Published Monday, August 30, 2010 @ 2:25 pm

Regardless of your current financial situation—from good credit to no credit—there’s no denying that we’re living in a tough housing market. So if you’re considering bankruptcy, you might think that if it’s a challenge to become a homeowner for those in the best financial times, it might be next to impossible to acquire your dream home if you’re currently recovering from a Chapter 7 or 13 bankruptcy filing.

The hard and fast truth is that getting your financial house in order following your bankruptcy, especially in order to qualify for a mortgage loan to get the home you want, is more possible than you think. That is, provided you follow a few essential steps to begin creating the proper financial foundation for building your own “home sweet home.”

Rebuild Your Credit

It’s always been important to pay your bills during and following your bankruptcy…and that’s especially true if you’re considering major purchases as your credit recovers. But building back your credit, by actions beyond paying your bills, can be the key to opening the door to home ownership yet again. While it’s not always simple to qualify, attempting to rebuild your credit potential through a secured credit card may be the quickest way to prove your financial capacity, responsibility and stability—even in tough economic times. While bad habits may have led to your bankruptcy, fiscal responsibility following your filing can pay dividends as you set your sights on home ownership.

Save All You Can
It’s vital to a more secure mortgage lending opportunity to not only rebuild the credit you have, but also to save money you need. In many ways—from relieving the burden of medical bills to curtailing credit card debt—bankruptcy can allow for the type of savings necessary to have a substantial down payment, and with it, a better shot at the home you want. Closing the gap between the value of your house and the amount your lender needs to provide makes their decision that much easier. You can build a better foundation in the future by being frugal now.

Take Your Time
While tough times might have called for tough measures, including your bankruptcy, it’s important to take a measured approach when trying to bounce back. Qualifying for a home loan post bankruptcy is a journey, not a destination, and can often take months, and more likely years. As a result, it is essential to be patient, and understand the process for generating the financial goodwill to get back in a mortgage lender’s good graces.

In short, financial problems do not represent a terminal condition when considering home ownership. And with the right economic outlook, planning and patience, you can construct a more than proper plan for making that house down the block your home post-bankruptcy.

Still unsure? Feel like you want someone to have your back when you attempt to build back credit post bankruptcy? Knowing a qualified bankruptcy attorney can not only help you conquer your creditors and face your financial fears, but also provide the right kinds of support, information and insights—at a low cost— for a viable and secure future beyond the housing bubble. The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-800-899-1414, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

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Published Thursday, August 12, 2010 @ 10:40 am

Realizing we are in debt is a lot easier than figuring how it happened. Unless you can pinpoint one central reason, like the loss of a job or long-term medical issue, it can be hard to retrace your steps to financial crisis. Plus, who even wants to? The more important exercise is to figure out how to not let it happen again. And that means determining why you overspend so you can change your habits in your life after bankruptcy.

Countless consumer studies have been done about why we spend. From psychological influences to marketing, music and social pressure, there are far too many things impacting our spending decisions. But, you don’t have to go that deep to keep yourself above water. All it takes is the ability to recognize a situation and take control. It’s really pretty simple.

It’s pretty obvious that if you have access to money, you’re going to have an impulse to buy something. Why do you think credit cards are so often at the root of a family’s financial problems? Credit cards grant us access to a spending club into which we would normally never have received an invite. Credit card approvals have become a standard for social acceptance and its chic to have a wallet bursting with different colors of plastic. Yet, here you are, in debt and unable to pay them back. So do you really have a lot of money?

We probably don’t need to remind you, but: don’t use the credit card if you don’t really need to. After your first year or two out of bankruptcy, just use them for an emergency, like a roadside breakdown or major home repair.

Another reason we overspend is music. Odd, right? Well, music plays into the psychology of spending. The right song can make us feel positive, relaxed and okay about spending some money. The next time you stop into a Best Buy or appliance store, stop and listen to what’s booming through the speakers. It’s not as random as you may think. And, even more surprising is the fact that instrumental and classical music have been demonstrated to have more impact on impulse buys than heavy or upbeat music. And in restaurants, music is often used to make you eat faster, which leads to you leaving sooner and thus, another table gets open for another customer. And so on.

Here’s one the folks at Sam’s Club won’t like to hear: buying in bulk can lead to overspending. Yeah, we know: “But I thought buying in bulk was a way to save money?” The facts are there, bulk shopping does indeed lower your per unit cost. So yes, you get more Twix bars per dollar in the warehouse club than you do at Food Lion. However, the mentality of bulk purchasing leads us to buy that extra box of Twix bars, which then pushes the grocery budget much higher than you planned. Sure, you have more, but now you have less. Get it? And once you’re home, you have a lot of candy to eat. And that’s never a good thing.

Want another hint on grocery shopping? Always do it with a list. Going to the store without knowing exactly what you need can lead to guessing, random selections and impulse buys. A list keeps you on track, providing you with a sense of purpose; in turn, allowing you to watch your items accumulate and your list grow smaller. Thus, something as simple as a trip to the store becomes an accomplishment. Just like moving on from bankruptcy.

The experienced attorneys at the Law Offices of John T. Orcutt can help you get a fresh start with bankruptcy so that you can move on to a new chapter of financial responsibility.  Call 1-800-899-1414 to schedule your FREE consultation now.

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Published Monday, August 9, 2010 @ 2:58 pm

Chapter 13 bankruptcy can be a great way to clear your financial slate, while, at the same time, entitling you to hold on to your precious property even in the most precarious economic situations. To do so, Chapter 13 bankruptcy allows you to construct what is hopefully a realistic financial reorganization plan that allows you to pay back all of your debts over the course of three to five years.

In part one of the series “Creating a Realistic Chapter 13 Repayment Plan,” we discussed how an unrealistic Chapter 13 repayment plan (i.e., one that is poorly designed, doesn’t account for unexpected expenses, and one that doesn’t keep your lawyer in the loop, combined with the debtor’s inability to stay inside a repayment ‘budget’), can lead to Chapter 13 failure. In the second part of the series, we’ll look at the importance of going beyond the bare minimum when considering a Chapter 13 repayment plan.

Under most Chapter 13 plans, debtors are expected to pay either nothing or only pennies on the dollar of their remaining unsecured debts, which are often a huge draw for people wanting to save their homes or hold on to their vehicles in bankruptcy. However, Chapter 13 does require you to pay what is required under the Means Test (usually nothing, if you have an experienced attorney knowledgeable in means  test planning).  There are some things you’ll have to pay through your Chapter 13 plan, regardless of your Means Test result.  Included in these are: arrears on domestic support obligations (alimony, child support, etc); back mortgage payments for homeowners attempting to save their shelter; certain nondischargeable taxes; and the value given to non-exempt assets.

It is important to note that these minimum payments, based on what they are, when they are, and where they are, can get you into trouble, such as:

The lengthy duration of your plan.

Your entire plan must be paid within five years. As a result, plans lasting the full five years create a situation where debtors must be accountable for a certain amount for an entire 60-month period. At first blush this might sound feasible, even preferable, to extend your plan for the entire duration allowed; but given the preponderance of incidences whereby unexpected expenses have caused Chapter 13 debtors to miss payments and fail their extended plans, it is advisable to look for a reasonable plan in the shortest period possible.

The poor timing of your largest payments.

In addition, it is also recommended that you avoid a plan that includes a schedule beginning with relatively low payments and an obligation to then increase payments toward the plan’s end. Why? The same old “unexpected expenses” scenario: a job loss, an underwater home, a new medical emergency paired with a repayment plan that puts the meatier payments at the end makes for a dangerous situation where the coffers are bare when the planned increased payments comedd calling.

Because of these two basic repayment plan pitfalls, many Chapter 13 cases are dismissed or converted into Chapter 7 liquidation bankruptcies, causing debtors to lose assets and their payments up to that point. As a result, when considering the benefits of Chapter 13, it’s also important to mindful of the basics of the repayment process, giving you the right kinds of ammunition to avoid an unrealistic plan while on the path to a better financial future.

As a result of the intricacies of Chapter 13, it is essential to consult with a qualified attorney before entering into your bankruptcy filing. A qualified bankruptcy attorney is important during the bankruptcy process to help you navigate any uncertain waters and work in your best interests during the duration of your personal bankruptcy. The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-800-899-1414, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

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Published Friday, August 6, 2010 @ 12:38 pm

Chapter 13 bankruptcy involves the facilitation of a financial reorganization plan that allows you to pay back your expenses over the course of three to five years. As a result, a Chapter 13 bankruptcy also requires that you look ahead three to five years in order to construct a realistic and sensible plan that can work for you.

Unfortunately for many people who are bankruptcy bound, the future is far from unclear. And, just as many circumstances can occur that exacerbate your financial present and force you into bankruptcy, the same unexpected scenarios—from a job loss to a medical emergency—can cause your Chapter 13 reorganization place to fail.

In part one of this series, we’ll explore why so many Chapter 13 repayment plans fail for one (or several) reasons, including:

Poor Design
A house with a bad foundation can last a while without problems; but the smallest storm, wind, or water can ruin the entire structure. The same is true with a poorly designed repayment plan. A plan that doesn’t take into consideration potential problems over the long-term is destined to fail from day one.  Working with a qualified bankruptcy attorney can help you craft a stronger and more sensible plan that takes into consideration even the smallest obstacles to success.

Unexpected Expenses
Even a good Chapter 13 plan can be stymied by unexpected expenses. Just consider today’s economy, for example: Many experts could not have predicted the record joblessness, housing crisis, and unprecedented economic downturn plaguing much of America for the past three years. Similarly, many debtors entering a financial reorganization plan post bankruptcy will likely face an uphill battle if they do not take into account unexpected medical bills, unemployment, the possibility that they owe more on their home than it’s worth, and other catastrophic changes in their economic well-being during the entire course of their bankruptcy.  If these changes occur, it is possible to modify your plan and keep your bankruptcy alive. It’s important to inform your attorney of any changes immediately so that a timely modification can be made.

Inability to Live Within the Repayment “Budget”
Oftentimes, many consumers fall victim to the same budgeting woes that may have created their financial mess. Instead, our clients are encouraged to use their reasonable repayment plans (emphasis on “reasonable”) as a type of bankruptcy-sanctioned “financial planning,” that allows them to follow a schedule that alleviates debt while providing room to save and spend wisely.

Keeping Your Lawyer Out of the Loop
In what can be considered to be the worst case scenario, one or more of the above reasons is compounded to cause the debtor to get potentially fall behind in their Chapter 13 repayment strategy. What’s worse however is when the debtor fails to alert their bankruptcy lawyer to these facts. It is of the utmost importance to advise your lawyer of this change in circumstances so that the problem can potentially be dealt with before it gets too out of hand.

As a result of the intricacies of a financial repayment plan, it is essential to consult with a qualified attorney before entering into Chapter 13 bankruptcy. A qualified bankruptcy attorney is important during the bankruptcy process to help you navigate any uncertain waters and work in your best interests during the duration of your personal bankruptcy. The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-800-899-1414, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

Cary bankruptcy lawyers. Lumberton bankruptcy attorney.

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Published Friday, July 2, 2010 @ 8:14 am

Bankruptcy Myth #1: You won’t receive credit offers after your bankruptcy.

Don’t be surprised to receive many credit offers following your bankruptcy. Car lenders, mortgage financiers, credit card companies and more, often line up for the chance to provide post-bankruptcy debtors with all types of consumer spending opportunities.

Bankruptcy Myth #2: Taking creditors up on all of their offers is a good thing.

These same lenders and card companies are also coming forward to capitalize on the clean financial slate your bankruptcy provided.  Unfortunately, many of these so-called “helpful” creditors are actually subprime lenders targeting average Americans just like you who are attempting to improve their credit and get back on their financial feet.

As a result, post-bankruptcy beware quick credit offers and avoid subprime lenders by following a few easy tips to stop the cycle of debt and get back on a better budgetary track:

Remain Vigilant About Your Credit Report
It may sound obvious, but in the months following your bankruptcy, your credit report should accurately show that the debts you discharged in bankruptcy are fully discharged. If discrepancies appear in your report, rectify them by contacting your credit bureau and calling attention to the errors. The power of an accurate credit report post-bankruptcy cannot be understated: fewer debts; higher credit scores; attracting higher quality lenders for better credit offers.

Pay Your Bills
Improving your credit post bankruptcy is as easy as paying all of your bills, all of the time, on time. From house notes to car loans to utility bills and more; anything that you kept and continue paying for, on time, post bankruptcy reflects a positive payment history and a better credit report. These small fiscal steps can improve your credit rating and provide more wiggle room to work with better lenders in the long-run.

Be Choosy With Your Credit Cards
In many cases, credit cards are the culprit in necessitating a bankruptcy filing in the first place. Don’t make the same mistakes twice. Seek out a secured credit card that can reflect positively on your payment history and show early signs of responsible credit use. In addition, keep up your credit card payments and keep in mind that credit does not equal cash, but merely a way to keep up appearances that you are an accountable consumer and worth lending to. As such, use credit cards infrequently.

Read Everything
Even infrequent use of credit cards can cause serious financial woes if you don’t read the fine print. To avoid unwieldy interest rates and fees, carefully read all terms and conditions when applying for credit.  While new credit card legislation was enacted to minimize the amount of surprises and confusion when dealing with creditors, it’s important to be your own best watchdog when warding off predatory lenders.

Even if you haven’t been through a bankruptcy yet, , understanding the tips listed above can help you avoid bad lenders and bad debt. If you’ve already succumbed to subprime loans, there’s never been a better time to contact a qualified bankruptcy attorney that can help you to conquer your creditors and face your financial fears, yielding the right kinds of support, information and insights—at a low cost— for a viable and secure fiscal future. The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-800-899-1414, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

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Published Saturday, May 29, 2010 @ 8:38 am

In the last ten years, self-storage centers have infiltrated America faster than a bad singer on YouTube. From basic storage sheds with individual bays to climate-controlled multi-story complexes, we have become a nation obsessed with storage. Heck, you can even invest in a garage condo today.

Now, let’s juxtapose our need for storage with the general financial position of so many American families right now. There is really no more proof of our collective love of useless consumer products than the need to pay $100 month just to store it.

And if it’s not in a storage facility, it’s pushing the car out of the garage. Take a walk some evening and glance into some of your neighbors’ garages. Many of them will be floor to door opener in boxes, old bikes, broken furniture, unused plastic playhouses and a healthy collection of old electronics. You may also see a nice clean path that’s been blazed to the house entry. At least, that’s where we hope it leads.

There is little question that in the last number of years, our country has been filing bankruptcy because of what’s in our backyard sheds, garages and expensive storage facilities. We’re well aware that many of you have filed because of unemployment, medical hardships and crushing home debt. However, we do see a good number of folks who simply spent too much on pretty much nothing. Nevertheless, they deserve our help too, and that’s why we’re here.

A big part of your rebound from bankruptcy is learning how to avoid the same mistakes—and the desire to have the latest and greatest of everything is a big one. One way to help rid yourself of the ghost of all those “things” that led you to bankruptcy is to sell all the junk cluttering your life. Thankfully, there are a number of great ways to do it.

Your church is a terrific place to start unloading some of your unwanted financial baggage. The upcoming rummage sale or fundraiser is a great reason for you to clean out your garage.

Ebay can be helpful in selling things but can be cumbersome at times and requires more work than just a simple, outright sale.

