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If you’ve spent much time on the Internet and on personal finance sites in particular, you’ve probably heard of Prosper and peer-to-peer lending. Just for review, what is peer-to-peer (P2P) lending? It’s basically connecting those with money to invest with those who wish to borrow – cutting out the middle-man (usually banks) in the process. With sites like Prosper and Lending Club, borrowers can borrow at much lower rates and investors can achieve much higher rates than at traditional banking institutions. Believe it or not, BILLIONS of dollars have been invested and borrowed through peer-to-peer sites like Prosper. Yes, billions!

In fact, Prosper has seen 370% year-on-year growth in their business last year, lending over $70 million last year alone bringing their total lending to day of more than $260 million. And they did it with a default rate of around 5.2%, compared to Bank of America whose default rate on credit cards has been at an annualized basis of around 5.98%.

In fact, paying off high interest credit cards is the most common use of funds by P2P borrowers. Others ha

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In Chapter 7 or Chapter 13 bankruptcy, debts are classified according to certain categorizations established by the Federal Bankruptcy Code: administrative, secured, priority unsecured, and unsecured. These classifications are especially important in Chapter 13 bankruptcies, in which the class of a debt determines in what order and to what extent the debt is paid by the Chapter 13 Trustee through the Chapter 13 payment Plan.

Priority unsecured debts are paid second-to-last in a Chapter 13 Plan, and, in either a Chapter 7 or a Chapter 13 bankruptcy, a priority classifications generally means that the debt is non-dischargeable.

Income taxes, along with child-support and spousal support payment deficiencies, intentional tort lawsuit damage awards, unpaid wages owed to employees, contributions to employee benefit plans, certain claims of farmers or fishermen, and others, are, generally, priority unsecured debts that are not dischargeable.

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Tags: Bankruptcy

Fees charged

To avoid paying fees, you must take out the entire refund at the first visit to a bank or credit union that accepts Visa cards; otherwise, you are charged $10 each time you visit a teller. The ATM fee is $2.50 for machines outside of Bank of America network. The first replacement card is free and after that the cost is $5 each; express delivery is $15 per request.

If you don’t live near a bank and only use ATMs, there are limitations to to the maximum withdrawal, which is usually under $1,000. In addition, you are limited to withdrawing in increments of $10 and $20 at ATMs. If you have an odd amount left, you can’t get that from an ATM.  According to Bank of America, you are not charged a transaction fee for purchases at merchants and for cash back at many grocery and convenience stores; so this is an alternative.

Government issued prepaid debit cards

Unfortunately, this isn’t the first prepaid debit card issued to consumers from the government.  Many states issue food stamps and welfare benefits on prepaid debit cards. In fact

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Tags: Cards

The publisher of Inside Mortgage Finance, Guy Cecala, has spoken of Bank of Americas move could see them become not as competitive as they once were, as it will have one bidder fewer for its loans.

Liquidity may become a problem for Bank of America in the future since they have stopped selling home-purchase-loans to Fannie Mae.

Cecala also states that if many other banks stop selling loans to Fannie Mae and their partner company, Freddie Mac, the overall funding for mortgages could shrink and limit the liquidity of banks who are already struggling.

Following this decision, analysts have said that this could have small or indeed no effect on the mortgage marketplace because Bank of America made available only 3% of the accumulated total loans bought by Fannie Mae, in the last 3 months of the year. Despite this division between Bank of America and Fannie Mae, the bank still has plans to sell a limited range of loans to Freddie Mac.

Fannie Mae has shaken off the new of Bank of Americas decision because it can still acquire loans from anywhere due to the large market.

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Tags: Move

Lehman Brothers Holdings Inc. on Tuesday officially emerged from Chapter 11 bankruptcy protection after nearly 3 1/2 years and said creditors of the investment bank will start getting paid next month. Read the Daily Bankruptcy Review article via The Wall Street Journal.

Financier R. Allen Stanford was found guilty of orchestrating a $7.1 billion Ponzi scheme, WSJ reports.

Former MF Global Holdings Ltd. Chief Executive Jon Corzine’s family talks to Vanity Fair.

Bloomberg reports that the New York Mets might only have to pay $30 million following a ruling against them, a small amount of the $386 million Bernard Madoff trustee Irving Picard first sought.

A judge denied efforts from an American Airlines pilots union to form its own committee in its parent’s bankruptcy, Reuters reports.

Also according to Reuters, the number of “Chapter 22” bankruptcies has jumped in the beginning of 2012.

Credit Slips discusses Greece’s resemblance to a normal restructuring.

Bank of China and other Proview Technology Shenzhen Co. creditors

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Tags: Bankruptcy