Published Tuesday, March 2, 2010 @ 10:48 am

While many economists say this decade’s Great Recession ended in the middle of 2009, millions of struggling Americans who are still working hard to find meaningful employment would definitely disagree. And as we are all now well aware, the once thriving middle class is being hit especially hard—with a determination of whether you’re in a recession or recovery based largely on where you live and if you still have a job.

In the new year, the unemployment rate has, in fact, dropped incrementally from its staggering 10 percent highs in December 2009 to 9.7 percent, a small diminishment in the stats that some say exists because the long-term unemployed—the men and women out of work more than six months—have simply stopped looking for work. For these “long-termers,” making up some 40 percent of those collecting unemployment, these tiny changes in stats are far from comforting.

“These people, when you look at their unemployment rate, it’s just off the charts,” Lakshman Achuthan, managing director of the Economic Cycle Research Institute told CBS News Correspondent John Blackstone. “It’s very different from earlier patterns that we’ve seen in recessions.”

“For those who once worked in the auto industry, housing and manufacturing, new jobs could be a long time coming,” Achuthan adds, pointing out that, “Ten years ago, we had 18 million or so people in manufacturing; now, it’s a little over 10 million. So you have 8 million jobs gone and there not coming back, ever.”

In this case, the proof is largely in the pudding, as average Americans struggle to transition from job to job in this era of perpetual unemployment. Hammering this point home, CBS’s Blackstone also spoke with Kelley Novak, who used to own a restaurant in Napa, California, called the No Bad Day Café. In the months since Novak was forced from the restaurant business by falling revenues, she has been trying what is becoming a recession-worthy recipe: cooking up new ways to keep money flowing in at a time when finding a job seems impossible. Now she’s trying to feed folks on a diminished scale via a small catering business. “It’ hard,” she says, “because there’s nothing available and, you know, you just have to get creative.”

As is the case for many small businesses, the economic downturn hit her homegrown eatery especially hard. “We were down 30 percent like everybody else,” Novak told CBS. Not only did she have to close her California restaurant, but Novak was forced to lay off all of her employees. “It was sad. It was really sad,” Novak recalls.

With California’s unemployment pushing over 12 percent, Novak understands it may be a long time before the six people who used to work at the No Bad Day Café can, as Blackstone put it: have “ a good day.” Blackstone found, “Many more may have to follow Novak’s lead and find something they can do themselves – even though launching her catering business has been daunting, especially since she’s doing it on her own. ‘It’s just really frightening,’ says Novak. “But giving up is no answer.”

Novak is right. And another key to rebounding in a recession is knowing who can help. Extended unemployment is not only frightening, but can be fiscally devastating: draining savings, busting budgets, and leaving many bankruptcy bound.

A qualified bankruptcy attorney can assist proud, but jobless, citizens just like you to conquer your 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.

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Published Sunday, February 28, 2010 @ 9:26 pm

Bankruptcy is one of the most important decisions you may ever have to make. It’s not a decision to take lightly, and our office understands that you and your family have a lot of questions. While many of the same laws apply to many cases, rarely is your financial situation the same as another person’s. We all have different reasons for needing to rely on the bankruptcy code and just about every reason is as justifiable as the next.

To assist you in the most direct and non-invasive method possible, we have created three communication vehicles by which you can begin to explore why bankruptcy may be your best way out from under an impending financial crisis.

1. First, you can arrange a face-to-face meeting with us. Our practice serves North Carolina residents in 30 of our 100 counties and we have offices in Raleigh, Durham, Wilson and Fayetteville.

We structure these meetings to be confidential and without obligation. That means you are not encouraged to file bankruptcy or beholden to us in any way. We feel that because financial stress can be such a difficult matter with which to cope, it is best for us to be there for people who have questions. Maybe you’re worried about a collection agency. Or your bank isn’t returning calls about a mortgage modification. Whatever the nature of your debt question, a one-on-one meeting in one of our four offices can help you get it answered.

And best of all, there is no charge for this meeting. The introduction of money to a meeting such as this would only apply undue pressure and in many cases, add to your debt load. That is not what we want.

if you feel a personal meeting is for you, call us at 1.800.899.1414.

2. Another way to get things started or to ask questions is over the phone. If you can’t make it to one of our offices or only have time on your lunch break, maybe a phone call is the best way.

We understand that those in serious debt often develop a mistrust of those who want to help, especially given the ubiquity of shady “credit doctors” and debt settlement programs. Too many people have lost a lot of money to these bogus outfits. Please understand, we’re here to help you get out of debt using the strength of federal bankruptcy law. If you don’t believe us, take a look at our client testimonials at http://www.billsbills.com/testimonials.php. Talk to us in person or over the phone. We’ve helped thousands of families get through the very same financial challenges you’re going through right now.