Look into Craigslist.org, too. The site is narrowed down by category quite nicely and allows for direct communication. If you have some luck with a buyer, go meet them in a public place with your goods; don’t have them come to you. Use the parking lot of a local fast food restaurant to make the sale and be sure to tell someone where you’re going or bring a friend with you.

Lastly, never forget the old fashioned garage sale. Some people live and die by these weekend rituals and will be at your door before dawn. So be ready early.

Remember, the point isn’t to make money on these items, it’s to simply get them out of your life. If you focus on profit, you’ll find yourself too concerned with price and convince yourself that something is worth more than it is. Before you know it, you’ve shined it up again and stuck it back on the shelf.

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Published Thursday, May 6, 2010 @ 6:06 pm

It was easy to spend money a few years ago, somewhere around late 2005 and into 2006, when the economy was flying, anyone could get a loan and every house in the zip code was appreciating at eight percent a year.

Those who managed to avoid subprime loans and the desire to keep up with whatever the other side of the cul-de-sac was spending turned out to make it through the recession in decent shape, provided the unemployment crisis didn’t catch up with them.

Truthfully, the degree of financial difficulty at which someone finds themselves is no measure of intelligence or social wherewithal. In many cases, the difference between staying above water and getting flushed down the financial torrent is simply a matter of luck. Some people step on a hard-to-see loose stone when navigating dangerous waters and others don’t. It’s that simple.

Lifestyle choices do have a great deal to do with bankruptcy. Sure, many people have to file because of things well out of their control. Heck, that’s why the bankruptcy code functions like it does. Nevertheless, you can make decisions that will either prevent you from getting into serious long-term debt or help you rebuild after filing. It’s a matter of discipline, economic cognizance and common sense.

Key to keeping financial order in your life is to avoid the desire “to own”. Instead of accumulating “things,” accumulate experiences. Focus on staying healthy, emotionally and physically. Deep debt can really take a toll on one’s psyche. It can pull at the edges of a marriage, damage relationships with friends and invoke self-doubt and even depression. Once out of the woods, you should be able to only see things that matter, which will help you avoid becoming stressed over the next bill that arrives. Now you know how to handle it. The money is there and the bill gets paid. Bankruptcy helps you separate money from emotion. Thus, you can focus your well-being on rebuilding not only your credit record but the holes that appeared in your circle of friends and family.

Many studies have demonstrated that eating well impacts mental states and yes, the state of your bank account. It’s no secret that healthy food often costs more. However, the savings show up in reduced health care spending.

We know these tips are easier typed than done. But we’ve been in the bankruptcy business for a long time and hopefully you only have to go through it once. Give it some thought. Stay healthy, and stay wealthy.

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Published Sunday, April 25, 2010 @ 8:08 am

With rising foreclosure rates, escalating health care costs, recent credit card company schemes and unprecedented unemployment, most people would think they’ve seen it all in this unprecedented economic downturn.

But wait, there’s more.

In these tough financial times, scam artists are coming out of the woodwork to prey on the most hard hit by this decade’s Great Recession: persons needing the benefits of, or having already filed for, bankruptcy.

First and foremost, scam artists are in the habit of targeting debtors who are willing to do whatever it takes to avoid bankruptcy.  According to the Center for Responsible Lending, common predators prior to your bankruptcy include even legal payday lenders and debt settlement agencies. Most experts agree, even in a financial meltdown, the fastest way to go broke is through payday loans. For example, if you’re like many Americans, you may be facing the economic crisis head-on, and whether that looks like a missed mortgage payment or hovering health care costs, a payday loan might seem like an easy way to weather the storm. But the opposite is true and the reason is simple: exorbitant interest. With interest rates equaling as much as 400%, these types of loans are a recipe for disaster, leaving desperate borrowers unable to repay.

In addition, you also have to mindful of other “credit repair” scams, including debt consolidation scams, mortgage modification scams, and foreclosure prevention scams in addition to outright identity theft through stolen credit cards and identities. Keep in mind, people who are in financial fix and seeking a commensurate “quick fix”—but who have not sought the advice of a bankruptcy attorney—tend to be most vulnerable to these scams and debt payment plans.

Also, many financial experts warn against “Nigerian 419″ scams (email request to help get money from Nigeria into the United States, by accepting money into your own bank account in exchange for a share of the financial rewards) and common “Chain Letter” scams (a modern re-envisioning of a pyramid scheme).

Next, be wary of offers for a “free” credit report. In order to get these predatory reports, you are required to enter your credit card number, which opens the door to identity theft.  Even in cases where an actually credit report is sent, sometimes charges can begin appearing for things you agreed to in the reporting site’s fine print.  Remember, the only truly free reports come from the credit bureaus themselves and do not require a financial placeholder in the form of your credit card.

Unfortunately, you can find scam artists seeking your business  even after your bankruptcy has been filed and fulfilled. These scam artists are often looking to provide benefits that are more difficult to find for bankrupt people. In addition to predatory “credit rebuilding services,” post-bankruptcy scammers will often offer low-balance credit cards to debtors emerging from bankruptcy, sometimes with activation and membership fees that can push borrowers over their credit limits before they’ve even had a chance to use the new card.

To avoid the pitfalls and pratfalls of scammers, the key is knowing resources that can actually help. A qualified bankruptcy attorney can assist proud, to conquer their fears of losing it all.  Specifically, the bankruptcy attorneys at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-800-899-1414, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button. We’re here to help.

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Published Thursday, April 8, 2010 @ 9:18 am

This blog talks at length about savings strategies and offers a great deal of consumer spending advice. Our goal is to create an all-encompassing approach to helping readers, clients and potential clients be financially successful after bankruptcy.

Having a healthy savings account should be the goal of anyone rebuilding after bankruptcy. But after the great bank fallout of the last two years, it’s becoming hard for a lot Americans to trust some of our nation’s largest financial institutions. Not only are the rate of return on these accounts very low, it seems every day banks are surprising account holders with a sudden fee or reduction in service.

If you remain skeptic and trust your tech-savvy, Web-based banks offer a number of attractive reasons to earn your savings account business.

Online banks can limit fees and offer higher interest rates because they do not have expensive overhead to cover, like hundreds of brick-and-mortar branches, thousands of employees and millions in advertising budgets. It also costs them less to service the customer because the means by which they do it—typically e-mail and instant messaging—costs much less than a person standing behind a counter.

Many online banks do offer phone service, so you can speak to someone when necessary. Another way they can limit fees—and this is a good thing—is by limiting access to your cash. No, not in a negative, “you can’t have it” kind of way but more so by not having ATM machines or again, physical branches.

Since everything is set up electronically, you can establish a line of connection between your online savings account and a local branch where you maintain a checking account. So yes, you may still have to deal with the big guys to some extent. In that respect, look around for a regional bank with only a few branches. Many of these institutions still do business like they used to, with neighbors working behind the desk and managers who remember your name.

Many online banks also limit the number of transfers you can arrange in a given month. Again, a good thing. Savings accounts are not meant to be accessed like a checking account. Unless you need it, it’s best to let the money sit. It should be noted though, that the transfer limit is set by federal law, not the banks.

Lastly, these banks are experts in user studies, creating Web sites that are very easy to use, navigate and set up. Thus, you don’t need to be a Web genius to online and start saving. If interested, do some comparisons. A site with current comparisons can be found at: http://moneyning.com/online-savings-accounts/.

Brought to you by the Law Offices of John T. Orcutt. With offices in Raleigh, Durham, Fayetteville, and Wilson, we’re always close to you. Call today for your free debt consultation. 1-800-899-1414.

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Published Wednesday, March 24, 2010 @ 8:00 pm

In this economy, qualifying for a bank loan or line of credit can feel impossible—even for people with perfect credit—and much more so if you’re trying to bounce back from a recent bankruptcy. But a bit of patience (targeting smaller community banks rather than large corporate banks) and a bit of help (getting others to vouch for you) can improve your odds tremendously—even in this uncertain economic climate.

As Robert C. Seiwert, senior vice-president of the Center for Commercial Lending & Business Banking at the American Bankers Association told Businessweek,  “A bankruptcy can hurt your chances of getting new credit for at least seven years. What gets damaged in a bankruptcy is the view of your character. A banker wants to know, even if you have the money to repay a debt, will you? If you get into trouble, will you work with the bank or walk away?”

As a result, the key is doing a bit of little local legwork: finding community banks who will see you for more than just your credit score. “The bulk of community banks evaluate your application by sitting down and talking with you, looking at your specific collateral and your cash flow,” Seiwert told Businessweek.

So what do you do when you find a bank community or small regional bank? Rule one when approaching your friendly neighborhood loan officer: be honest. Explain what happened leading up to your bankruptcy; how you’re back on financial track; and exactly what you need to keep moving. “If you can show that you did your best to make good on your obligations after the fact, or that you intend to pay back that loan now that you’re profitable again, that will go a long way to restoring that chink in your character that the bankruptcy suggests,” Seiwert told Businessweek.

Rule two is to play the financial field. Talk to multiple bankers, evaluating which of the local banking bunch seemed most welcoming to you and your business—even if they initially turn you down. “Stay in the loop with those bankers. Contact them occasionally and let them know about your progress,” Seiwert said. “It’s absolutely critical that you keep following up” to improve your chances of getting a line of credit in the future.

Rule three, is to start off small. Gradually work your way up to a larger loan or credit line as you improve your credit score. If you pay your loan on time for a series of years, your local bank will be more inclined to offer you more.

Another rule of the financial road is to seek nontraditional partners. In addition to depending on the kindness of banking strangers, turning to your businesses’ customers or colleagues to make an introduction for you at a bank to help you get your foot in the financial door. If either is willing to co-sign on your loan, or loan money directly to you as well, all the better. And never forget that people with excellent credit make for great business partners in this process, convincing banks to accept your risk to work with them.

So, if you’re bankruptcy bound and seeking solutions for continuing your business, the bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-800-899-1414, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button and let these experts smoke out your next best financial steps.

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Published Friday, March 5, 2010 @ 10:31 pm

Successfully coming out of bankruptcy is a financial rebirth. As you move on from your financial setbacks (and you will), you will be better prepared to build a healthy fiscal future. Part of that, or better stated, a huge part of that, will involve how you make decisions regarding money. It would be understandable, for example, to simply save everything in a conservative money market (savings) account or maybe drop a small bit of your monthly income into a 401k. Both options are solid and should be considered part of a comprehensive investment strategy.

So if bankruptcy has changed the way you handle money and it’s time for you to start moving forward building responsible, long-term wealth, consider the following investment tips:

1. Stocks have consistently outperformed all other investment methods.
Since literally before the Great Depression, the best asset class in which to have money invested for the long term is the S&P 500. The “Standard & Poor’s” 500 is basically a group of stocks from 500 common large-cap companies. “Large Cap” is another way of saying very big, publicly traded companies. Remember though, stock investing carries risk, so we strongly encourage you to consult a professional financial planner.

2. For the short term, stocks can be dangerous.
You know that whole day-trading craze? Yeah, well ignore it. Don’t try it. Those E-Trade babies are witty but they’re not talking to you. Trying to make money on stocks with brief holding periods is rarely a healthy investment strategy. Stocks are better when held for the long term. Allow the ups and downs to happen, and don’t panic. And again, talk to an experienced professional.

3. Inflation can hurt long-term investments.
Inflation is just another way of explaining the general increase in the price of consumer goods. Movie tickets going from $1.25 to $9.50 is an example of inflation. If you buy stocks this year at a certain price and next year inflation erases, let’s say the average of about 3.2 percent of your dollar’s worth when you bought those stocks, suddenly your investment isn’t worth as much. In other words, every year, a dollar buys less, so what portion of a stock you could buy for a dollar has become smaller. Thus, this is exactly why you want to hold retirement accounts for as long as possible, so they eventually outpace inflation as the market goes up over time.

4. Diversify.
Like a buffet restaurant? Good, now take the same approach with your investing. Don’t just buy stocks or just buy bonds. By spreading your money around, you reduce risk. As one investment falls another may rise. This is where your financial adviser can really help, as too much diversification can slow growth, so let them arrange for you a solid variety of investments that will still grow your money.

5. Pay attention to earnings.
As you get used to this investing thing and want to start making recommendations to your planner, watch a company’s earnings. A lot of things can impact stock prices but over the years, there has been no better indicator of stock performance than earnings. If a company makes more, it’s stock will follow.

In summation, we can’t express enough the importance of working with a legitimate, certified financial professional when it’s time to invest. You’re uncle or spouse’s brother doesn’t count. Even if they have an E-Trade account.

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Published Friday, March 5, 2010 @ 4:30 pm

Life after bankruptcy is beautiful thing. Your stress levels go down and you become more confident with money. Now that things are back on track, maybe it is time to take a whole-life approach to changing the way you live. For some, it’s a new, but smaller, home; a more economical car; or a strict monthly budget. For others, re-starting your life may include relocating. Boy, that sounds like a big decision, huh?

So if you have a new financial outlook on life and think it’s time to move, where would you go? Thankfully, our friends at Forbes.com have researched a list of the best cities in America for “getting ahead.” Their research was based primarily on areas that have good job growth and income growth and a relatively affordable cost of living. Call U-Haul, because here are some of your options, in no particular order:

Like Winter? Well, if so, point the GPS toward Delaware County, Ohio. The home county of Columbus has a three-year income growth of 11 percent and is the fastest growing county of the state. Forbes tells us it has a wide variety of jobs and a number of grounded, family-oriented neighborhoods that help prop-up a stable workforce.

If you don’t mind the rooting for the Texans over the Cowboys, Fort Bend County, Texas, outside of Houston, realized 10 percent job growth between 2007 and 2008 and added just under 6,000 jobs since the middle of 2007. A large portion of employees can be found working in energy companies but it’s diverse enough for people to find opportunity in education and hospitality. Many members of Forbes’ 400 Best Big Companies reside in Fort Bend County.

Another relocation is near Frank Sinatra’s kind of town. No, not Vegas. Chicago. Outside of where the wind blows is Kendall County, an area that experienced a 90 percent population increase from 2000 to 2008 and as a result, a seven percent jump in income. You can find another attractive option near Chicago in Will County, Ill., which in 2007 and 2008 saw its residents’ income climb by seven percent.

A bit north, you can settle in balmy Carver County, Minnesota where income jumped by five percent for the same two years. Carver is close to Minneapolis, one of the Twin Cities along with St. Paul which are consistently present in many “Best Places to Live” lists.

If the Midwest or Lone Star State do not appeal to you, head just north of the Triangle to Hanover County in Virginia, an area which saw its per capita income also grow by five percent.

Drive by an ever-expanding government, other regions in Virginia that made the list include Loudon and Alexandria Counties. However, even with the income growth, these areas are very expensive in which to live. Thus, their presence on the list is somewhat questionable because for the most part, to get ahead in Alexandria County, you need to already be ahead.

Relocating can be an expensive endeavor. If you are lucky enough to have a new employer cover some costs, then terrific, you are already on your way. The key is to start planning early and do not rush. After all, it’s not like the real estate deals are going anywhere.

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Published Friday, February 26, 2010 @ 4:19 pm

Everyone—from the halls of Congress to the many channels of media—is paying a ton of attention to those Americans who have lost their homes in the seemingly endless mortgage meltdown. Virtually ignored have been the millions who continue to pay their mortgage every month, even when they really can’t afford to. As a result, most homeowners are losing big on what used to be their biggest investment.

