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Archive for February 9th, 2011

Bankrupt millionaire

Posted by Administrator on February 9, 2011

Mr S.K.Macharia's case is not unique. In today’s economy, many people are forced to consider debt as a solution to their financial difficulties. Photo/FILE

Mr S.K.Macharia's case is not unique. In today’s economy, many people are forced to consider debt as a solution to their financial difficulties. Photo/FILE

When the court recently ordered that Samuel Kamau Macharia’s vast estate to be placed under receivership and appointed a government official as trustee of his assets and liabilities, the whole country was stunned. 

The orders by Lady Justice Martha Koome followed a successful bankruptcy petition filed by Mr Livingstone Waithaka, managing director of Ocean Freight Transporters Company Limited.

Mr Macharia, the owner of Royal Media Services – which owns Citizen TV and radio and a number of vernacular radio stations – was sued with his wife Purity Gathoni Githae for failure to pay Mr Waithaka Sh500,000 arising from a judgement by Lady Justice Kalpana Rawal in 2001.

According to commercial court judge, Martha Koome, the debtors failed to settle the amount despite bankruptcy notices having been issued to them.

Judgement

“They were served with bankruptcy notices and persisted in their refusal to settle the claim,” explained the judge. The court said the matter only required payment of the petitioner’s deposit of Sh500,000, when it was demanded after the debtors failed to proceed with the sale of the plot as initially agreed.

The money attracted a compounded interest at the rate of 19 per cent per month and was backdated to December 1986. At the time of filing the bankruptcy proceedings two years ago, the debt had reached Sh34.9 million. The two have since moved to prevent the bankruptcy order by filing an application seeking to set aside the court ruling.

But Mr Macharia’s case is not unique. In today’s economy, many people are forced to consider debt as a solution to their financial difficulties. The majority of people live in fear of losing everything they worked so hard to acquire, and the reality of their fears coming true is a distinct possibility.

Getting into debt is easy, especially with so many lenders offering money via loans and credit cards. It is all easy to run up huge bills when you are charged high interest rates on your unpaid debt and before you know it, creditors are pounding on your door, while the thought of opening your mail becomes too scary.

Living beyond your means

Financial woes are common among many families. It is easy to understand why debt can mount up to the point of bankruptcy.

Bankruptcy sends chills up the spine. If you are facing the prospect of being declared bankrupt or are in the middle of it now, you know it’s a living nightmare. It can cost you your job, wreck your marriage and steal your peace of mind.

Financial experts say debt is on the rise because many people are spending far more than they earn. This, according to Clement Maina, a personal financial planner, means the whole society is in debt.

“People are borrowing money they don’t have; they are buying things they don’t need. This kind excessiveness often leads to bankruptcy,” he says, and credit cards have worsened the situation.

“With the introduction of the credit card, most people prefer paying their small bills with them. But what most do not understand, is that they end up paying more than they would have otherwise paid in cash. This has been one of the major causes of bankruptcy in the modern world.”

The interests charged on credit cards continue accumulating as more items are bought. And as it accumulates, it reaches a point where one is caught up in paying the interest accumulated.

Insolvency is also caused by the small loans people acquire to buy items. As they do this, says Mr Maina, the interest charged on the card keeps escalating. “This way, the buyer ends up paying for what he bought years back as opposed to saving for the future.”

But what does the law say about bankruptcy? And what is the cost of being declared bankrupt? Mr Sekou Owino, a legal adviser with Nation Media Group, says bankruptcy is not just about being poor or broke but owing more than one can pay.

“Under the Law of Kenya, bankruptcy is the declaration made against a person by a court after it is found that the person is unable to pay his or her debts as and when they fall due. In other words, it is a situation of individual insolvency,” he says.

“A millionaire can still be bankrupt if he owes billions. Bankruptcy applies to everyone, not only public officers. After the individual’s properties are sold and distributed among creditors, the individual cannot be pursued by the creditors even if they have not been paid in full. However, the individual will remain bankrupt until discharged by a court often after about 7 years,” says Mr Owino.