3. Lastly, you can reach us via the Web. Our site, www.billsbills.com, has an easy form, available here, that you can fill out for us to call you. If you choose too, you can add some basic information about your situation, which will help us get some questions answered before we speak and thus, help you make a decision quickly about the best way to proceed. It won’t take more than five minutes to complete.

Again, we know that making the decision to file for bankruptcy is a serious one that deserves a lot of research. Our goal is to help you clearly understand the nature of your debt and how it can best be settled. If you can think of some additional ways to engage us or have suggestions for us, please let us know.

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Published Thursday, January 21, 2010 @ 11:50 am

The latest chapter in the Obama administration’s attempts to make lenders modify mortgages is to send SWAT teams – no, I’m not kidding, really, SWAT teams – into the call centers of major lenders to try to ensure that they follow the proper procedures and actually modify loans. Seriously, wouldn’t it be a whole lot easier just to pass cramdown and allow bankruptcy judges to modify mortgages than to try to sweet talk, bribe or otherwise convince bankers to do it on their own?

Because they’re not. Making Homes Affordable, the program implemented by the government last May, is designed to encourage banks to modify the loans of homeowners who are having trouble making mortgage payments. Mortgage companies are reluctant to do that, however: they make more money in interest and fees when a mortgage goes into foreclosure, than they make from the government when they successfully modify it. The government had hoped to have 3-4 million mortgages modified by the end of last year. As of mid December, the count was at 750,000 – the vast majority of those were still in the trial stages.

The news reports of lenders dragging their feet are backed up with anecdotal evidence from homeowners, who report that they call the lenders over and over, file and refile the same documents, and then call back, only to be told that no one knows anything about their case. Lenders counter that people don’t send them the requested documents. Really? Desperate homeowner, one last shot at keeping their home, and they can’t be bothered to fax some papers? The lender argument is a little hard to believe.

Hence, the SWAT teams. These are teams of three people, sent into the call centers of the seven largest loan servicers to make sure that the bank representatives are giving accurate information, filing forms properly, etc. Experts are not impressed – many say the initiative is unlikely to work. Some have called for putting permanent government observers in the call centers. They note that private insurers already have their people inside the call center, to help prevent the loans they’ve insured from going into foreclosure.

Unfortunately, neither temporary nor permanent government observers in the call centers seems likely to work. This is another initiative – like the ‘foreclosure hall of shame’ that was supposed to embarrass the lenders into modifying loans – that the banks will evade and ignore until the administration acknowledges it isn’t working and moves on to something else. The fact is, lenders aren’t going to modify substantial numbers of mortgages until they are forced to. Unless an initiative like cramdown is passed, which takes the decision to modify or not and how much out of the bank’s hands and gives it to a neutral party, foreclosures will continue to rise.

Fortunately, homeowners finding it difficult to pay their mortgage may have another option to save their home: bankruptcy. Your bankruptcy attorney will return your phone calls, keep your files organized, and not make you fax documents four or five times. In addition, he or she will help you map out a plan that will lead you to financial freedom. The Obama administration may sincerely want to help homeowners. But as long as they expect bankers to do it out of the kindness of their hearts, you’re probable better off filing for bankruptcy.

Brought to you by the Law Offices of John T. Orcutt. Providing North Carolina homeowners real foreclosure relief since 1995. Is your lender not working with you? Call today and find out how a bankruptcy can save your home. 1-800-899-1414. Convenient offices in Raleigh, Durham, Fayetteville, and Wilson.

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Published Monday, January 18, 2010 @ 6:43 pm

Is there any way to lower your car payments in bankruptcy? The answer, which may surprise you, is maybe. While Congress recently rejected attempts to pass a law that would allow bankruptcy judges to ‘cramdown’ mortgages, there do exist some limited possibilities for revising auto loans.

Basically, debtors who owe more than their car is worth – and who doesn’t, especially if you bought it new? – may be eligible to eliminate the portion of the debt that exceeds the value. In a Chapter 13 bankruptcy, the debt would be divided into ’secured’ debt (the value of the car) and ‘unsecured’ debt (the excess money on the loan), and the car loan would be revised to repay only the secured portion.

However, this option is generally only available for people whose car loans originated more than 910 days before they declared bankruptcy. Some courts have allowed, in limited form, for the portion of a car loan that was ‘rolled over’ from a previous car loan, to be treated as unsecured debt even in a more recently originated loan. However, note that a recent decision by the US Court of Appeals for the Fourth Circuit – whose jurisdiction includes North Carolina – has determined that this portion of a car loan is included as secured.