Which begs the question: Is the best solution to stop paying your mortgage?

For homeowners around the country who haven’t skipped their mortgage payments—but are seriously struggling—there are several reasons why homeownership is going less than swimmingly:

You’re Trying to Staying Afloat While You’re Underwater
Many of you are struggling to pay off a mortgage balance that is significantly higher than the value of your home. As a result, selling your home is simply not an option, since you would ultimately have to come up with the difference to settle with your lender.

You’re Drowning in the Deep End of Debt
Many homeowners just like you are spending down their savings, taking cash advances and/or relying on credit cards to buy bare necessities. Why? Because you’re using every actual dime that’s coming in to keep up with your mortgage payments. The result is millions of Americans who are not only underwater on the their mortgages, but who are also drowning in debt.

While staying current on your home commitment is admirable, and very much the American way, it’s also a quick and easy way to drain your savings, retirement, or nest egg, while also accumulating enormous debt, simply to avoid the dreaded “F-word.”

Consider Foreclosure
While it can be scary, this particular “F-word” can be your first, best step to a pair of “F” positives: financial freedom. If you are now hundreds of thousands of dollars underwater and go into foreclosure, your losses are essentially erased. In most cases, your lender can take the house, but not your future earnings with the only real financial consequence being trouble getting a loan for almost a decade (in an era when getting a loan isn’t easy even for those with stellar credit).

Unfortunately, most foreclosure alternatives are simply bad ideas. Let’s take, for example, the short sale. In a short sale, the lender is agreeing to accept less than what is owed to satisfy your loan. Assuming you find a buyer, you will then have run the offer by your lender. Even if they decide to go along with it, you could still be stuck with the deficiency if you’re not careful. That’s not to mention the tax implications of the forgiven debt. Why go through the hassle of a short sale, if it’s just as likely to hurt your credit, and may lead to even more debt.

Another foreclosure alternative, the loan modification, would be an option if lenders were granting permanent modifications. The problem is, most lenders are understaffed, behind on applications, and you’re likely to get lost in the shuffle. As of 9/1/09, over 362,000 loans have been granted a trial modification. Of those trial modifications, only 1,711 have been approved for permanent modifications.

And Then There’s Bankruptcy
If your credit score is going to suffer anyway, why not create a completely clean slate? As a hurting homeowner, knowing a qualified bankruptcy attorney can also help you face your financial fears, yielding the right kinds of support, information and insights—at a low cost— for a viable and secure future.  The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-800-899-1414, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

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Published Sunday, February 7, 2010 @ 12:54 pm

In the Bad Ideas for the Bankruptcy Bound series, you’ve received an introductory look at the many reasons why it’s never a good idea to hide, or attempt to hide, a bankruptcy filing from your spouse. In later discussions we’ve seen how to avoid many of the pitfalls and pratfalls of filing for personal bankruptcy, including transferring property, using credit and avoiding creditors. Here, we’ll expand on why automatic bill payments from your checking account can lead to a loss of precious control for the bankruptcy bound.

Without a doubt, the ease and convenience of having recurring monthly bill payments paid through an automatic deduction from a checking account has made the time-saving process a no-brainer for many time-stretched citizens.  From car payments to credit card bills, automatic bill pay seems a trusty deduction process that avoids snail mail send outs, freeing up time, and peace of mind, to move on to bigger and better things.

But many argue that “free time” is precisely the problem for many cash-strapped citizens.

While auto pay allows for other things, it also frees up space for financial matters to go unnoticed. Precisely the same logic applies in credit card spending: you pay for items without the immediate financial repercussions, and pressing conclusions, that you’re spending money you don’t have.

Not thinking about fiscal matters is not only the exact opposite thing a cash-strapped person needs to do, but it also leads to a continuous cycle of avoiding the painful, but necessary, lessons of budgeting funds and reacting to changing financial circumstances: precisely the same denial of dire financial straits that put so many in a poor economic condition in the first place.

Like a credit card, having an automatic debit of a car payment, or gym fees, or house note, taken directly from your checking account, deprives you of the ever-important opportunity to think, however briefly, about the quality (and quantity) of your spending.  The auto pay acts like a thief in the night, taking from your precious and limited funds without concern or awareness for your balances. Too many of these “takings” can wreck monthly finances and take away a person’s power to prioritize each precious payment.

As such, in addition to making budgeting difficult, automatic bill payments from your checking account also take control away from the debtor—removing any option to determine when to pay which creditor and how much. This small fact can have a major impact on basic needs as auto pay can give your gym membership payments priority over that of your mortgage or car notes.  Not only that, but depleted accounts can mean substantial upturns in interest when credit card bills come due unexpectedly through the auto pay process.

What’s worse, if you’re considering bankruptcy, automatic bill payments can be especially inconvenient in terms of losing track of who’s getting what. Long story short, auto pay plus bankruptcy can mean you unwittingly pay out to creditors from whom your debts are discharged. For example, once you file for bankruptcy, non-exempt bills currently paid by auto pay will be discharged—either through a bankruptcy discharge of the underlying debt, or through a Chapter 13 plan to pay back debt incrementally.  Untracked auto payments can mean your creditors get payments they don’t deserve—especially if it takes transactional time to cease the automatic  debits.

So whether you’re filing for bankruptcy or not, begin 2010 by taking control of your personal finances. Pay your bills with your checkbook, confronting your debt head-on.  After all, it’s your money—treat it like you own it, and remember to “check” before you “spend.”

If you are considering bankruptcy, knowing a qualified bankruptcy attorney can also help you make the right spending decisions, yielding the right kinds of support, information and insights—at a low cost— for a financially viable and secure future.  The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-800-899-1414, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

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Published Saturday, February 6, 2010 @ 8:29 am

As someone facing serious financial difficulty, learning how much money is made by the huge banks to which you owe money can be frustrating. While we understand that we need to be accountable for our decisions, it stings to realize that profit models are often based on customers going into debt. Therefore, we can’t help but a feel a bit had, like the rube who just bought a cure-all tonic from the traveling pitchman selling from a horse and buggy.

CNN.com published an article recently that described what it deemed the “biggest rip-offs” in today’s society. We thought it relevant because knowing how some of these products are sold may encourage you to quit buying, using or subscribing to them and in the process, start saving more money to pay down debt or keep rebuilding after bankruptcy. We’ve summarized a few here:

Text messages
Wow. Rapidly replacing e-mail as the communication tool of choice for everyone under 25, text messaging has seen nothing short of a meteoric rise in usage in just the last 24 months. It’s an entirely new communication vertical, spawning marketing strategies and literally changing the way cell phones are developed and sold.

No doubt you have seen teenagers, maybe even your own, thumbing madly away on their mobile device, ignorant to the world around them. Well, with every OMG and TTYL the cell phone companies are LOL. Really loudly.

Text messages, which are causing cell phone bills nationwide to climb to record amounts, cost wireless phone companies roughly one-third of a cent to deliver. However, they cost you on average up to 20 cents to send and 10 cents to accept. That’s a 6,500 percent mark-up. :(

“Free” Credit Reports
Here’s one that stings. In a time when the nation is collectively reeling from a historic recession, when foreclosures are rampant, bankruptcies booming and no one’s credit rating is safe, several organizations are profiting off of selling you your own personal financial data.

You know the biggest name, Freecreditreport.com. The cheesy songs and redundant commercials sure do hit their target. But what they don’t do is sing honesty. At this site, and others like it, your credit report is not free, it’s simply provided for you in return for a monthly credit monitoring service. It’s like the cable company telling you HD programming is free.

Chances are, if you are worried about your credit report, you can’t afford another $15.00/month. The company is owned by Experian, a credit reporting agency, which means it costs them nothing to give that report to you. Let this sink in: a representative for the company had this to say: “We do realize there are a very small percentage of consumers who genuinely do not understand they have signed up for a credit monitoring service. We work to resolve issues with these consumers on a case by case basis.”

For a truly free report, as provided by law, go to: annualcreditreport.com

Movie popcorn
On the lighter side, it’s no surprise that movie food is expensive. Heck, they don’t even hide it. However, the movie industry is set up so theaters see a very small cut of the ticket proceeds. Therefore, concessions are their true money maker. Popcorn, for example, has a 900 percent mark-up, costing about $.06 to make and around $6.00 to eat. Many theater owners consider themselves to be in the concession business, not the film industry. As the recession continues its grip on the country, watch for more theaters to start offering beer and wine.

If you reserve a night out at the movies for the occasional reward for good financial behavior, skip the concession stand. Sneak in a bottle of water and some gum. Your cholesterol level will thank you.

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Published Friday, February 5, 2010 @ 12:07 pm

Foreclosures have become a plague across the country, sickening the economies of small towns, the general contractor industry and even the commercial real estate industry. No facet of the real estate world has gone unaffected.

Whether your home was foreclosed upon or your mortgage lender granted you a short sale (negotiated permission to sell your home for less than what is owed), it was probably considered a tremendous relief to drop the proverbial financial anchor tied around your neck.

However, thousands of Americans once in the same boat are now finding that the tide is again rising around them, as banks and lenders are coming back months later for the remainder of what is owed on the home. The most common occurrence of mortgage companies coming back for the difference is happening after auctions when a home did not sell for enough money. But it’s also happening after bank-approved short sales.

A woman in Virgina, who legitimately short sold her home after a divorce and her commission income plummeted as a result of the recession, was shocked to receive a letter from an attorney stating she owed the bank another $65,000 months after the sale closed. Called a “deficiency judgment,” the extra amount owed eventually led to her having to file for bankruptcy.

It is a common belief, and in most cases the truth, that a short sale ends a commitment to owing any more money on a mortgage. However, banks are finding a way to come back for more through the use of deficiency judgments. Often, a former homeowner doesn’t get notified of the judgment until months later.

And, believe it or not, some banks will wait until you have become more financially stable before pursuing the deficiency.

Making matters worse is that the practice of short-selling, which is the most common cause of a deficiency judgment, isn’t just a strategy used by those who took out a sub-prime loan or who are facing foreclosure. Homeowners with standard mortgages who simply watched their home value fall can use a short sale, even of just a few thousand dollars, to get out from under their mortgage.

A number of factors also contribute to whether or not your lender will pursue a deficiency. For example, the foreclosure rate of your home state can play a role, as can the presence of any additional liens you may have had on the home, like a home equity line of credit or second mortgage.

Still, because a deficiency judgment can follow you anywhere and lead to the garnishment of wages and serious credit report marks, it is essential for you to make certain that your short sale or foreclosure is indeed the end of your relationship with that lender.

But without a promise in writing, are you really going to trust the lender’s word that your debt has been extinguished? The only way to ensure a lender does not try to collect from you after a foreclosure or short-sale is to coordinate foreclosure through a bankruptcy. In bankruptcy, you can surrender your interest in the property, ending any possible future liability should the property sell for less than your mortgage.

And despite what your bank has told you, you don’t need to short sell your home. Obviously, your credit is already going to take a hit from conducting a short sale, even if you haven’t missed any payments. Going through the hassle of a short sale with no perceivable benefit for you or your family is just senseless. The only beneficiary of a short sale is the lender, who saves on the expensive legal costs of a foreclosure. Do you and your family a favor, talk to a bankruptcy attorney today and discuss your rights under federal bankruptcy law.

In North Carolina, contact the Law Offices of John T. Orcutt at 1-800-899-1414. With convenient offices in Raleigh, Durham, Fayetteville and Wilson, we’re close to you.

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Published Friday, February 5, 2010 @ 10:06 am

Try as we might to understand some the esoteric banking principles that contributed to the recession or give the industry any benefit of the doubt, the folks on Wall Street just keep giving us reasons to believe they are, and will forever be, drastically out of touch with the way the rest of America lives.

Last year, CitiBank, one the nation’s major banking services players, announced a plan to provide customers with a truly free checking account, provided some account usage stipulations were met, in an effort to attract new accounts and to do their part in helping us stave off the effects of the recession. However, come November 2009, an announcement was made that additional fees would be applied to individuals that carried less than $1,500 in all accounts.

The fees were going to be applied to “EZ Checking” and “Access” accounts. The products would allow customers who made at least two monthly online bill payments or used direct deposit to not be subject to maintenance fees and per-check charges.

Needless to say, this did not sit well with a lot of people. Nor did it pass the smell test for the New York State Attorney General’s office. Citing that the bank did not make it known within a reasonable timeframe that the fees would kick-in, Attorney General Andrew Cuomo managed to convince the bank to suspend any impending costs for consumers who had signed up for the accounts.

Those who registered for one the “free accounts” can continue to bank free of charge until the end of January of next year. Despite the case being tackled in New York State, customers across the country are eligible to continue using their accounts without being subject to the announced fees.

Cuomo, in a press conference about the settlement, spelled it out clearly for CitiBank customers. “If you signed up for free checking, the bank can’t change the terms and must extend the offer for a reasonable period of time. We are defining reasonable, in this context, to be for one year.”

The practice of surprising consumers with short notice announcements of interest rate hikes or banking fees is exactly what led to the recently enacted credit card reform. Far too many Americans have been subject to incentives that promise free services and discounts only to have them yanked away at the moment it hurts the most.

There is nothing wrong with a company making money. However, doing so with deliberately vague or misleading tactics is an entirely different story. There is not one in the industry that believes CitiBank intended to continually provide its customers with free checking; not in this economy. And sure, their marketing is most likely perfectly legal. But is it ethical?

These tactics can lead those teetering on financial ruin right over the edge and often into bankruptcy. Worse yet, it can severely disrupt the plans of a person emerging from bankruptcy who was seeking affordable checking options.

Consumers continue to be victimized in today’s post recession-landscape. And while Washington is doing what it can to adjust mortgages, ease bankruptcies and fix unemployment, there seems to still be too many sharks and plenty of guppies. Stay on your toes, folks.

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Published Sunday, January 24, 2010 @ 10:25 am

So the impact of your bankruptcy is settling in. You have mixed emotions but underneath, feel confident that it was the right thing to do. The phone has stopped ringing, the mailbox delivers good news (for the most part) and best of all, you can sleep again.

Now that it’s time to get back on track, saving money should be a top priority. And one way to do that is by examining what it takes for you to keep a roof over your head every month, even if you managed to avoid foreclosure. Today, thanks to the real estate crisis which saw developers nationwide building new home homes and apartment communities on every plot of improvable land, it is a buyer’s market. Or in your case, it can be a renter’s market.

Apartments today are not what they were 20 years ago. Heck, they’re not what they were 10 years ago. Amenities like multiple pools, saunas, movie theaters, free Internet Access, fitness facilities, online rent payments and adjacency to high-end retail and entertainment districts make apartment living a very attractive and value-driven living option.

It’s important to put aside for a moment the aura of home ownership. There is without doubt pride in being able to maintain a home. The neighbors, yard space, security—all elements that many consider part of the American Dream.

However, the “dream” is not really home ownership. It’s about seeking a sense of accomplishment and the ability to create opportunity. But that’s not what happened.

Because home ownership was at one time a rare thing, a symbol of iconic Americana, it became the physical manifestation of our desire to experience those concepts. We somehow believed the signing of a mortgage was tantamount to everything our grandparents came here for.