A person is declared bankrupt after a court has examined his or her financial affairs either upon the application of a creditor or by the person himself and found that the person’s assets are far outstripped by his debts at any given time.

A declaration of bankruptcy under the Laws of Kenya, he adds, means a person ceases to hold offices such as directorship of a company and several other public offices.

“It also means the bankrupt person is deprived of the power to handle his or her financial affairs and these are then given to The Official Receiver, who is charged with collecting the persons assets and distributing it among the creditors. Therefore, the bankrupt cannot hold a bank account in his name, is not supposed to incur any more debt (borrow money) and may not even vote while the bankruptcy order stands.”

Be organised financially

Contrary to popular misconception, however, going bankrupt does not mean that you do not have to pay your debts. It simply allows the court to intervene and create a schedule for re-payment. Furthermore, it opens you up to all sorts of penalties and heavy financial costs.

According to Mr Kevin Odongo, a financial expert and investment adviser in Nairobi, the best way one can avoid bankruptcy is to first take control of so-called small debts.

“Try to be organised. Take everything you owe and sort it out; consider subcategories such as revolving debt, credit card debt, good debt and so forth. The best way to do this is to enter everything into spreadsheet format. Enter who you owe, the amount, the interest rate, the minimum payment, and their contact information. Having this easily available, gives you a better perspective of the situation,” he says.

Your next step, advises Mr Odongo, should be to contact your creditors and let them know you want to avoid bankruptcy and see if they can help.

“Ask if they can reduce your interest rate or even decrease your total balance; keep in mind that if some of your balance is forgiven, it will likely appear on your credit report as failure to pay. If you let them know you want to avoid bankruptcy and wish work to pay down your debt they will be more inclined to work with you”.

Finally, he suggests, try to organise your remaining bills by interest rate; from the highest to lowest. Pay off those bills that carry the highest interest rates first and pay only the minimums to the rest.

Source: http://www.nation.co.ke/Features/money/-/435440/1104522/-/116ge3dz/-/index.html

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Motorcyclist in fatal accident ID’d as Maurice Kamande

Posted by Administrator on February 9, 2011

Maurice Kamande,26, who passed away after a motor bike accident in Huntington Beach California

Maurice Kamande,26, who passed away after a motor bike accident in Huntington Beach California

BUENA PARK — A Huntington Beach man who died Saturday afternoon after crashing his motorcycle into a parked pickup truck in Buena Park has been identified as 26 year-old Maurice Kamande.

Kamande was traveling westbound in the 8500 block of Bluebell Drive around 11:40 a.m. when he veered for unknown reasons and struck the back of the parked vehicle, Buena Park Sgt. Mike Lovchik said.

Kamande, who was wearing his helmet and other protective gear, was treated at the scene by the Orange County Fire Authority and paramedics. He was reported dead at UCI Medical Center in Orange at 12:14 p.m.

There is no indication that alcohol or drugs were involved in the accident, which is under ongoing investigation.

Contact the writer: 714-704-3719 jterrell@ocregister.com

 Source: http://www.ocregister.com/news/kamande-287209-park-accident.html

Maurice has left behind his parents, Joseph Kamande Mwaura and Jane Wanjiru Mwaura of Juja.  He was the brother to Caroline Nduta Mwaura (Orange County, CA) Jackie Njeri Mwaura formerly of Miami, Florida and Nelly Mwaura Greene (Rancho CA).

Maurice will be laid to rest at Family home in Muruka Location, Kandara district.

For those who would like to contribute financially to help the family transport Maurice back home, a bank account has been set up and you can channel your contributions through:

Account Name: Caroline Mwaura

Bank Name: Bank of America

 Account Number: A/c #2928155688.

The family appreciates your prayers and support.

Posted in Diaspora News | Tagged: | 1 Comment »

Be-witched for Stealing

Posted by Administrator on February 9, 2011

Posted in Kenya | 2 Comments »

 
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