On the other hand, some attorneys report that some lenders are willing to renegotiate the loan, even if it originated in the last 910 days. While the law doesn’t require them to renegotiate, it doesn’t prevent them from doing so either. It’s at least worth asking, before you take up your other options.

If your loan originated less than 910 days ago, and your lender refuses to renegotiate, what are your other options as you go through bankruptcy? You can simply surrender the car. Lenders don’t like this option, but if you’re filing bankruptcy, they have no choice. They will take back the car and then sell it at auction. The difference between what you owe and what they sell it for will be entered against you as a deficiency balance. However, even in a Chapter 13, there is little chance the creditor will receive any return on its deficiency balance.

You can also reaffirm the loan. In this case, you agree to continue making the payments on the car even after you file for bankruptcy. Note carefully, though, if you choose this option and then default on the loan, you will be responsible for the deficiency balance, and the lender can sue you for it. Reaffirming your car loan has some advantages though: you get to keep your car, which means you don’t have to look for a new car loan with a recent bankruptcy on your record. Making these payments on time is also a good way to rebuild your credit – just make sure the lender is reporting them to the credit agencies.

As always, remember that the best way to negotiate this maze is with the help of a good bankruptcy attorney.

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Published Monday, December 28, 2009 @ 7:10 am

The New Year is a few days away. And without doubt, millions of Americans will welcome 2010 with grand hope, desperate to put 2009 far behind them, the year the Great Recession took hold of our collars and shook us into submission. Unfortunately, many Americans will greet the end of the 2000’s first decade still in debt and financially directionless.

But that doesn’t have to be the case.

Bankruptcy, despite all you may think you know about it, can make 2010 the year you really start over, the year things become as you make them, the year you regain control.

The federal government is reporting that with 2009’s end, so goes the worst national economic era to strike the 50 states in decades. Much of this optimism, unfortunately, has failed to provide security. The talus is simply too loose, the slope too steep and the edge too precipitous for Americans to feel confident in the footholds being provided. Unemployment continues to shroud our workforce in a cloak of despair and frustration. All the positives can be too easily brushed off as temporary, government-designed band-aids that do nothing for long-term care and instead will soon peel off, exposing our credit card cuts and sub-prime avulsions to additional economic bacteria.

However, treatments are plentiful. And bankruptcy is one of them.

The bankruptcy process, when handled by a competent, established attorney, is a very respectable way to handle the stress and prevent the longstanding financial damage that un-attended-to debt can do to a family.

Most people who give thought to bankruptcy quickly brush it off as an escapist’s tool; something the irresponsible do to cover their mistakes. Well, if you were to start asking around, it would take little time for you to uncover that most of those who have filed for protection are professional, educated and careful with their money. You will also find that things like sudden unemployment, medical bills and emergency life expenses do not discriminate. They affect everyone and if we were universally prepared for those types of setbacks, we wouldn’t need the bankruptcy code.

Back in 1934, the U.S. Supreme Court established the need for a federal measure that could assist the honest debtor in repairing their economic wherewithal. That same year, an opinion was written on the matter that said:”(Bankruptcy) gives the honest but unfortunate debtor … a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.”

A few years ago, the lending industry powered a major revision to the bankruptcy code called The Bankruptcy Abuse Prevention and Consumer Protection Act. Despite its title, it was designed to make filing bankruptcy more difficult. It was meant to perpetuate the stigmas and make people less tolerant of those who have to file.

The law changes included the “Means Test,” which was designed to qualify a person for Chapter 7. If you made too much money, suddenly you are not eligible to file under the same guidelines as others. The questionable constitutionality aside, the law served to make the bankruptcy code that much more tedious and frustrating for people. Without question, it prompted many people to avoid filing altogether and made the protection of our established laws that much more difficult to obtain. But don’t buy into the myths or the hype. For 99.9% of you, bankruptcy is still a valid option. And the Law Offices of John T. Orcutt know how to make the new bankruptcy laws work for you!

If you want 2010 to ring in on a positive note, don’t do what you did in 2009. Let facts drive your decisions, not misappropriated stigmas and half-truths. It’s your New Year, give yourself a reason to make it a happy one.

In North Carolina, contact the Law Offices of John T. Orcutt. 1-800-899-1414.

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Published Saturday, October 24, 2009 @ 11:16 am

If you are considering filing for bankruptcy protection but are reluctant to hire an attorney to help you with the process, there might be a couple of explanations. Maybe you are feeling a little bit embarrassed about your situation and are none too eager to spill your troubles to a stranger. This is understandable but it shouldn’t hold you back; a bankruptcy attorney is like a doctor for your financial health, and there is no need to be embarrassed when you talk to a doctor.  If it’s not embarrassment or even sheer inertia holding you back, it’s easy to hazard a guess about another source of worry: attorney’s fees.