However, the “dream” continued to manifest, morphing into a distorted, material facade of success–yet another symbol of where we like to position ourselves within society. And through the fog of that notion we watched the American Dream derail and plow violently through the psyche of the masses.

Now, as we learned in the crash’s aftermath, people are just happy to be under a dependable roof. And that’s a good thing; because maybe now we’ll realize that upon examination of our cost of living, we’ll realize just how much money we spend on what we were told was the culmination of the American Dream: owning a home.

The point here is that the housing crisis helped facilitate a historic financial demise. It was the marketing of home ownership in the face of viable, more than suitable alternatives in the the apartment market that led hundreds of thousands of Americans into foreclosure. Now all that’s left are faint apologies and the drive to get the Dream back on track.

Today, apartments are plentiful. Nice, well-kept three and four bedroom flats with multiple bathrooms, tile floors and clean carpets. In fact, according to new industry report, there have not been so many available apartments in three decades. The national average vacancy rate (the percentage of vacant apartments of total available) is 8 percent, which is the highest number the reporting agency has ever published as a country-wide statistic.

So do you know what that number means for renters? Savings.

A high vacancy rate means landlords are willing to negotiate to the fill their vacant units. In other words, renters have the upper hand. And for someone trying to save money and build a life after bankruptcy, renting should be a serious consideration, regardless of your current living situation.

Know someone who would also benefit from filing bankruptcy? Keep in mind that the Law Offices of John T. Orcutt offer a totally FREE consultation out of 4 offices conveniently located in North Carolina: Raleigh, Durham, Fayetteville and Wilson. The number is toll free 1-800-899-1414, or suggest they visit the website at www.billsbills.com for information about just about everything there is to know about bankruptcy, how it works and what it means.

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Published Thursday, January 7, 2010 @ 12:27 pm

Are you putting off declaring bankruptcy because you’re afraid you’ll never be able to rent an apartment again? Have you heard horror stories from friends or relatives about how they got turned down for a rental because of their bad credit? Relax. Having a bankruptcy on your credit report won’t prevent you from finding a great place to live.

It’s true that some places – particularly apartment complexes – do check your credit, and do accept or deny your application based on the results. If you have your heart set on living in a place like this, do yourself a favor: call them up beforehand, and ask what their requirements are. Be specific. Ask if they refuse to rent to anyone with a bankruptcy on their record. Find out your credit scores in advance, and ask the apartment manager if your scores sound like they’re in the right range. If not, you’ve just saved yourself the $40-50 application fee. If the manager says, “well, they’re a little low,” offer to bring documentation showing your reliability: pay stubs from work, bank statements, savings accounts, rental history, letters of recommendation. Some apartment complexes will rent to people with lower credit for an additional deposit.

Remember, too, not every apartment owner will check credit. Many individual owners don’t do a credit check. Even those who do are likely to listen to your story about what happened, and why you declared bankruptcy. Be brief but honest; most importantly, explain how your situation has changed. Make sure they understand that the bankruptcy means you owe less (or no) money now, and are therefore better placed to make the rental payments. Again, bring documents to support your story. You can also point out that since a person can’t declare bankruptcy for another seven years, you are actually, in some ways, a better risk than someone who hasn’t declared bankruptcy – if you stop making payments, they could take you to court and you wouldn’t be able to discharge those debts. Be careful with this argument though: although it’s both true and valid, some landlords might consider the fact that you’re bringing up the possibility of not paying rent as a bad sign.

Another suggestion is to look for places to rent that are less strict. Some rentals will advertise: no credit check required. Check out apartments that are offering specials: one month free if you rent by June 1st, for example, or no deposit required. Generally, this indicates a place with low occupancy, and owners who can’t afford to be quite as picky.

Finally, once you get established in a new apartment, do everything you can to maintain the path to financial stability you started by declaring bankruptcy. Take steps to rebuild your credit. Begin to establish a nest egg so that you have some savings in case of emergencies. Most importantly, pay your rent on time every month. If you need to rent another place in the future, having a solid record of making monthly payments could be invaluable.

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Published Tuesday, December 29, 2009 @ 2:59 pm

The theme of making resolutions for the New Year is hard to ignore when it comes to dishing bankruptcy advice and related financial insight. It seems that every year, our resolutions become more important. Most likely, that’s because we feel more mature in age, but not in our financial outlook. Given the way 2009 went for most folks or for those who filed bankruptcy, that’s an easy-to-understand feeling.

So what are you going to do differently this year? Here are some ideas from a recent article in The Wall Street Journal, written by Dave Kansas, as reprinted in the Raleigh News & Observer.

Establish a concrete savings plan
It doesn’t matter how little, but resolve to put some money away with every paycheck. The recession has taught a lot of Americans how important savings can be, especially in the face of unemployment. The feel-good stories about “getting back to basics” and keeping money under the mattress are – for most of us — just that: stories. But it’s much easier than you think to make such a strategy a reality. Whatever the amount—$10, $25 or even $50—the point is to make it a habit, especially if a recent Chapter 7 bankruptcy has given you a fresh start. You may not realize it, but time is an investor’s best strategy. In a few years, you’ll soon realize that interest can actually work for you, not just against you. Put it away and keep it away.

Build an emergency fund
This concept is closely related to your savings plan, but the intent is different. This money, once established, should be considered more liquid. That is, it may not be in place for the long term. Determine how much money you would need, when conserving, for three to five months of bills, groceries and rent or mortgage. Consider this fund a form of insurance against the same type of life emergencies that may have led to your bankruptcy. You can use your savings plan to help build it and once at a comfortable level, leave it alone and use the excess for your savings plan.

Change credit cards, preferably to one that requires full payment each month
Although you may have already done so, consider this a reminder to shred any credit card account that does not offer the absolute best terms available. Be stingy. If you have to resort solely to a debit card, do it. After all, they are accepted anywhere traditional credit cards are taken but they limit the amount you can spend. Also, look into cards that require that the balance be paid in full every month. The comfort in knowing you do not carry any debt is very beneficial and you’ll feel a terrific sense of accomplishment.

Reward yourself
Wait? What happened to staycations and storing money under the mattress?

Look, being conservative with your money is always a great idea—but remember why we have money. To do stuff and to enjoy life! It’s okay to reward yourself within reason and in fact, personal entertainment should be a line item in your monthly budget. You need to live. Plus, keeping yourself bottled up under the confines of an over-zealous savings strategy will only lead to more frustration and an inability to ever spend without regret. Your savings plan should include things like the occasional weekend trip, nights out or tickets to the big game. Don’t beat yourself up about every purchase, especially if you have worked hard for it.  Spend some of your hard-earned money as a reward for saving alot of it.

Take every advantage your fresh start in bankruptcy has given you. 2010 is a new year, the year you’ll begin to bounce back from bankruptcy.  Make 2010 a ten out of ten.

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Published Wednesday, December 9, 2009 @ 12:28 pm

Filing bankruptcy, among other things, is about getting a new start. Few things can match the sense of relief that follows even the first phone call to our office, let alone the day you know for sure that your bills are gone forever.

For some, starting over may mean leaving behind everything that contributed to your old spending habits, the material goods, the car, even the house, that led you deep into the financial abyss. If that sounds like you, maybe it’s worthwhile to consider a relocation, not just a downsize.

Know that moving is expensive. So yes, you’ll have to save money. That takes time, and yes, more money. But the most important question is, of course, where to move? Thankfully, the folks at Forbes.com have assembled us a list of places that get the Best Bang-For-The-Buck when relocating. Here is how they broke it down:

Forbes examined markets that at one time were considered second to the most popular regions during the boom times. For example, at one time, homes in Orlando and Las Vegas were flying off the lots. Developers went nuts and inventory was quite high. Now? Well, not so much. Home values are depressed and the foreclosure rates are at the top of the list.

Home prices are down 29 percent from 2006, making areas that never really experienced the boom that much more affordable. And, with a solid employment base, consisting of families who have roots in the area, as opposed to transient corporate workers who ship out every couple of years, places like Des Moines, IA and McAllen, TX are nice places for those looking to get a solid re-start.

Don’t want to move that far? Try Greenville, SC or Chattanooga, TN, which made the list at numbers 20 and 8, respectively. Because the boom avoided these areas for the most part, home values stayed relatively even, as did jobs.

If you must know (why else are you reading this post), Omaha, NE was at the top of the list. Forbes researched the 100 largest MSAs (Metropolitan Statistical Area), examining foreclosures as a percentages of home prices; apartment vacancy rates; unemployment figures; three-year job forecast; three-year home price forecast; housing affordability; median real estate taxes and commuting time.

Here is the Top 25 cities that offer you the Most Bang-For-The-Buck:

1. Omaha-Council Bluffs, NE
2. Little Rock-North Little Rock-Conway, AR
3. Jackson, MS
4. Des Moines-West Des Moines, IA
5. Augusta-Richmond County, GA-SC
6. Wichita, KS
7. McAllen-Edinburg-Mission, TX
8. Chattanooga, TN-GA
9. Colorado Springs, CO
10. Ogden-Clearfield, UT
11. Scranton–Wilkes-Barre, PA
12. Columbia, SC
13. Harrisburg-Carlisle, PA
14. Provo-Orem, UT
15. Syracuse, NY
16. Baton Rouge, LA
17. Buffalo-Niagara Falls, NY
18. Palm Bay-Melbourne-Titusville, FL
19. Tulsa, OK
20. Greenville-Mauldin-Easley, SC
21. Raleigh-Cary, NC
22. Pittsburgh, PA
23. Knoxville, TN
24. Louisville-Jefferson County, KY-IN
25. Youngstown-Warren-Boardman, OH-PA

You may note that a number of the cities are from regions away from the coast, as those regions tend to experience serious market growth in a fast-moving economy. You may notice too that there is not one California city in the Top 25. In fact, there is only one in the Top 50.

Cities in the mid-west, west and industrial regions of the east tend to hold a particular attraction to folks looking to find affordable homes and jobs. Many places in the west offer outstanding recreation and service industry jobs as well cities that cater to the younger, live-life-with-less crowd that is continuing to grow in the midst of a Wall Street-driven recession.

Whereever your final destination, remember that http://www.billsbills.com/bankruptcy-blog/ is always as close as your Web browser.

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Published Tuesday, December 1, 2009 @ 11:34 pm

In an era of extreme homeowner hardship and surging unemployment, most people worry that debt-free living through bankruptcy will leave them without a credit card in an uncertain world where plastic is widely-accepted. Fortunately, filing for bankruptcy doesn’t have to mean losing your credit cards—or the opportunity to access new ones.

While you’re required to list all outstanding debts owed when filing for bankruptcy, including credit card debt, accounts with no balance can be omitted and kept. Additionally, for those cards with balances, a majority of credit card providers allow you to hold on to their credit card for use after bankruptcy if you agree to reaffirm the card balance and enter into a new agreement after filing. This “Reaffirmation Agreement” documents your willingness to continue to be responsible for this debt after the bankruptcy is discharged—allowing for a little extra insurance for unexpected expenses in the years to come. While reaffirmation may be an option, you should really take full advantage of your bankruptcy discharge by getting rid of all of your debts. What sense does it make to file for bankruptcy, but remain on the hook for some of the debt?

Even if your credit cards don’t follow you after your bankruptcy filing, it doesn’t mean you remain credit-less. While you may not qualify for certain loans following a bankruptcy, secured credit cards (otherwise known as “second chance cards”) are still available to reestablish and rebuild your credit by continually proving, and improving, your credit score even before your bankruptcy falls from your credit report.

Even better, secured credits cards are low risk. When you receive a secured card, an upfront deposit is required creating a sort of savings account for that card. The credit limit of your card is often very low— typically $500 or less to start—constituting the amount of money in your card’s account. As a result, this type of card promotes healthy spending practices and prevents missed payments, an inability to easily pay off the card’s balance, and many of the other financial woes sometimes associated with unsecured cards. As such, a secured card’s limit can actually rise with your credit score or after several months of on time payments—thereby rebuilding your credit, and your credit confidence, after bankruptcy.

To begin making a secured credit card work for you following bankruptcy, it’s always a good idea to read the fine print. Look for a card with no application charges. Also, seek a reasonable annual fee as these automatic expenses don’t count toward your credit score and might otherwise easily eat away at a small credit limit. Similarly, verify that your secured credit card reports to the three major credit bureaus, assuring that there’s a clear record of your positive credit usage—even if it is credit created with your own money.

Finally, depending on the programs available at your bank, credit union or other secured credit provider, you are able to inquire as to whether your card can be converted to a more familiar, higher limit unsecured card after you’ve been on time with your secured payments for a year or more. The result is a new credit-rich card in your wallet and, this time around, months of healthy spending habits under your belt.

For more information on “The Truth About Bankruptcy,” click here to visit The Law Offices of John T. Orcutt online.

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Published Tuesday, October 20, 2009 @ 10:15 pm

Stomach turns? Sleepless nights? Ah, the memories of your time before filing bankruptcy. Not much fun, were they?

Despite all the things that your robust credit limits may have provided you (it’s okay to admit it), somehow you would have given it all back to stop the phone from ringing and guilt from weighing you down. And while that is what bankruptcy did for you, the numbers show that a number of people often have to file a second time. Don’t do that to yourself.

To pull yourself away from the lifestyle habits that contributed to your first go-around with Chapter 7, start a new life by determining what is most important to you. Make a small list of the things you would do if you had an hour of free time. How about time with friends? Get back to the gym? Maybe start mountain biking again. Whatever is, do it.

Keep your list handy and start small. Don’t try to entrench yourself into a lost hobby right away or it will remain lost. Schedule a time with friends or a local group once a week with a similar interest, whether its running, walking or even rock climbing. The group dynamic will encourage you to participate.

Fitness has proven to be a fantastic stress reliever. If you still have the mountain bike collecting dust in the garage behind the water heater, get it out and get on the trail. Cycling has become a tremendously popular form of exercise and there are clubs in every major city, just poke around on the Internet. The outdoors, challenge and even the occasional tumble down an embankment will do a lot to put your mind in another place.

What to do with all that money you no longer have to pay to unsecured creditors? Consider joining a gym. You would be very surprised at how cheap many gyms are today. Market competition has demanded many fitness centers charge as little as $9.00 a month. Best of all, many of them do not require any sort of contract, which means your credit will not come into play upon joining. Once there, don’t just jump on the treadmill or recumbent bike–pick up some weights. Look around online for new exercises that push body weight mechanics and combine aerobic activity so your muscles are challenged each and every time. You’ll come out of each workout feeling great about yourself and full of the endorphins that incite happiness and confidence. Little by little, you will discover a new body–and state of mind–that you didn’t realize was there.

On the psychological level, exercise simply makes you forget what it was you were so worried about. A long hike in the woods or climb in the rock gym makes your focus switch to the physical nature of your situation, whether it be one grab left on your first 5.10 climb or a steep scramble up a local ridge line. Experts have found that these brief moments of concentration on physical challenges can quickly clear your mind and help your body relax in order to overcome it. In that process, the stress of the day is what gets left behind.

Beating the stress of financial worries is no easy task. Countless books have been written and studies published that discuss the harm stress can have on our physical make-up. Muscle aches, joint pain and serious health issues are often traced back to personal stress. Exercise literally pushes it out of your system, gives you a sense of personal accomplishment and helps you build a new lifestyle.

