, walked away from their mortgages, and left the area. It was no longer safe to live there. Eventually the water, sewer, and power had been turned off as well. There was no natural gas, so good luck living through the winter – and if the elements didn’t get you, the criminals might.

Finances for cities are not the only thing that police departments need to worry about. They also have to mind their manners and stay within the law, those rules and regulations which they are bound to by our Constitution. There are also civil rights, and often enough the laws of political correctness, and the case law manipulation by criminal lawyers.

The Wall Street Journal had an interesting article on December 7, 2012 by Bobby White titled “Oakland Seats Police Control,” which noted that the “City of Oakland has agreed to hand over temporary control of its Police Department to court appointed compliance director, under a proposed settlement to a long run civil rights case.” The article also noted that there were 650 employees in the Oakland Police Department and that it was on its way to “federal receivership” without immediate action.

The City of Oakland is, like many of the cities in that area, completely challenged by legacy costs; former city employee pension funds, healthcare costs, and other financial responsibilities for people who have already retired from their employment with the city. So not only is the City of Oakland dealing with the financial issues in an area which is crime-ridden, they’ve also gone out of their way to lay down the letter of the law, and been called on to the carpet for abuse of power.

When a city police department begins to lose control, they have to resort to more aggressive measures, this can also get them into other types of trouble such as was depicted in that article. Now then, what happens when a police department can no longer operate?

What happens if a city goes bankrupt, who takes over then?

What happens when a city cuts their costs to the bare-bones, and there are not enough police to keep control?

It appears that we may find out in many cities throughout this country. In fact, we need to come up with a plan to deal with what comes next. Please consider all this and think on it.

Seven Financial Planning Tips for Single Parents

I appreciate the efforts and hard work single parents provide to raise their young children and do whatever it takes to get them ready for a bright and promising future. I lost my father at the young age and was raised by my mother. As I witnessed with my own mother, most of the single parents strive to accommodate their children to achieve success despite all the challenges and curve balls life throws at them.

Here are seven financial planning tips for all the brave and selfless single parents.

1. Choose a guardian.

It is important to choose the right individual to look after your young children if something happens to you. As part of your estate planning, you should name the guardian of your children and executor for your will. Someone at about your age is preferred since an older person may pre-decease you, an executor should be well organized and have some basic knowledge about personal finance.

2. Save for emergencies.

There are always rainy days. You need to start saving in a systematic way. First build your emergency fund before investing or spending on your favorite holiday gift and other items. As a rule of thumb, your cash fund should be about three to five times of your monthly expenses. If you spend on average $3,000 per month for rent, mortgage, groceries, clothing, utilities and other basic staples, then you should have $9,000 to $15,000 set aside in a money market or savings account in your bank. In case you are fired or laid off, this fund should help you continue your life style until you find a new job.

3. Get health insurance.

With the constant rise in medical costs, anyone without health insurance faces an uphill battle against medical expenses. According to a report published in the American Journal of Medicine, in 2007 medical expenses contribute to more than 62 percent of individual bankruptcy filings (1).

Divorce, the death of a spouse, or losing your job is the primary cause for losing health insurance. Learn more about Affordable Care Act (Obamacare) and shop for insurance plans for benefits and costs at your state’s marketplace or at HealthCare.gov.

4. Get life insurance.

Depending on your finance, life insurance should be among your top priority in financial planning. The minimum coverage and policy you should consider is to see children to finish high school. To determine your life insurance needs you should identify what it should pay when you are gone. It could range from living expenses, paying off a mortgage, college education and anything else you like your child to have in your absence.

A term policy is the least expensive policy you can purchase at a younger age. The rates do escalate as you get older. It is best to lock in a longer term at the youngest age possible.

5. Get disability insurance.

Your income is the main source for achieving your financial goals and living your dreams. A disability policy insures your income. It may surprise you to learn according to Social Security Administration studies show just over 1 in 4 of today’s 20 year-olds will become disabled before reading age 67 (2). Furthermore, According to Council for Disability Awareness ‘s 2012 Long-Term Disability Claims Review 90% of disability is due to sickness; a prolong sickness could cause you lose your income (3).

Disability policies could be short term or long-term. A long-term disability may pay 50% to 70% of your salary up to age 65 or 67. They could have different waiting periods starting at 30 days or longer before the benefits are triggered. Furthermore, they could include a definition of disability referred to as “own occupation” where the policy will pay a monthly benefit until a limiting age if you are unable to perform the duties of your own occupation. There can be more restrictive definitions of disability such as “any occupation”. It is best to discuss this with a disability income professional.

6. Save for retirement

Your employer may offer 401(k) or any other employer sponsored retirement plan. Generally, you can contribute up to $17,500 to a 401(k), 403(b) or the federal government’s Thrift Savings Plan in 2014. If you are 50 or older, your contribution is increased by an additional $5,500 to 401(k) in 2014, or a total of $23,000.

You can open an Individual Retirement Account (IRA) that allows you to save tax deferred for retirement. You can contribute up to $5,500 to an IRA in 2014, which increases to $6,500 if you are age 50 or older. However, if you have a workplace retirement plan, the tax deduction for traditional IRA contributions is phased out for individuals with modified adjusted gross incomes between $60,000 and $70,000 in 2014.

Find any means to save for your retirement.

7. Get Long Term Care Insurance

If you encounter a prolonged illness or disability, you may inflict your children and loved ones with the burden of your daily care. Among a wide array of services, a long-term care (LTC) policy is designed to cover the costs of nursing home care, an assisted living facility or at-home assistance.

The rising cost of a nursing-home and round the clock home care could deplete your hard earned assets and savings in a short period. According to the American Association for Long-Term Care Insurance, the best age to apply for long term care is in your mid-50s (4). Conversely, once you hit 60 or so, you have less chance to qualify for the coverage. The association’s 2010 Sourcebook indicated only 38% of applicants ages between 60 and 69 qualified for good health discount (5).

If you thought long-term care is for the older adults, think again. According to the industry data, 43% of people who claimed for long term benefits are under age of 65. Take advantage of your good health now to lock in an affordable long-term care policy (6).

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1. The American Journal of Medicine. 2009. Medical Bankruptcy in the United States, 2007: Results of a National Study.

2. Social Security Administration. Disability Planner: Social Security Protection If You Become Disabled.

3. Council for Disability Awareness, Long-Term Disability Claims Review. 2012.

4. American Association for Long Term Care. Best Ages To Buy Long Term Care Insurance Described.

5. American Association for Long-Term Care Insurance, LTCi Sourcebook – 2010

6. JHA Disability Fact Book, 2008