When people are ready to file for bankruptcy protection, they are thinking that the last thing they need is to spend more money. Understandable, but you should not let this stop you from seeking the help you need. Remember that the first consultation with most attorneys is often free (always free with the Law Offices of John T. Orcutt), so make sure to look for a reputable firm that offers this opportunity in your area. In a Chapter 13 bankruptcy, the up-front attorney fees are minimal, often less than $200.00. The remainder of the fees are paid through your Chapter 13 plan. If Chapter 7 is advisable, the up-front money will be higher, but your bankruptcy attorney can suggest some ways to come up with the money.

You may have heard about some the more extraordinary bankruptcies, such as the 2008 Lehman Chapter 11 filing. According to filings in a Manhattan bankruptcy court, the once prestigious investment bank, which collapsed in September 2008, paid out $402 million+ to attorneys and advisers in one year as the company struggled through a very complicated Chapter 11 reorganization. As Lehman struggles to pay back creditors, they have had to sell or auction the assets that were once the hallmarks of a prominent (and prominently excessive) bastion of the investment world. Take for example the funds they have raised through the sale of their multiple jets. Lehman’s art collection, comprising more than 280 works, is reported to be next on the chopping block as Lehman grinds through its ultra-complicated bankruptcy.

If you are worried about how much your bankruptcy attorney will charge you to help you unload assets like your old Gulfstream IV jet, who can blame you? That sounds like a pretty complicated filing. If, however, you are one of the millions of Main Street Americans whose personal lives were slammed by the credit crisis, your bankruptcy is likely to be much simpler–and cheaper. Whatever you do, don’t even consider filing without an attorney. The bankruptcy process became infinitely more complex after the 2005 law change, and only an experienced bankruptcy attorney can successfully navigate the many unforeseen obstacles.

In North Carolina, the Law Offices of John T. Orcutt always offer a free initial consultation. Call 1-800-899-1414 today to schedule a free initial consultation today. Or visit www.billsbills.com for more information.

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Published Wednesday, September 16, 2009 @ 10:06 pm

The four-year anniversary of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) is right around the corner. You might recall all the hype in the months leading up to the enactment of BAPCPA. This was the banking and credit industry’s seventh attempt to get the legislation on the books. They pitched BAPCPA as necessary to curb “rampant abuse” and to restore “personal responsibility and integrity” in the bankruptcy process. With the Bush Administration at the helm of a Congress chock full of conservative lawmakers, the banks and credit card companies finally clinched a large enough sympathetic audience to bring its agenda to life.

BAPCPA called for sweeping changes to the Bankruptcy Code – undoubtedly the most significant overhaul of the Code since it was enacted in 1978. The depth and complexity of the changes caused much confusion, uncertainty, and speculation about what protections would be left for consumers in the new world of consumer bankruptcy practice. This sparked a mad dash to file bankruptcy before the new laws went into effect on October 17, 2005. So what does this new world of bankruptcy practice look like four years after BAPCPA took effect? Did the banking and credit industry get its money’s worth for the billions it spent marketing the legislation?

Well, one thing’s for sure: the new laws did make it more expensive and difficult for consumers to take advantage of the protections that bankruptcy has historically provided. But one of the primary things BAPCPA’s backers hoped to achieve was to force more debtors out of Chapter 7 liquidation and into repayment plans under Chapter 13. The primary mechanism to achieve this goal was a set of eligibility thresholds for Chapter 7 based upon a person’s income – particularly BAPCPA’s now-infamous “means test.” Generally, if your income exceeds the median income for a family of your size in your state, or if your monthly disposable income is more than $100, you’re presumed ineligible for Chapter 7.

BAPCPA’s backers were betting these new rules would sharply reduce the number of Chapter 7 cases, so debtors would ultimately have to pay back more of their debt. But despite the sweeping “reform,” the numbers have remained pretty much the same. Between 1999 and 2004, before BAPCPA was enacted, the average percentage of cases filed under Chapter 13 was 29 percent. Initially, in the first year after BAPCPA, the percentage of Chapter 13 filings rose. But, by this year, the numbers had returned to pre-BAPCPA levels: in fact, during the first seven months of 2009, the average percentage of Chapter 13 cases was actually lower – 27.6 percent.