The first step to releasing the stress of debt is to talk to an experienced bankruptcy attorney. In North Carolina, contact the Law Offices of John T. Orcutt to set up a free and confidential debt consultation. Call 1-800-899-1414 or visit www.billsbills.com for more information.

See you on the trail!

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Published Sunday, October 18, 2009 @ 1:03 pm

Apart from the more typical fraudulent charges and billing errors, a common situation leading to credit disputes concerns purchase protection. This comes into play when you make a big ticket purchase from a merchant, charge it to your credit card, and then receive the good…only to discover that it is defective. Under federal law, you will be able to dispute the charge if the purchase was for more than $50 and was made within 100 miles of your home. Even if you don’t meet one or both of these requirements, it’s worth a try to dispute because not everyone will insist on enforcing the bar, especially if you made the purchase online.

The first step you should take is to contact the merchant and attempt to resolve the dispute directly. The merchant may well accept your complaint and work with you to reach a solution.  If you’re not getting anywhere by talking, your next step is to put your complaint in writing and send it to the merchant by certified mail. Keep a copy of this letter, because you may need it later to send to the credit card company if it becomes necessary to file a dispute. The letter should be brief, to the point, and contain all relevant details, including a description of the item and why it is defective. If the written complaint gets you nowhere with the merchant, it’s time to turn to the card issuer.

Within  60 days of receiving the bill with the disputed charge, write a letter to the credit card company explaining the situation and why you refuse the charge. Include relevant information such as the date of the bill, where the charge appeared, the transaction number, amount and date of the charge, and descriptions of the item and alleged defect. This letter should be mailed to the billing department of the card company. If you’re unsure about where to send the letter, call their card issuer’s customer service line and request the appropriate address to submit your dispute.

Once they have the complaint, the credit card issuer may contact the merchant to hear their side of the story, and then make a decision one way or the other. If they decide for you, happy ending, you get your money back. Many card companies will also provisionally remove the charge from your account while the dispute is being resolved. Be aware, however, that sometimes the credit card company will side with the merchant, in which case you will have to pay for the purchase, including finance charges. In order to present your case in the best light, file the complaint promptly and carefully.

As you can see, credit cards can be useful and can provide some level of purchase protection. But if you’re weighed down by big bills and maxed out credit cards, more credit is not the answer. Contact a bankruptcy attorney today to find out how to get a fresh start.

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Published Saturday, September 26, 2009 @ 6:17 pm

One of the greatest benefits of filing for bankruptcy protection is that it allows struggling homeowners a second chance to catch up on missed mortgage payments. For many people, the fear of losing a beloved family home is one of the most stressful parts of their struggle with debt. But is your house really worth saving?

If you find yourself living in an “upside down house,”  it may be worthwhile to consider simply letting the house go. “Upside down” refers to a property where you owe more money than the house is worth. Back when the housing  market was still booming, this situation was almost unthinkable, but now that the bubble has burst, short selling―selling a home for less than what is owed―is all too common. Unfortunately, a short sale leads to all kinds of nasty repercussions: Unless your mortgage lender agrees otherwise, you will still be responsible for the difference between the sale price and amount owed. Second, even if your lender agrees to forgive the debt, you’ll still be hit with the tax consequences.

If you’re a homeowner and considering bankruptcy, now is the time to take an objective look at the big financial picture and make some tough choices. Your equity situation is a great place to start this assessment. If you don’t have any equity in the home, holding on to that upside down house can’t even be justified on the basis that home ownership is a good investment. Just a few years ago a house was a sterling investment―but if you’re continuing to sink in negative equity, you don’t own a good investment, just a bunch of debt. And if you are living in an upside down house, how bad is your situation? In other words, how much more money do you owe the bank than the house is worth? If the difference is only a few thousand dollars, it may be OK to hold on to the house if you can really afford the payments. But if the difference is huge, you may want to consider the idea of surrendering the property in bankruptcy.

Second, take a look at your budget. Why did you get behind on your payments? Were you always struggling to make the payments, always one emergency away from getting behind? If getting rid of your credit card debt doesn’t free up enough money to comfortably make the mortgage payment, bankruptcy won’t help you save the home in the long term. If, on the other hand, you got behind because of a temporary drop in income that has since rebounded, bankruptcy can get you back on track with your mortgage and put your in a better financial position by dumping your unsecured debt.

The costs associated with home ownership go beyond the monthly mortgage payments. Can you afford property taxes? Your homeowner’s insurance? Does the house require a lot of maintenance? What are your utility payments like? These are all good questions to consider as you assess whether it makes sense to hold on to your home. Another thing to keep in mind is the structure of the loan. If you were one of the many unfortunate borrowers who signed on to an adjustable rate or interest only loan, your loan terms will never allow you to get ahead.

The good news is that the depressed housing market means that a lot of places that can’t sell are being offered for rent. Renting can be a good solution for someone seeking to rebuild their financial health, especially in the short term. If you are trying to keep your kids at the same school or are reluctant to leave the comforts of a familiar neighborhood, you may be able to find a good rental in the same area as your house.

Make sure to ask your bankruptcy attorney for advice on this issue. Letting a foreclosure proceed unchecked is not a good way of dealing with the situation. If the property sells for less than the outstanding loan balance, you will still owe the difference.. Surrendering the home in bankruptcy shields you by eliminating any personal liability after the foreclosure sale. If you are facing foreclosure now, contact a bankruptcy attorney immediately to ensure that you remain in control. Your attorney can help you assess your financial outlook rationally and help you make the right decision.

From: The Law Offices of John T. Orcutt. We always offer a free initial one on one consultation. Call today to set up your appointment. If you are in North Carolina, call 1-800-899-1414, or visit www.billsbills.com to fill out our free and confidential debt questionnaire.

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Published Thursday, September 3, 2009 @ 9:43 am

The economy is so grim right now it’s hard to see the silver lining, but the good news about markets is that they rarely stand still forever. Even now, economists are slowly and cautiously becoming more optimistic about the situation, and consumers are gradually gaining back confidence. The housing market, for example, posted a quarterly rise in prices for the first time in three years, which may indicate a stirring of recovery. Still, there are a lot of homes out there not worth half what they were recently, and new construction has ground to a halt for the time being. Is there a silver lining in this one for you?

Well, there may be if you are not a homeowner and not looking to become one immediately. With so many properties sitting empty while the market waits for buyers to return, people who are not homeowners can enjoy a renter’s market. Suddenly there are many options for housing–nicer places at must lower prices. In some areas of the country, it is actually cheaper to rent than to buy at the moment.

If you are considering or already preparing to file for bankruptcy protection, you may be worried about your ability to rent a home, since so many landlord applications now require a credit check and/or ask about past bankruptcies. Don’t let such questions dissuade you from pursuing a rental you really like. Because this is a renter’s market, landlords may soften some of these requirements. Most landlords will be more concerned with your payment history with past landlords than whatever happened with your credit cards. If you have a good history with someone, ask him if you can use his name for a reference and offer to provide it for the new landlord when you apply. Other times you may be able to bargain with the landlord by offering to pay a slightly larger security deposit or providing other assurances of payment. Remember that as much as you need a place to live, landlords need tenants to make money from their real estate investments―or in this market, just to minimize losses!

Home ownership has some real advantages, and many people feel that it’s a waste of money to pay rent that will never translate to equity. However, home ownership comes with its own host of troubles, and renting can be a good solution, even if just in the short term. Home ownership is a big step, and you may want to allow yourself some breathing room (and an opportunity to rebuild your credit) before taking the plunge. If so, you might as well take advantage of a renter’s market!

If you already own a home, but are having trouble with the monthly payments, bankruptcy is a great option to get caught up on the missed payments. Unfortunately, some people wait until it’s too late to take advantage of these protections, and by the time they accept that bankruptcy is their best option, it may be too late for bankruptcy to help. That’s why it’s important to contact a bankruptcy attorney early in the process, before your finances are beyond repair. If you have conceded that it not financially feasible to keep your home, bankruptcy acts as a shelter from the after effects of a foreclosure, such as tax liability and deficiency judgments. Further, if foreclosure is imminent, a bankruptcy will stop the foreclosure from proceeding, even if you intend to surrender the property in the foreclosure. This strategy can buy your family some time to transition to a new living arrangement.

These are strange days for homeowners and those considering home ownership. If you have doubts about your future financial viability, it may be best to wait out the recession before plunging into the real estate market. If your income is already stretched to the max by debt payments, consider speaking with a bankruptcy attorney. A properly planned bankruptcy can put you in the best possible position to rebuild your damaged credit and pursue home ownership in the future.

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Published Wednesday, August 26, 2009 @ 10:04 pm

A successful bankruptcy is as much about post-bankruptcy decision making as it is about making the initial decision to file. A lot needs to go into each spending choice, every credit consideration and your personal financial management goals.

Multiple bankruptcies are common. However, if you feel you may be getting close to having to file again and the reason is not the direct result of an uncontrollable emergency, there may be some broader, underlying personal issues that were not addressed the first time around. At the Law Offices of John T. Orcutt, we take pride in preparing our clients for a life outside of bankruptcy as well. While we very much appreciate your business, we hope we only have to help you file one time.

We’ve compiled in this post a few strategies to help keep you on track after you are back on your feet:

• Pay bills on time. Sounds easy, right? Hardly. For even those people who have never even sniffed a financial difficulty, staying on top of a pile of monthly bills takes very sound organization skills. Like most people who begin to have trouble making ends meet, dates become critical. All kinds of dates: due dates, late charge dates, power bill dates, mortgage payment dates and so on, all start to come together into a menagerie of calendar markings and PDA notifications. One way to ensure everything gets paid on time is to use a completely separate calendar for bill dates. And, mark each one due five days before their actual due date. This way, you can avoid hundreds of annual dollars in late fees and prevent nasty marks on your credit report. Be careful with online bill pay services as well. While they offer convenience and scheduling, make doubly sure they are paying on time and that there isn’t some sort of delay that leaves your money dangling in cyberspace.
• Choose expenses carefully. This involves reminding yourself daily about the things you really need. Lifestyle items are for the “old you.” Remember, you don’t need what your co-worker or neighbor has. This is also about paying for things in cash and keeping the new credit card for emergencies, like car repairs or house damage. The reward from knowing you saved up and purchased something cleanly is well worth the wait. Try it and see.
• Balance your checkbook. Seems like another obvious tip, doesn’t it? You would be surprised. Today, banks are tacking on very high fees for bounced checks, overdue settlements of overdrawn accounts and service charges. Not only can you not afford to know exactly what is in your checking account, it’s a poor financial habit to get into. With simple addition and subtraction, you can be sure of how much money is coming in and going out every month. This helps in budgeting and uncovers places where you can save each month. Pay attention to the balance daily as well. Every morning, use the Internet or automated phone lines to get an update on your account. Even if you think you know, it’s always smart to really know.
• Handle setbacks as soon as they occur. Don’t let a disputed expense fester in your monthly balance, where it can gain interest or get lost in the administrative shuffle. And don’t take every little mistake you make as a sign of collapse or failure. Address every question or complication head on and be assertive.

Your financial solvency is a key part of your well-being. Try to stay on top of your finances after bankruptcy and truly take advantage of your fresh start.

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Published Sunday, August 16, 2009 @ 6:41 pm

Fear of foreclosure is certainly pushing many families into bankruptcy. Although there are now many programs, both at the state and federal level, to help homeowners avoid foreclosure, if your lender is unwilling to work with you, bankruptcy may be the only way you can stay in your home.

Unfortunately, if you don’t choose to seek help through a bankruptcy attorney or your lender, there are plenty of criminal actors out there that would be more than happy to assist in escaping your financial woes.

With the rise in bankruptcies and foreclosures across America, thieves are growing more bold in their effort to take whatever belongings, and dignity, from those facing the most challenging of economic circumstances. Perhaps the most rampant perpetrators are fraudulent mortgage modification companies, who take thousands upfront from unsuspecting homeowners, only to disappear into thin air. Don’t ever agree to an upfront fee for a mortgage modification, and don’t ever agree to make your mortgage payments to a third party who promises to forward your payments directly to your lender. If you are working with a legitimate mortgage modification company, stay involved in the process. It’s important to maintain constant contact with your mortgage lender and your loan modification company.

Bogus loan mod companies aren’t the only criminals taking advantage of desperate homeowners. Grifters are moving into what appears to be a more legitimate method of theft: buying houses.

Targeting those in high-foreclosure zip codes, representatives from shell companies are offering to buy houses from those in dire straights. They sell the fear of foreclosure and bankruptcy and offer to make them a clean, easy deal and a quick sale. Heck, they even hand people money for the house. Real money! So it can’t be a scam, right?

First off, they only give you a very small amount of money, regardless of the equity in the home or its market value. Since you’re desperate, it’s a fair number, right? The plan calls for the company to buy the home and rent it, allowing you to move on with your life. However, the rent payments they collect never make it to the mortgage company. In fact, the sale never gets recorded, there’s no legal closing and you are still responsible for the mortgage. By the time it’s all sorted out, they’ve collected months of rent, from most likely planted tenants, and moved on. The hand-written signs on freeway exits and the local Craigslist’s posts that offer to buy and close fast are nine times out of ten the mark of illegal activity.

State regulators believe that there are close to 50 “fast home buy” operations currently working in North Carolina, some of which are perfectly legal with solid reputations. But those companies are easy to recognize. They have sound records with the Better Business Bureau, prominent advertising and established offices. Keep in mind though, in the majority of cases, a fast sale is a bad idea and a short sale even worse. A short sale requires your lender to accept less than the outstanding loan amount. Many times the lender won’t really forgive the deficiency, requiring you to sign a promissory note covering the difference. The tax implications of a short sale can be substantial as well. Any time a creditor agrees to accept less than what is owed, they will report the deficiency as taxable income to the IRS. Not only did you lose your home, but now you owe taxes.

Don’t fall prey to a foreclosure rescue scam just because you were afraid to consider bankruptcy. If you’re facing a foreclosure and your lender is not working with you, a bankruptcy attorney is your best ally. Bankruptcy can keep your family in your home, and if you truly can’t afford the home, surrendering it in a bankruptcy shields you from any remaining personal liability on the loan. Don’t wait another day to call. In North Carolina, contact the Law Offices of John T. Orcutt for a free consultation. 1-800-899-1414.

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Published Saturday, August 15, 2009 @ 1:45 pm

Debit cards are one of the many spending tools that can be good for a person rebuilding after bankruptcy. For the most part, anything that is backed directly by actual cash is the best way to ensure that you don’t get too deep again shortly after things are back in order.

There are some drawbacks to using a debit card though. Mainly, it won’t do much to re-establish your credit because it does not rely on credit and therefore won’t have any affect on your credit score. Debit cards are backed by a checking account with actual cash that gets debited according to what you spend. Therefore, a number of folks in this position choose to combine a debit card with a secured credit card to practice safe spending and proactive credit building.

Since debit card usage is not reported to a credit bureau, they are best used for everyday items, like gas and shopping. This way, you can measure accurately what you are spending on both and how to reduce those expenses if needed.

Another issue with debit cards is that if they are stolen, most likely a thief is accessing the money you need for those everyday items just mentioned. For a lot of people, all they have is what’s in their checking accounts, so if that goes missing, things can turn ugly quickly.

Thankfully, a number of banks today have recognized that risk, as it is becoming a common facet of identity theft, and typically won’t hold you responsible if you are able to quickly report that its missing. Be diligent though, don’t sit around waiting for someone to use it so you can track them down via an online account. Call the bank right away, even if five minutes later you find it under a couch cushion.

Debit cards can be tied to checking accounts that have automatic overdraft protection so that if you go over your limit, you can be protected to a certain amount. However, if you are just coming out of bankruptcy, that protection may come with a fee and sometimes is tied to a line of credit that you may not be eligible for until your credit rating improves. Be very clear with your bank in regard to this rule because overdraft fees are becoming more unreasonable every day and can really do some damage if allowed to pile up.

Because of the financial industry collapse, banks are using smaller fess, like ATM transaction fees and teller access costs, to bombard their bottom line with countless surprise line items. Ask if your debit card can be backed by your savings account, if you have one. This will ensure that any money you accidentally spend will still be yours and the bank won’t ding you as much for accessing it.

Debit cards are indeed useful and can help you monitor your funds. However, if the point is to rebuild your credit after a bankruptcy, combine the use of a debit card with some other form of credit.

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Published Tuesday, August 11, 2009 @ 6:00 pm

Believe it or not, there are some situations when credit cards can be a benefit. They are often the only option when making travel reservations, and can come in handy in the event of genuine emergencies. A credit card can also help you build good credit, or rebuild credit after bankruptcy.

Yep, so that’s about four reasons. The reasons NOT to use credit can fill a book, but here are just a few situations in which using plastic seems like a good idea, but you’re much better off just saying no!

Department store credit accounts: notoriously high interest rates are just one great reason to avoid department store credit accounts. But did you know that sometimes proprietary credit accounts from merchandisers allow the seller to take an interest in the things you buy on credit? This means that should you find yourself in a financial emergency down the line and unable to repay them, they could be entitled to take your stove or washing machine back. North Carolina law offers some protection against these disguised secured debts, but it’s best to just to avoid them altogether

Paying your taxes with your credit card: Taxes are not necessarily dischargeable in bankruptcy the way unsecured debt is…and your credit card debt won’t be either if you used the card for non-dischargeable debt! This will apply to other non-dischargeable debt as well, so be careful about putting payments to , for example, student loans, on your charge accounts. But note that only the part of the credit card debt you use to pay non-dischargeable debt will itself be non-dischargeable.

Balance transfers: A classic  marketing strategy of the credit card industry is offering lower interest rates on balance transfers. They way they sell this nonsense is to make you believe that it will be cheaper for you in the long run. But the situation isn’t as simple as they’d like you to believe. If you do a balance transfer, you’re taking on new debt. Unless you’re committed to shutting down the first account for good, you’re exposing yourself to the temptation of more debt. Many people believe they will be able to play this game successfully, and the credit card industry has made billions by playing on this belief.

A balance transfer could also force you to delay filing for bankruptcy, because if you do one just prior to filing, it may be viewed as a preferential transfer.

Big purchases right before bankruptcy: Speaking of charging up just prior to bankruptcy, you definitely want to avoid anything that could look like fraud. If the credit card company can convince the court that you made purchases on the card with the intention of filing for bankruptcy, the debt may become non-dischargeable, and you may be putting your whole filing at risk.

Living off credit to avoid filing for bankruptcy: This is an absolutely TERRIBLE idea. All you’re doing is creating bigger and bigger problems for yourself. If your situation cannot be managed without credit–if you find yourself taking out credit to pay for prior credit, it’s past time for you to consider bankruptcy as a lasting solution to your financial problems.

In North Carolina, call the Law Offices of John T. Orcutt to set up a free initial debt consultation. Convenient office locations in Raleigh, Durham, Fayetteville and Wilson.

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Published Monday, August 3, 2009 @ 10:45 pm

Marriage is a partnership, and it works much better with each partner pulling his or her own weight. To avoid problems down the line, it’s a good idea for each partner to establish and maintain a separate credit identity. As a matter of fact, that is how the law will see it in all but the nine community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.) This means that if your spouse takes on a financial responsibility without you, you will not be legally liable for it, and vice versa. But it also means that good financial behavior on the part of your spouse won’t necessarily reflect on your credit report, even if you share in the actual payments. Here are a few tips to help you create and maintain your personal credit identity, apart from your spouse’s.

• Keep separate checking accounts. When people get married, they often choose to combine their checking accounts into one account both can access. This is certainly easier, logistically speaking, for maintaining a household. However, this exposes you to trouble if your spouse should turn out to have less than great habits with ATM withdrawals and checks. A better idea is to keep separate accounts, and also open a joint account for household use.

• Don’t take out joint credit card accounts or personal loans. This is another step many people take when they get married, but it’s a bad idea for some of the same reasons separate checking accounts are a bad idea. Besides, remember that in a bankruptcy filing, credit card debt can be fully discharged, and with separate credit card accounts, one spouse can file for bankruptcy without involving the other. In states which recognize tenancy by the entirety or similar forms of marital ownership, a judgment obtained by a creditor against one spouse will not become a lien against jointly owned property. However, if the credit card is a joint one, a judgment will attach to the property, possibly enabling the creditor to sell your home by sheriff’s execution sale! Talk to your bankruptcy attorney to determine how your spouse’s assets will be affected during bankruptcy.

• Understand how creditors are permitted to consider your spouse’s credit. When applying for credit in the non-community property states, a lender is not allowed to make a determination based on your marital status. Thus, he cannot ask to see your spouse’s information, unless her income will be  a basis for repayment of the debt.

• Make sure joint accounts with good records are reported on both credit reports. If you’ve been building good credit together on joint accounts like your mortgage or car loan, you want to make sure that the information is being reported under both names. If you find out it isn’t, you can write to the creditor and request that they report to the credit bureaus about both of you.

With tightening credit markets, having a separate credit identity is crucial to maintaining your family’s financial viability. If you or your spouse are overwhelmed with debt, talk to a bankruptcy attorney today to find out how a properly planned bankruptcy can help your marriage and your finances.

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Published Monday, July 20, 2009 @ 8:35 am

It started about 15 years ago with the promise of an untold number of deposits into your bank account, supposedly from Bill Gates, for just sending an e-mail. Little did we know that with the click of the “forward” button, we pushed the proverbial SPAM boulder over the crest and created a perpetual avalanche of dangerous, credit-crushing e-mail based nonsense.

E-mail based crime is responsible for a great deal of debt for people that have done nothing more than react to a message from a friend. And once we identify ourselves formally or agree to a “balance transfer” offer, it is quite often too late to go back. Very slick and apparently authentic e-mails can come from your bank, your current credit card company or a “friendly” debt counselor. The odds are very good that if the message made it into your inbox, it does not contain any sort of overly-aggressive virus that will shut down the neighborhood grid just because you looked at it curiously, so don’t be afraid about reading the content of message you are unsure about to learn more about it. In fact, after scanning only a couple of lines, you should be able to tell right away how much of your money its sender is trying to steal. (Usually, as much as they possibly can.)

Remember that no credit card company or legitimate bank will ask you for personal information or account number verification via e-mail. If you are still unsure, call the company and inquire about the e-mail. Do not, however, call any number that is included in the e-mail. Yes, these scam artists are sophisticated enough to set up bogus phone numbers. You may literally be calling an extra line in their mother’s basement established to sound just friendly enough to help you verify your credit card number and it’s three-digit verification code.

Most bank and credit card company Web sites contain pages of information about privacy and might also have examples of bogus e-mails just like the one you are concerned about.

Once you’ve determined that the message is an attempt at theft, don’t respond to it. Regardless of how angry you are or how clever you think your insult, responding only verifies your e-mail address as real, and that means it goes on another list for another scam. Simply mark the message as SPAM using the appropriate software and move on. Plus, you are not going to tell them anything they have not heard before.

Watch for e-mails that appear to be from people with very common names that sound like someone you know. This technique farms the names in your inbox and creates conglomerate sender identities. For example, your friends Sara Jones and Matt Smith can become Sara Smith from Jones National Bank touting a new, lower rate for all balance transfers of more than $5,000. Wow, thanks for the update Sara!

Basically, good e-mail management should be considered a major component of a sound financial management strategy. Exercise extreme caution whenever an email or website asks for personal information, and remember: If it sounds too good to be true, it probably is.

From the Law Offices of John T. Orcutt. Call today to set up your free initial debt consultation. 1-800-899-1414.

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Published Sunday, July 19, 2009 @ 5:13 pm

There are many reasons for filing bankruptcy. From sudden medical expenses to layoffs, We already know medical bills are a substantial reason people file and that even smart consumers have faced serious challenges as a result of uncertain mortgages.

Regardless of your reasons, life after bankruptcy offers you the chance to start in a new direction. So here are some important tips to help you become an economically-conscience consumer.

• Like buying shoes, don’t purchase cable channels unless they are on sale or part of a long-term promotion. Remember that cable companies rely on customers forgetting about the incentive’s termination to lock you into paying the increased rates. Mark your calendar on the day it ends and cancel. More than likely, they’ll continue to offer it to you. Don’t forget about the pay-per-view channels, which allow you to buy only one show or movie at a time.
• Like going to movies? So does most of America, which explains the $100 million opening weekends for just about any half-way decent film. Before even sitting down in your seat, provided a contingent of un-supervised pre-teens haven’t “saved” them for the rest of their sordid lot, it’s easy to spend $25.00 on the ticket and a trough of popcorn. You can see the same thing everyone else does for $5.50 by going on a weekend afternoon and not buying any of what’s lurking behind the counter. Not only will you avoid the calories, matinees are also the best way to avoid the swarms of irksome youth that pay more attention to the next incoming text message than what’s happening on the screen.
• Try to avoid any sort of club that charges a monthly a fee unless you can reasonably justify that your use of its service will cover the fee. Fitness clubs, for example, literally bank on the fact that members will not use the facility. Most gym members cease attendance after six weeks. Instead, check with your employer about wellness discounts or reimbursements, as many companies today offer these incentives to promote employee health (and to avoid paying medical claims). If fitness is important to you, then find a gym that does not require long-term contracts. A good deal of Web sites charge monthly fees as well. Truthfully, there is very little content on the Internet that will not become public in very little time. Premium memberships and site subscriptions are rarely worth it. This goes for magazines, too. Use their respective Web sites for the articles.
• People find a surprising amount of money to be saved by curbing random food purchases. Snacks while getting gas, vending machine walk-bys and quick pit stops can really add up. Prepackaged food is extremely expensive by volume and rarely healthy. Avoid it whenever possible. Try to remind yourself that you paid for the food that’s at home. Just because it’s in your kitchen doesn’t mean it was free. Don’t waste your money or jeopardize your health.

This brief list is only a random selection of ways to save money. Remember though, every little bit helps, especially when you are trying to rebuild your financial wherewithal. There are countless ways to cut back and still live exactly the type of lifestyle that suits you and your family. Give it a shot.

From the Law Offices of John T. Orcutt. Convenient offices in Raleigh, Durham, Fayetteville and Wilson. Call 1-800-899-1414 today to set up your free initial consultation.

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Published Sunday, July 19, 2009 @ 4:08 pm

Gambling, not at all unlike compulsive spending in department stores, can often lead to serious financial pitfalls. Despite the prevalence of gambling addictions in America, debts incurred by too much betting were at one time non-dischargeable in bankruptcy. While the specifics of dischargeability with any type of debt should be explored with a bankruptcy attorney, it is important for you to know that if you count gambling losses as one of your reasons for bankruptcy, the odds are in your favor that it can be discharged.

Bankruptcy research suggests that close to 10 percent of all filings are connected to gambling. If you are already considered a “compulsive” gambler, then you may be one of the 20 percent who eventually file bankruptcy. If that is the case, know that the bankruptcy court is going to view your gambling debts much like it does other debts. That is, was the debt incurred with the intent to repay? For a compulsive gambler, that question is up in the air and where the answer lands depends heavily on how the money to gamble was obtained.

Not surprisingly, credit cards play a role in gambling debt. For those who walk in to a casino with a wallet full of positive cash and leave with it empty, no real debts have been incurred. The problem arises when a person uses a credit card for a cash advance. As you might imagine, the majority of bankruptcy lawsuits relative to gambling involve credit card companies.

Again, like most debt, a judge is going to use other facets of your financial history to determine your intention to repay the credit card company for the cash advance. Prior to filing, your attorney will want to know everything about your gambling habits, including how much of your debt was gambling related, how recent your gambling-related debt was incurred, and whether you reasonably believed you would be able to pay back your creditors. If there is an objection to your bankruptcy discharge, the court will thoroughly examine your gambling history to determine whether you acted with an intent to defraud your creditors.

Las Vegas may still be the world’s gambling mecca but one does not need to go far to find a casino. Whether on a riverboat, Indian reservation or just across our northern border, the opportunities to double down are plentiful. Thus, gambling losses are a common cause of bankruptcy.

Again, it’s important to understand that like the eligibility for discharge of other kinds of debt, a bankruptcy judge is going to weigh a number of factors in your financial history. First and foremost, if gambling is the primary driver of your reason for bankruptcy, it’s possible you have a problem. Your first stop then, should be getting help to put the brakes on your gambling.

Next, contact a good bankruptcy attorney. In North Carolina, call the Law Offices of John T. Orcutt at 1-800-899-1414. We can help you put into perspective your gambling debts and get you on the road to a more healthy financial future. You can bet on it.

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Published Saturday, July 18, 2009 @ 3:56 pm

As we’ve discussed here several times, there is a very good chance you can keep your home when filing bankruptcy. However, those of you who rent may find reason to worry about that ubiquitous “credit check” that shows up on every new rental application.

Whether a faceless, multi-billion dollar property management company or a private duplex owner down the street, landlords need to know they can collect rent. It’s normal to be nervous about the process. But just like all other sorts of transactions and business relationships, your best first step is to be open about your financial history.

When seeking an apartment after bankruptcy, the smoothest route may be to seek out a private landlord. In other words, a local owner who is either in the apartment business full-time with a small operation or who just has a couple of places around the city. One of the disadvantages inherent to many Class-A apartment communities operated by national real estate firms is that they may not have flexibility in negotiating lease terms. While an amenity-rich, intricately landscaped apartment community is an attractive option, the leasing representatives are limited in their ability to negotiate. Even if you can afford the rent, the company may have a credit report policy that is simply too stringent.

If you run in to this, ask to see a manager. Not unlike a car dealership, the “salesman” rarely makes the final decision. It is worth your time to be face-to-face with someone with decision-making power for the benefit of learning to better vocalize your financial history and demonstrate that paying your bills is a serious priority. Clearly, a good job and proven steps toward a new credit history will help your case.

That being said, higher-end apartment homes come with a cost. How else are they going to pay for the pool, theater, gym, basketball courts and arborists? Ask yourself, “Will I even use all these amenities?” If you can save the money for a gym membership by working out at your apartment complex, great. Can you exercise in the pool? Is parking a hassle? Financial decisions, especially after bankruptcy, demand looking at the specifics; so weigh your considerations carefully.

Private landlords will rarely have the type of amenities available that a commercial apartment complexes do but that doesn’t mean that they are less desirable options. For the smaller landlord who values his properties, keeping a nice, well-maintained unit is critical to attracting solid tenants.