Here’s another interesting fact: The United States Trustee’s Office reviewed the Chapter 7 filings between October 17, 2005, and June 30, 2006, and determined that 94 percent of the debtors automatically qualified for Chapter 7 under the means test – based upon their income alone. Another 5.4 percent qualified when their expenses were taken into account. That is, 99.4 percent qualified for Chapter 7; only 0.6 percent were presumed abusive filers under BAPCPA’s new rules. This likely explains why the percentages of Chapter 7 and Chapter 13 cases have remained fairly consistent: the vast majority of those who file for Chapter 7 meet the new strict income requirements.

It also appears that BAPCPA credit counseling requirements have had little impact on the number of filings, other than to make the process more expensive and time-consuming. The Government Accounting Office issued a report finding that “by the time most consumers receive credit counseling, their financial situations are dire, leaving them with no viable alternative to bankruptcy.” In addition, the National Federation of Credit Counseling has found that less than four percent of potential filers choose not to file bankruptcy after attending the required counseling.

As far as the overall number of consumer bankruptcy filings, while the total number of filings dropped in the first year after BAPCPA was enacted, they have steadily climbed back to their historic levels. In fact, with the current economic downturn – which kicked in less than two years after BAPCPA came on line – so many people are seeking bankruptcy protection that the filings are beginning to rival the figures we saw during the mad dash to file before BAPCPA was enacted.

Much to the chagrin of those who footed the massive bill to push BAPCPA through Congress, the numbers show that the vast majority of those who need the protection of Chapter 7 will still seek that protection – and qualify for it. The numbers also suggest the backers’ central platform for marketing BAPCPA – that people were routinely abusing Chapter 7 – was groundless, or at least greatly exaggerated.

Bankruptcy is back! – despite the efforts of the banking and credit industry to stifle filings through BAPCPA. With the help of an experienced bankruptcy attorney, you too can use the power of bankruptcy to eliminate debts that have made your life unmanageable.

In North Carolina, contact the Law Offices of John T. Orcutt, with convenient office locations in Raleigh, Durham, Wilson, and Fayetteville. The firm offers a free debt consultation, as well as affordable payment plans for both Chapter 7 and Chapter 13 cases. Call (toll free) 1-800-899-1414 or visit www.billsbills.com for more information.

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Published Tuesday, September 1, 2009 @ 1:30 pm

When your debt problems get to be more than you can handle, an experienced bankruptcy attorney can be a real life-saver. Financial problems can split up spouses, fracture families, and generate a vicious cycle of stress that leads to greater financial problems that in turn lead to more stress–and so on, and so on. It’s important to know about bankruptcy and how the process can help you recover your life, but how will it work exactly? Every case is different, but the role of the attorney will be similar in each case, and understanding what a good bankruptcy attorney can do for you may help you understand how powerful bankruptcy law can be.

The role of the attorney as expert is more nuanced than you may realize. Some people hear about friends or relatives who attempt to file or actually complete a bankruptcy filing on their own, but understanding what a good bankruptcy attorney’s expertise is all about reveals why this isn’t a good idea. First of all, every state in the United States has different laws. This means that buying yourself a generalized “How To” guide won’t be enough. Not only does a good bankruptcy attorney know and understand the local laws as they appear on the books, he will also understand how they function in practice. Who are the trustees? What is the local bankruptcy judge like? A bankruptcy attorney with experience will know the answers to these questions. Make sure to seek out an attorney who is a personal bankruptcy specialist, who has handled many cases in your area, and who is actually licensed to practice in your state.

In addition, keep in mind that bankruptcy laws, which were already complicated, became even more so with the system reforms Congress passed in 2005. In the United States, laws are made both by the legislative body that enacts them and by the judges who interpret them. Because these reforms are recent, there are many areas of the bankruptcy law that are still being settled, your attorney’s practice should be limited to bankruptcy. This is the only way to ensure that your attorney has a finger on the pulse of this constantly changing area of law.

A bankruptcy attorney with experience will know how to be supportive to his clients. He will be able to anticipate problems and propose solutions before filing your case. The attorney you choose should have an accessible support staff that responds to you before and after the filing of your case. At your initial consultation, ask lots of questions and make sure you feel comfortable working with the attorney and his staff.

Don’t be afraid to ask how much the attorney will charge you for his services. Remember that you get what you pay for. With so much at risk, it’s certainly worth the extra money to make sure your bankruptcy goes smoothly. Remember that the attorney knows you are in financial trouble–that’s why you’re calling him! Law offices that handle lots of personal bankruptcy cases are more attuned to the concerns of individuals filing for bankruptcy protection and will be better prepared to work with you to fit legal services into your budget. Don’t forget, in a Chapter 13, the majority of your legal fees will be paid through your plan, minimizing the up-front costs.

In order to pick a good attorney, it’s a good idea not to wait until the last minute. Making life altering decisions on the fly is risky for obvious reasons, so it’s a good idea to get in touch with a bankruptcy attorney sooner rather than later. If you can’t keep up with your debts, the time to call is now.