Perhaps the best advantage to working with a private landlord is their ability to be flexible with the rent amount or payment schedule. You may find some landlords are open to you paying twice a month or just in cash. They will still seek market rates for number of bedrooms and location, but for good tenants, they are more likely to have some flexibility. Additionally, you may not be subject to strict credit rules printed in bold on the tenth page of a complicated lease. Most individual landlords have simplified leases that clearly describe the most important rules and fees, and are more likely to be understanding about your financial situation.

In whichever direction you head for an apartment, always be prepared with knowledge of your credit history. Be alert to its status, knowing exactly what appears on it and in fact, have a copy of it with you when looking at an apartment. In addition, bring a recent pay stub, tax returns and even a reference letter if possible. The more prepared you are about your financial situation, the more apt you are get find a comfortable, affordable place to call home.

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Published Friday, July 10, 2009 @ 5:34 pm

While bankruptcy can provide you a haven from financial insecurity, it will not automatically change for you the habits that may have led to your decision to file.

It’s important for you to understand that you are not the only person who has ever overspent. Money was good, credit was easy and why shouldn’t you live the lifestyle you deserve? Well, no one is telling you that you can’t. However, it is important that you gain that lifestyle using reasonable financial judgment and the discipline to spend within your means. To do that, especially after bankruptcy, taking time to assess your spending habits is a critical exercise. You never know, a simple look at the numbers may reveal some recurring trends of which you were not aware that could lead right back down the spiral.

First and foremost, accept the fact that a in-depth look at your spending practices will reveal that you are probably wasting money unintentionally. And again, everyone is. Even those who you may believe are “rich” are wasting money. So, when perusing the monthly expenditures, keep an eye out for the little things. For example, the amounts spent on a lunch out here and there, the extravagant coffee, trendy soft drinks, packaged snacks or check-out aisle impulse buys. (Did you really need extra batteries just to put in the kitchen drawer?)

What about the extra channel cable package that you agreed to a few months back? At the time, the incentives were great. More channels! Less money! Well, the three-month promotion is long over and the only thing you are watching are dollars fly out of your checking account. Not exactly “appointment television”, huh?

How many other promotional time periods have expired you may have forgotten about? Try looking at your credit cards. Credit card issuers make their profits on surprise interest rate adjustments. Even if you think you are still paying 6%, the odds are pretty good that some random expenditure or momentary spending milestone has triggered a double-digit spike in your interest rate or added a monthly fee. Be wary.

In this exercise, mindset is everything. Remember that wealth is relative. A salary of $100,000 per year is outstanding for some and paltry for others. The idea is to create a lifestyle around what you earn. And yes, there are a lot of societal pressures to have more, to buy this, to be seen in that. Take time to consider the real importance of material things. Seriously think about the value or benefit you get from buying a new car for $25,000, financed for seven years, versus the benefits of a buying a solid used car for $8,000 that you saved for or could pay off in under a year?

Think of buying cars as an investment. The point of investing in something is to receive a return on your asset. Well, cars are depreciating assets. And there is nothing worse than debt on a depreciating asset. In other words, you lose money on a new car. From that perspective, buying a reasonably priced, dependable used car for less money makes you a smarter investor.

Like your over-priced car, seek other things around the house that you could sell or replace to not only relieve debt but to alleviate your lifestyle from the need for “stuff.” While it sounds a little bohemian, learn to be happy with less. And a good, in-depth analysis of where your monthly dollars are heading is the best start.

From the Law Offices of John T. Orcutt. Call today for your free initial consultation. 1-800-899-1414.

Cary bankruptcy. Apex bankruptcy. Greenville bankruptcy. Rocky Mount bankruptcy. Angier bankruptcy.

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Published Thursday, July 9, 2009 @ 2:48 pm

Coming out of bankruptcy is a great milestone. It renews confidence, offers comfort and provides you with a sense of accomplishment from meeting a tough challenge head on and surmounting it.

Like most people who have experienced these emotions, you have comprehensive understanding of how to better control your spending and look out for your financial well-being. One component of that is learning to identify common credit report problems that arise after bankruptcy.

Look for a record of credit agency activity that is listed separately from the debt they tried to collect. This makes it appear as if you had two outstanding debts. The original debt should have been discharged as a result of your bankruptcy and thus, the agency should not appear on the report. This is a very frustrating component of a post-bankruptcy credit report because a bankruptcy eliminates debts with organizations to which you owe money but does not eradicate the record of the debts. In other words, it’s a two-step process: removing the debts and reporting that they were removed. Parts of the second step often fall through the cracks.

Another common reporting error involves accounts that were reported closed by the creditor instead of it being closed by you. This would indicate that a creditor shut down the account instead of it being done as a result of a bankruptcy, intimating that it was done outside of your control because of your inability to pay. If a closed account appears open and the payment history demonstrates a clean record, leave that one alone because it will help.

We’ve said on the blog many times but it bears repeating: make sure your credit report looks good at all reporting agencies. It’s very possible that one bureau reports a solid history and the other still shows bad debts. It is also crucial to ensure any existing debt is correctly reported by all agencies.

One technique for proving credit report accuracy after a bankruptcy is to compare your report with your bankruptcy paperwork. Look at discharged debts and then what is listed on your credit report. This is bare-bones way to rest comfortably that your information is being handled the right way and won’t derail any future loan plans, such as a mortgage or student loan.

One last bit of advice: Do not turn to a credit repair business to repair mistakes in your credit report. These are businesses that charge a hefty up front fee, promising to improve your credit score quickly. As someone who took the initiative to contact an attorney, gather your wits and decide that bankruptcy was the best option, you can repair your credit on your own. With some time and a little bit of effort, you can rebuild your credit.

From: The Law Offices of John T. Orcutt. Helping thousands of families with the power of bankruptcy. Call 1-800-899-1414 to set up a free initial debt consultation.

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Published Thursday, July 9, 2009 @ 9:22 am

Bankruptcy and personal money management are tightly intertwined. As you read through the blog you will probably notice that a lot of our posts will offer advice and tips on saving, how to avoid scams and general philosophies about preserving financial stability.

Here is another post about how to hang on to more of your money, which is especially useful for anyone coming out of bankruptcy or performing some initial research. These tips involve banks, which many people believe want to help you with saving money. However, that is not always the case. In fact, it’s becoming quite the opposite.

Banks (and credit card companies) are in attack mode. Surprise fees and quick interest jumps are now an everyday occurrence and customer service operators are busy as ever routing the complaints. Here are a number of examples:

• Checking accounts: This is basically a fee to use your own money. Many banks will give it to you for free if you have other accounts or a loan. Once that loan is paid off (isn’t that the idea?) they will add a fee for your checking. Most likely without notice. Some will charge you now if you don’t carry a specific balance or use enough checks each month. Don’t assume your checking account is free.
• ATM fees are very unreasonable, across the board, if you don’t use your own bank’s ATM. Some surcharges are reaching toward $4.00/transaction. The only way to make this affordable is to take out more money, thus lowering your cost of getting the money. Still, you probably only need $20, not $400. Use your own bank but if there is still a fee, go inside to a teller.
• But wait … many banks now charge to use tellers! Complaints are piling up about the reinstatement of teller fees. As hard as it is to believe, it was once quite common but drew significant flack from national consumer advocates. Looks like we’ll need their help again.
• Overdraft charges are also becoming steep. While many banks began to offer accounts with no overdraft fee as an incentive, watch for it to kick-in unexpectedly. Also, it does not help that a bank allows you to take more than you have from an ATM and then has the nerve to hit you with an overdraft penalty.
• If you deposit a check that bounces, you get slapped with the penalty. Ouch. How were you supposed to know?
• You get charged for the ATM, charged for speaking with someone, so how about the phone? Nope. Fees are popping up for calling the bank, too.
• Visiting a brother in Canada? Well, you should now expect to pay to get currency converted. Expect to get lopped off at the knees on the front end, when exchanging the money and at the end when converting back to dollars whatever foreign currency you have left over.

As most of us try to avoid using credit cards and the fees they are implementing before new laws kick-in to prevent that very thing, it seems that even working in cash will cost us. Basically, it’s become a tough world in which to try to stay debt-free. For those teetering on the brink of a major financial setback, don’t let a surprise fee push you into the abyss.

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Published Thursday, June 4, 2009 @ 2:55 pm

A very troubling trend that potentially affects millions of Americas is going unnoticed. Don’t make the mistake too many people make when it comes to arbitration. There’s a good chance that you have conceded to arbitration already, probably unwittingly. That’s because more and more of the big companies that touch our lives on a daily basis, such as software developers, banks, web based services and of course, credit card companies, are writing arbitration clauses into their terms.

You know about those, right? The masses of tiny print below the box you check so you can get to the download screen, or the pages and pages of tiny print that accompany your shiny new credit card? Did you read them carefully? Probably not! Who has the time, legal expertise or eyesight for that? Not many consumers―big companies are counting on it.

Arbitration is an alternative form of dispute resolution, and it is often touted by its supporters as a welcome alternative to an over-clogged court system.

Don’t buy the hype; arbitration appeals to big companies because it allows them to call the shots. Instead of resolving disputes before the courts, which balance the needs and interests of all parties, arbitration allows one party to a contractual relationship to potentially take a decisive advantage. (Kudos to you if you guessed that it’s the party that writes the contract.)

A common example concerns what’s called forum selection; ordinarily, if you have a dispute with someone, the place where the dispute will be settled legally must have some connection to the parties at odds or the disputed events. Arbitration and forum selection clauses allow companies to select the forum―and it’s not going to be your local courthouse. If you don’t respond to an arbitration notice or attend the meeting, which could be thousands of miles away, the company essentially wins by default.

And it gets worse: the courts have consistently enforced arbitration judgments. When you accept the terms of a contract with an arbitration clause, which you do when you activate your credit card, install a computer program or even open the box it comes in, you agree to be bound by the findings and judgments of the arbitrator.

Why would courts enforce such seemingly unfair provisions? The answer is that the “freedom to contract” means that two parties to a contract are presumed to be walking in with open eyes and equal bargaining power.

This is absurd, of course. Usually a consumer has much less bargaining power than a big company with a legal department and a near monopoly on the market.

Many credit card companies are now working with an organization called National Arbitration Forum instead of going through the court system. Settling through arbitration allows these companies to get expedited judgments against consumers, often totally unchallenged.

If you get a notice of an arbitration proceeding against you, DO NOT ignore it. Read the notice very carefully and make sure that they are not claiming a bigger debt than you owe them. Study the stipulated procedures for disputing claims. In addition, require that they prove even those debts that you believe to be accurate.

If you’re already working with a bankruptcy lawyer, show him or her the arbitration notice so your attorney can help you understand your options. Make sure to dig up any notices you received and ignored in the past; these can affect your bankruptcy proceedings.

And in the future, watch out for arbitration clauses in contracts; if you are choosing between two companies that are in all other aspects equal, treat an arbitration clause as a deal breaker.

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Published Sunday, May 31, 2009 @ 8:55 pm

By the time you realize that bankruptcy is the best option for you, it’s probably safe to say that you’ve been dealing with creditors for a long time.

Even worse than creditors are the collection companies, who are trained to bully you into agreeing to make payments even when you don’t have a cent to spare. 

Eventually you begin to feel that these companies have all the power and you have none. What’s more, part of the reason bankruptcy carries a stigma is that creditors make you feel that without them, you won’t be able to do anything. With a bankruptcy on your credit history, aren’t you effectively ruined for years? The answer is an emphatic “no”. Rebuilding your credit after bankruptcy is not impossible.

The truth is that filing bankruptcy is actually the first step in rebuilding credit. By filing bankruptcy, you get rid of the burden of debts you cannot pay. That frees up your income, and freeing up income gives you the money to start rebuilding your credit.

Think of bankruptcy as a beginning of the process, not an end.

After you declare bankruptcy, you can put your mistakes behind you and start fresh. Mistakes are human; that’s how we learn. Don’t beat yourself up about having made some. We all make mistakes, lots of them.

Arguably, your time would be better spent working to correct the habits and behaviors that caused your life to spin out of control in the first place. With a few pointers and a sound plan in place, you will hit the ground running.

Then, with your income freed up, you will be on your way, taking the steps needed to rebuild your credit as fast as possible.

One basic, initial step you can take after declaring bankruptcy is getting a copy of your credit report. You should wait some time–three months or so– after declaring to order the report. This will ensure that the information on your report is up to date. Getting the report will help you assess your creditworthiness, since that is what creditors will look at first. You should also take the opportunity to correct any mistakes you find on it.

Once you’ve done what you can to make your credit report as positive and accurate as possible, continue to take affirmative steps toward a brighter financial future. You declared bankruptcy–this was brave and decisive. You can handle what comes next with a good plan in place.

As you prepare your plan, identify what got you into trouble and your role in the situation. Look back over your past and be totally honest with yourself. Figure out where you can improve. For instance, you can need to control your spending, start a savings account, make financial decisions that will benefit you over the long term, seek financial advice from people in the know, and keep positive.

Once you’ve discharged unmanageable debt you can start fresh, but with the added benefit of the experience and the knowledge you have gained. You will be in control…but this time…you will know what to do…and more importantly…what not to do.

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Published Sunday, May 31, 2009 @ 6:49 pm

The decision to file bankruptcy is more often than not driven by your willingness to accept the fact that you need help. Chances are, you are fully aware of the practical reasons: late bills, consistent calls by creditors, job loss, unseen medical expenses, stress, denied credit. However, getting over the psychological barriers can be the most difficult corner to turn in a person’s road to financial recovery.

Don’t worry, you are not alone.

Almost everyone has the same fear before going into bankruptcy. The idea that you will never again be able to own a home, buy a car or get reasonable credit can be overwhelming. Unfortunately, there are a lot of creditors out there who encourage customers to think that way. It creates a sense of fear that forces a person to believe that credit is everything, that you can’t have the lifestyle you want without it. That fear is what attracts people to applying for credit, the fear of a “below-average” lifestyle.

Having credit is a powerful thing. Personally and socially, it can make you feel confident, successful and financially comfortable. And clearly, having available credit is something everyone should strive for. But only to an extent. It’s not something you should ever use to define yourself.

When dealing with your credit after bankruptcy, do all you can to remind yourself of your old spending habits. Or, if it wasn’t bad spending decisions that led to bankruptcy, try to instill some lifestyle changes that are contrary to what you did prior to bankruptcy. Whether it was a health-related issue, divorce or other social misfortune, always be honest with yourself and the people around you. Don’t hide from your bankruptcy. After all, the important thing is you made the decision to improve your life, make changes and get yourself back on track. As earlier posts on this blog have stated, bankruptcy is not a scarlet letter, it’s simply a financial management tool.

Once your credit is re-established and you feel confident about your financial wherewithal, be wary of the lure of credit offers. Even your past creditors will happily place you on their direct mail list, sending you offers of low interest rates and annual reward catalogs laden with gifts and trips and discounts. All you have to do is spend. And spend some more.

However, you can outsmart the aggressive credit marketers by creating limits for yourself, playing credit card companies against each other when seeking interest rate reductions and account benefits and by paying your bills on time, in full, every month. And always remember, don’t count available credit as income or available savings. Also, don’t fall into the trap of believing you need a credit card for emergencies. Cash is always king, and once you use it to buy something, you’re paying for it only once, not every month.

Remember that one of the key reasons for filing bankruptcy is to make change in your life. It’s key that you take that change to another level and integrate that discipline into your personal, social and professional life. You made the right choice to file bankruptcy when you did, now make that change permanent.

Think you need to file. Find out for sure. In North Carolina, contact the Law Offices of John T. Orcutt. The initial consultation is FREE. Offices in: Raleigh, Durham, Fayetteville and Wilson. Call toll free to 1-800-899-1414 today.

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Published Thursday, May 28, 2009 @ 7:50 pm

So you did it. You came to the difficult realization that you needed bankruptcy protection, you got through the process, and you received your discharge. First off: Congratulations! This is a very good thing. The mountain of bills that had been dragging you down for so long is gone — along with all the stress and anxiety of fending off the creditors who were trying to collect on those bills. You get to start over, free and clear.

Your next step is to take advantage of this unique opportunity. Whatever the reason for your bankruptcy, your immediate focus should be doing what you can to rebuild your credit and maintain your new found financial stability. Here are some ideas on how you can make the most of things after bankruptcy:

The first thing you should do is get a copy of your credit report. Review the report to make sure the debts included in your bankruptcy are listed as discharged. Once you’ve done this, consider getting a secured credit card to start rebuilding your credit. This is a credit card that requires you to put down a cash deposit equivalent to the credit line on the card. Because you have to put down a deposit, there’s usually no problem in qualifying. And most secured card issuers report your payment history to the credit bureaus, but do not report that the card is secured.

Remember, however, that the purpose of obtaining new credit is to rebuild your credit score, not to start carrying debt again. You should pay off any credit card balance every month. The bigger goal, though, is to live on a cash basis as much as possible. Think of adopting the general motto that if you can’t afford to pay for it in cash, don’t buy it. This means you need to create and commit to a realistic budget — one that does not require the use of credit to work. Part of this budget should include a savings plan. If you can create a cash cushion for yourself, you’ll be better positioned to handle unexpected expenses without having to take on debt.

The idea is simple, yet powerful: live within your means as best as possible. This will help you avoid getting drawn back into the debt cycle. And, it’s liberating: when you buy something, it’s yours – period. No doubt, it’s difficult to stick to this kind of lifestyle, but it’s doable. And there are things you can do to make it easier. Reduce your day-to-day spending. Cut out that fancy coffee from Starbucks. Bring your lunch instead of buying out. Eat dinner at home more often. Wait for things to go on sale, or try to find generic brands. Also, look for cheaper forms of entertainment: instead of going to the movies or the amusement part, go to the beach, a public park, or a free outdoor concert.

If you maintain this lifestyle, you’ll find your credit rating will quickly improve. After just a couple of years, you should be able to take out credit for larger purchases, where it’s usually necessary, like for car loans and mortgages – and at competitive rates.

The point of all this is: Enjoy the financial freedom of life after bankruptcy, and do what you can to hold on to that freedom.

The Law Offices of John T. Orcutt, with convenient office locations in Raleigh, Durham, Fayetteville, and Wilson. Call (toll free) 1-800-899-1414, to set up a free, confidential debt consultation. Visit www.billsbills.com for more information.

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Published Wednesday, May 20, 2009 @ 11:12 am

After living with the stress of debt for a while, it’s very possible to become accustomed to it. Maybe you think that financially, things are just always going to be that way. “I’ll owe more than I make and somehow, I’ll just manage to get by every month.” Serious debt is an emotionally trying and socially problematic complication of life and unfortunately, almost like an illness, many of us learn to accept the pain and find a way to live.

But it simply doesn’t have to be that way.

Living with the sleepless nights and monthly frustrations of just scraping by is not your lot in life. You deserve to rise above it, and bankruptcy can make that happen. A healthy financial management tool, bankruptcy can cure your financial ailments and offer you the chance to start things over. And when you make that decision, you’ll begin to realize how stable your life can be without creditors being a part of it. You will also learn how to spend wisely and that true wealth is relative.

As you begin to consider the many benefits to bankruptcy, start to reflect on what habits contributed to your financial situation. More importantly, take action to correct those habits. Ask yourself, “What in my life is really necessary?” From people to junk, look around your house and social circle and assign a value to everything and everyone around you, because if it’s in your life now, it had a role in your current situation. Do you have friends that, maybe innocently, convince you to buy things you do not really need? Are there items in the closet that looked great in the store but still have tags? Cleanse yourself of things that equate to your debt, mentally and physically. The process of minimalizing can be a great step toward mental comfort because as the saying goes, “the more you have, the more you have to lose.” Sell, donate or throw away things you don’t use. Be brutal about it.

This de-cluttering process may even mean forgiving debts owed to you. It’s very possible money you have lent is a direct contributor to you filing bankruptcy. If so, let it go. It is only perpetuating your concern about money. Let whom ever owes you out of their obligation. Free yourself of seeking money owed to you and think only about changing your situation. Again, if that money helped create your position, eliminating its role in your life will only help you move forward.

A substantial portion of financial wisdom comes from self-discipline. Thus, try to stop concerning yourself with money; don’t let it be all encompassing. Even years after your bankruptcy, keep your income, financial prosperity and approach to handling money private. Don’t brag about windfalls, a good salary or a successful investment. Always be above it. Understand too, that people who always talk about their money, are usually those who don’t have any.

Consider bankruptcy as a way of finally taking control. All the bills, phone calls, late notices and empty checking accounts are things you think you can’t control. They have power over you. But you can seize that power and be the one to take charge. That is what bankruptcy is all about.

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Published Monday, May 18, 2009 @ 4:30 pm

We see the commercials, hear the clever tag lines and are inundated with information about how to receive our credit report. So while a goofy guy singing catchy tunes about the perils of not knowing what’s on your credit report certainly has its marketing merits, his chorus doesn’t say much about what to do when you find something on your report that doesn’t ring true.

First, make sure that your report is indeed your report, as many of the mistakes found involve the most basic information, such as your name, social security number or birth date.

Look for items that are older than seven years, which signifies that a report item must be removed. Watch for accounts that are reported more than once or any indication that you were part of a lawsuit. Some potential creditors may believe that to be a sign that you owe part of a settlement and therefore may not be a worthy credit risk.

There is a reason why your credit report will arrive with a dispute or investigation request form: you have to take care of reporting any errors. Credit reporting agencies are not at all proactive about investigating mistakes not brought to their attention; it’s simply too tall a task. Therefore, your first step in taking care of any error is to complete and submit the form. It helps a great deal to include a personal letter identifying the particular issues in more detail.

Next, contact each of the organizations involved with an error notifying them of the mistake and asking for an official receipt that includes the account number in question, their reasoning for the dispute and all accompanying information related to the account. Be firm but professional in your letter and demonstrate that you will continue to follow up and pursue the matter indefinitely until it is solved.

Should your efforts return positive results and your report is corrected, don’t just sit back and assume the best. It is not at all uncommon for deleted information to re-appear. Remember that somewhere amidst all the computer-generated data and automated financial reporting, there is a person in front of a computer. Order another report a few months after you believe the errors should have been corrected and if you do spot the same mistake, send yet another letter with the evidence you gathered the first time around, demonstrating their recognition of the error.

Remember that if a creditor believes their dispute is valid, the information will stay on your report. Continue your efforts of paper-based contact with the creditor to create a provable record of your persistence. Should the creditor come around and finally confirm the fault is theirs, you should forward that confirmation to the credit bureaus as soon as possible to ensure the mistake is removed.

Credit report errors can do some real damage if not taken care of quickly. Paperwork, forms and phone calls are all part of it, so be patient but persistent and always remember that it’s your good name on that report. And remember, if you are in over your head in debt, bankruptcy is often the most efficient solution to rebuilding your credit. Talk with a bankruptcy attorney to find out how to take control of the debt collectors now. Serving North Carolina residents, contact the Law Offices of John T. Orcutt today for a free bankruptcy consultation.

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Published Monday, May 4, 2009 @ 12:44 pm

The automated credit score was created in 1959 by the Fair Isaac Corporation. While “Fair Isaac” may not seem so aptly named for those who are struggling with low credit scores, the FICO system is the most commonly used numeric benchmark by which our lending and credit system measures financial wherewithal.

Unfortunately, so few of us really understand how that number is determined. In fact, if the credit rating system took a more open approach to communicating its processes, especially given the impact they can have on our livelihood, perhaps not as many people would be facing economic trouble. It is certainly worthwhile for anyone facing credit issues to understand as much as possible about how that three-digit number comes to pass.

Your FICO score is a comparative number, meant to contrast your ability to pay a lender back as agreed against another borrower’s ability to pay back that lender. So, the FICO score ranks you according to others using “real-time” information from your credit report. Basically, it uses a scale of 350 to 850 to determine how much of a risk you pose to a potential creditor.

There are three different credit reporting agencies that may report a different number to a potential lender. Although, 90% of the largest banks in the United States use the FICO score, so the odds are very good that a lender will use that number.

Fair Isaac uses a number of facets from you financial history to determine your rank, the most important of which is payment history. The list of five factors is broken down accordingly:

• Payment history – 35%
• Amounts owed – 30%
• Length of credit history – 15%
• New credit – 10%
• Types of credit used – 10%

Do you notice a few things missing from the list? How about income? Or savings? It’s important to understand that even though you have a high-paying job, live in a highly-regarded zip code or have a comfortable cushion of cash in a savings account, you can still have a low FICO score. Only the data in your credit report is considered in your FICO score.

You may hear some people recommend that it’s always good to have some credit or to carry a small balance on a credit card to demonstrate you are capable of handling debt. That is not necessarily true. And, you can’t be hurt by not having debt. If you carry a balance, your risk increases. More to the point, your FICO score can take a hit if you carry balances too close to your limit. On everything from gas company cards to retail credit, you will see little benefit from letting a balance carry over each month.

The idea that carrying a balance is a good indicator of financial responsibility probably stemmed from the actual notion that it can benefit you to use credit from time to time. However, you should do so reasonably and when you do, pay the balance in full. A sizeable purchase–that you can pay off–every couple of months will contribute to a high FICO score.

Therefore, the best way to achieve a solid credit score is to be very careful when considering new accounts or loans. Those with the highest credit scores are the same people who are the most conservative when it comes to applying for credit. And your FICO can also be improved by paying your bills on time. Remember the breakdown above? Payment history is the most critical factor. Therefore, paying late is the single most damaging action to your FICO score.

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Published Thursday, April 16, 2009 @ 11:03 am

Are you thinking you should pay back – or “reaffirm” — some of the debt that was discharged in your bankruptcy? Don’t fall prey to pressure tactics from creditors; if the debt was discharged, you have no liability for it. You may also think that reaffirming your old debts will allow you to rebuild your credit. That’s true, but only if you can really afford it. If you get behind on your payments, you may end up right back where you started before bankruptcy, or worse. When you reaffirm a debt, you renew your personal liability for the debt; if you fall behind on your payments, not only will your credit suffer, but you could be sued on the debt!

You may also believe you have to reaffirm a debt because you won’t be able to get the same kind of credit again after the bankruptcy, such as a car loan. This is a myth creditors want you to believe. While the bankruptcy can stay on your credit report for up to 10 years, that does not mean you won’t be able to get new credit for 10 years. Wiping out the bulk of your onerous debts through bankruptcy will allow you to quickly reestablish a good payment history and become more attractive to creditors – because now you can afford to pay them. Keep in mind that bankruptcy has given you a unique and powerful opportunity to start over, to get your life back on track, and to avoid ever ending up overly-burdened with debt again.

You shouldn’t let feelings of guilt or shame about having filed bankruptcy drive you to reaffirm old debts either. You filed bankruptcy because you had to; you couldn’t just keep going on drowning in debt. Try to see this as a responsible decision, which was necessary to regain control of your life. Don’t feel like you owe something to your old creditors. Just think of all the interest money you paid them over the years, and you probably won’t feel so bad.

Special caution should be exercised if you are asked to reaffirm a secured debt. If you are intending to keep secured property, such as a car, your creditor may require you to reaffirm the debt. Any request for reaffirmation of a secured debt should be filed with the bankruptcy court and evaluated by your bankruptcy attorney. In many instances, despite the creditors insistence, a secured debt does not need to be reaffirmed. By signing such a reaffirmation without the advisement of an attorney, you are unnecessarily putting yourself back on the hook for the full amount of the debt. That means that after bankruptcy, if you default, the lender can sue you for the full amount of the loan.

The point is, reaffirmation is risky move for most people. It could strip you of the primary benefit of bankruptcy: to put your troubled financial past behind you. So, if you’re thinking about reaffirmation, talk with your bankruptcy attorney first.

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Published Wednesday, April 15, 2009 @ 1:08 pm

It wasn’t easy to come to the realization that filing bankruptcy was the right solution for you. You agonized over the decision, struggled with the shame and embarrassment of not being able to pay all of your monthly bills, worried about eviction, foreclosure, repossession, lawsuits, and exhausted by all of the stress. But after learning the facts about bankruptcy, you made the important decision to hire a lawyer and move forward with your life by seeking the protections of bankruptcy law.

Bankruptcy is designed to give people a new start in life. Filing bankruptcy can be the beginning of a true financial and emotional health success story. Once you’ve made it through the process, a huge weight will seem to be lifted from your shoulders. You can breathe a deep sigh of relief. Life can feel good again. Now you have the opportunity to develop new skills and habits that will make you stronger financially and emotionally. You can learn new ways of managing your money to create a stable and fulfilling life.

The period following bankruptcy is a critical time in which you can take control, and stay in control of your life. But, without proper attention and planning, you could also find yourself slipping back into the familiar patterns that may have gotten you into financial trouble in the first place. It is crucial to your financial recovery that you change the way you think about money. Here are a few steps that will help:

Find at least one person that you can talk to about your finances. It could be your spouse, a friend, or parent. They don’t need to be experts. Just have someone with whom you can be honest and open about your concerns and fears, or to celebrate your successes with. Being able to ‘bounce ideas off’ another person will help you think through your ideas and plans, and possibly help you address issues that you hadn’t thought of.

Choose your social and media influences carefully. If your friendships heavily stress ‘things’ or a lavish lifestyle, it’s time to reassess those relationships. Likewise, don’t watch or listen to television shows that show luxury living you can’t afford. Same goes for your children, if you have them. Unethical marketing tactics are constantly targeting innocent children who are notoriously vulnerable. Even seemingly ‘innocent’ shows teach children that they must have certain things or wear the ‘right’ clothing in order to ‘fit in’. Brainstorm to find new ways to be entertained or spend time together other than in front of the TV or at the mall.

Start saving, even before you’ve paid off all your bills. You may feel anxious about incoming bills after bankruptcy and long to be debt free. But while throwing all of your income at debt might make you feel better today, it may not be such a good idea in the long run. You need to start saving some of your money now, even if there are still some outstanding debts you’re paying on. Having a savings ‘cushion”, will give you a feeling of abundance: you actually get to “keep” some of your earnings. Saving will help you avoid using credit in the event of an emergency. Cars eventually need repairs, appliances give out, dentists are necessary. Having cash on hand in these situations could make all the difference to your post bankruptcy success.

Bankruptcy is a powerful tool to put you on the path to financial freedom. By playing it smart after bankruptcy, you can truly enjoy your fresh start.

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