The attorneys at the Law Offices of John T. Orcutt know bankruptcy inside and out. With over 50 years of combined bankruptcy experience, we are the preeminent North Carolina bankruptcy firm. But don’t take our word for it, see what our clients have to say at www.billsbills.com.

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Published Monday, July 6, 2009 @ 11:47 am

Are you hopelessly behind on your mortgage payments and wondering what to do about it? People in your shoes typically do one of three things: (1) try to convince the bank to just take whatever the property can fetch on the market (a “short sale”); (2) just let the bank foreclose; or (3) file bankruptcy.

Many people see filing bankruptcy as the “last-resort” of these alternatives. This is a mistake. Being seriously delinquent on your mortgage carries significant, long term risks that run far deeper than just losing your home. In many cases, filing bankruptcy will actually be the best and most efficient way to manage these risks and get past this difficult episode in your life.

Consider this: if you try to convince the bank to take a short sale or if you simply wait for it to foreclose on the property, you’ll likely have to wait months and months for anything to happen. These days, banks are just sitting on their duffs when it comes to the delinquent mortgages on their books. They’re swamped with past-due accounts and have little incentive to act since they’re just going to take a loss at the end of the day. While the bank sits around doing nothing, you’ll continue to be stuck in a frustrating financial limbo. As the months drag on, the delinquent payments, late fees, and compounded interest will keep growing – along with your sense of desperation – and your credit rating will sink further and further down the tubes.

What’s more, if you go the foreclosure route, the bank may be able to sue you for the remaining balance on the loan after the foreclosure sale. And, even if the bank cancels the debt, the saga may still continue. Canceled debt is normally treated as “income.” While the federal government has amended the federal tax laws to allow people to exclude such debts from their income through 2010, many states have not followed suit. If you live in one of those states, you’ll likely have to pay income tax on the amount of the canceled debt. The same situation applies in the context of a short sale – the debt the bank cancels after the sale is considered taxable income.

Now let’s consider what filing bankruptcy can do for you. If you file under Chapter 13, you could actually save your home. Your missed payments will be spread out over a 5 year repayment period. As long as you continue making your plan payments, the lender can not proceed with foreclosure. And, if you owe more on the home than it’s worth, you may be able wipe out those burdensome second or third loans that make the property “upside down.” While a Chapter 7 bankruptcy can’t stop a foreclosure, the automatic “stay” against collection activity will at least temporarily remove the threat of foreclosure, giving you more time to work out an alternative.

Even more, whether you file under Chapter 7 or Chapter 13, you’ll address all of your outstanding debts – not just your delinquent mortgage. Chances are, you’re dealing with other unmanageable debts – like credit card debt that you’ve been forced to rack up in your efforts to pay the unaffordable mortgage. Bankruptcy can wipe out these debts – for good. It will also protect you against liability for any deficiency on the loan, as well as tax liability for any canceled debt. And, as soon as your case is over, you can start over with a clean slate.

So if you’re dealing with a seriously delinquent mortgage, don’t just wait around hoping the bank will do something. Act now, and take control of the situation. Call a bankruptcy attorney and learn how the bankruptcy laws can help you resolve all of your unmanageable debts. The sooner you file, the sooner you can start rebuilding your credit, and your life.

In North Carolina, contact 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 Tuesday, June 30, 2009 @ 4:45 pm

In an ironic twist of fate, a company’s whose claim to fame was helping people “avoid bankruptcy” has invoked bankruptcy protection itself. Debt Relief USA, a credit counseling agency based in Texas, filed Chapter 11 bankruptcy on June 18th. And it shut down all operations. According to its bankruptcy petition, DRU is currently saddled with $5 million in debt and has only $4.65 million in assets. At the same time, the company’s business practices are under investigation by state and federal authorities.

On June 24th, the bankruptcy court converted DRU’s filing to a Chapter 7 case. In other words, the company will be liquidated. Numerous clients who had hired DRU to assist them in resolving their debt problems still have money tied up in the company. DRU’s website simply says clients will receive “information” by mail about their cases. DRU’s attorney has stated the company intends to refund client deposits, subject to the bankruptcy court’s approval.

Unfortunately, getting their money back is just the start of the trouble for the clients that DRU’s bankruptcy has left hanging out to dry. They hired DRU to take of a problem, a serious problem: resolving their unmanageable debts. That won’t happen now. What’s worse, while these desperate folks were waiting around for some results, their financial condition could have only gotten worse: debts would have just kept piling up and creditors would have just continued collection efforts – only deepening their sense of despair.

The unfortunate fate of the displaced DRU clients is a prime example of the trouble with relying upon credit counseling agencies to resolve debt problems. These agencies promise to cut a deal with your creditors. But the industry is rampant with fraudulent, fly-by-the-night operations, who do nothing but take a hefty fee and then disappear. DRU itself is under investigation for questionable practices. And, even if you find a legitimate counseling agency, there’s no guarantee you’ll see any real results.

The counseling agencies may be more schooled in negotiating with creditors, but, at the end of the day, they have no more power than you do: your creditors simply have no obligation to work with them or you. And, if you’re unable to make the payments in the meantime, you can bet the late fees, interest charges, and collection calls will continue. You also need to keep in mind that even if the agency is able to convince your creditors to forgive some or all of the debt, that may be not be the end of the story: forgiven debt is generally considered taxable income.

Ultimately, bankruptcy is the only sure-fire solution to resolving unmanageable debts. Filing bankruptcy forces creditors to stop collection activities, immediately. And, you can wipe out most or all of your unmanageable debts, for good – without worrying about potential tax liability. So, if you’re buried in debt, call a bankruptcy attorney today and learn how you can rid yourself of these burdensome debts once and for all.

In North Carolina, contact 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 Monday, June 29, 2009 @ 7:04 am

So it’s more than half way through the year now. You might be wondering how things are looking in the economy. Last year, many had predicted that the downturn would continue through the first quarter of 2009, but then we’d start to see stabilization in the second quarter and maybe even a return to growth by the summer. Well, we’re already into the third quarter, and a turnaround is still nowhere sight. The three major indicators of the economy’s condition are the rates of unemployment, bankruptcy filings, and home foreclosures. Here’s the rundown on those numbers, and it’s not pretty.

The overall unemployment rate was 9.1 percent at the end of May. Earlier in the year, some economists expressed concern that the rate might surpass 10 percent in 2009; it looks like that’s inevitable now. The unemployment rate in numerous states has already passed this benchmark figure. In fact, several states are now seeing record numbers of people without jobs. Michigan currently has an unemployment rate of 14.1 percent – the highest in the country, and the highest in that state since November 1982. South Carolina, Oregon, and Rhode Island are all dealing with a rate of 12.1 percent – the highest those states have ever seen. Other states seeing the highest unemployment percentages on record include California (11.5%), Nevada (11.3%), North Carolina (11.1%), and Georgia (9.7%).

With these sort of unemployment figures, it’s not surprising that bankruptcy filings also continue to be on the rise. In May alone, the number of consumer filings averaged 6,020 per day; the average was 5,854 in April. The number of business filings was 7,514 – an increase of 40 percent over May of last year. Since the recession took hold 18 months ago, more than 100,000 businesses have been forced to seek bankruptcy protection. At the current pace of filings, the number of consumer and business bankruptcies could hit a total of 1.5 million this year – up 400,000 from last year’s total of 1.1 million.

And then, of course, there’s the dismal housing market. Most experts agree that a turnaround in the economy is not likely, or even possible, until the housing market stabilizes. For this to happen, the rate of new mortgage delinquencies must drop sharply and the market has to purge itself of the existing delinquent mortgages. But this just isn’t happening.

As jobs disappear and ARM interest rates continue to reset, people continue to default on their mortgages. There’s also a backlog of about one million seriously delinquent mortgages that banks haven’t even dealt with yet. These days, lenders are dragging their feet for months and months before foreclosing on properties with seriously delinquent mortgages. This is partly because they’re having trouble keeping up with the high volume of accounts in default. But it’s also because they just don’t want the properties back. Banks often have little incentive to move quickly in such cases. Foreclosure is a costly process that just brings the bank a big loss at the end of the day. But these delays will simply prolong the recovery of the housing market.

So the condition of the economy continues to look bleak, and the recovery seems further and further off in the future. If you’re one of the countless Americans caught up in this turmoil, consider doing what millions before you have already done: filing bankruptcy. The bankruptcy laws were designed to help people bridge the gap in times like these. You can eliminate your unmanageable debts, take back control over your life, and make a fresh start.

In North Carolina, contact 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 Monday, June 22, 2009 @ 7:00 am

So let’s say you run into some financial troubles. You meet with a bankruptcy attorney to discuss your options. You’re thinking that, if you’re going to file, you should try to refinance your mortgage first to lower the payments and ease some of the pressure. You’re also thinking you might want to go ahead and replace that old clunker with a reliable car to make sure you won’t have a problem getting to work during your bankruptcy case. And let’s say the attorney agrees with you. Can he tell you that? It seems like the answer should be obvious. After all, he’s a bankruptcy attorney. And if your attorney thinks that these issues are important, he should be able to advise you one way or the other, right?

Well, maybe not. Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), a “debt relief agency” can’t advise a client “to incur more debt” – like, for instance, a new home mortgage or car loan – in considering whether the client should file bankruptcy. The question then becomes, is a bankruptcy attorney a “debt relief agency?” If so, BAPCPA says he can’t advise you to take such actions; if not, he can. The distinction is important for another reason: debt relief agencies must include in all their advertisements to the general public a disclosure statement to the effect that, “We are a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code.”

BAPCPA broadly defines “debt relief agency” to mean “any person who provides any bankruptcy assistance” in exchange for compensation, and carves out a list of exceptions for certain individuals and entities – attorneys not among them. The Act goes on to define “bankruptcy assistance” as any advice, counseling, or legal representation in connection with a case or proceeding under the Bankruptcy Code.

Given the sweeping definitions of these terms, bankruptcy attorneys could well be considered “debt relief agencies” under BAPCPA. This creates a predicament for attorneys in cases where it may be in the client’s best interest to incur certain debts before filing: advising the client of this could violate BAPCPA, but failing to do so could violate the attorney’s ethical obligation to assist the client in achieving the best results.

The courts are divided on this issue. The Eighth Circuit Court of Appeals is the latest to step into the fray. In that case, Milavetz, Gallop & Milavetz, P.A., a Minnesota bankruptcy law firm, sued the United States seeking declaratory relief that attorneys were not “debt relief agencies” under BAPCPA and that, if they were, both the advice restriction and the disclosure requirements were unconstitutional. The District Court agreed with the plaintiffs. But on appeal, the Eighth Circuit found the broad definition of “debt relief agency” did in fact include bankruptcy attorneys. It also upheld BAPCPA’s disclosure requirements, finding they were reasonable requirements designed to avoid potentially deceptive advertising.

However, the Eighth Circuit struck down the advice restriction as an unconstitutional restraint against free speech under the First Amendment. The court concluded that the restriction “prevents attorneys from fulfilling their duty to clients to give them appropriate and beneficial advice . . .” For example, the court explained, “it may be in the [client’s] best interest to refinance a home mortgage in contemplation of bankruptcy to lower the mortgage payments. This could free up additional funds to pay off other debts and avoid the need for filing bankruptcy altogether.”

Well, as you might expect, neither party was completely satisfied with this decision. The plaintiffs dispute the court’s conclusion that an attorney is a “debt relief agency.” The government disputes the court’s conclusion that the advice restriction is unconstitutional. Both petitioned the United States Supreme Court for review. Last week, the high court granted the petitions and will decide these issues once and for all. The outcome will be significant to bankruptcy attorneys and their potential clients, as it will directly affect the type of advice an attorney can give and that a client can expect to receive. A decision is expected during the Supreme Court’s next term.

From: 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 Sunday, June 21, 2009 @ 9:35 pm

Bernie Kosar is a household name, known for his star football career during the 1980s and 1990s. Kosar quarterbacked for the University of Miami and led the team to its first national championship in 1984. After college, Kosar jumped right into the NFL and played as a successful quarterback for the next 12 seasons. Kosar spent most of those years with the Cleveland Browns, from 1985 to 1993, where he became a favorite of team fans. In fact, Browns fans were enraged when former coach Bill Belichick replaced Kosar with Vinny Testaverde; soon thereafter, Belichick was replaced himself.

Kosar went on to play for the Dallas Cowboys, and is credited with helping them win an NFC championship against the San Francisco Giants. He played his final season with the Miami Dolphins in 1996. Kosar devised the famous “spike play” that Marino used so successfully against the Jets that season.

Kosar retired to the posh Windmall Ranch Estate in Fort Laurderdale, former home to Dan Marino. Kosar moved into a 9,900 square foot home with seven bedrooms and seven-and-a-half bathrooms. The home sits on an acre lot and has an estimated value of $3.5 million.

Kosar stayed active in football after his retirement. He became president of the Cleveland Gladiators, an Arena Football League (AFL) team. Kosar led the Gladiators to the semi-finals in 2008, their first season. Unfortunately, the team reportedly lost $2 to 2.5 million along the way. During this time, Kosar also reportedly borrowed $725,000 from Jim Ferraro, the team’s owner. The AFL has suspended play this season, for the Gladiators and the rest of the league.

Kosar’s struggle with the Gladiators is one of several setbacks he’s experienced over the last few years. In 2007, his wife, Babette J. Kosar, divorced him. This led to a dispute over some of their combined debts. In a statement to The Plain Reporter around this time, Kosar said: “Divorce is difficult enough as it is, especially for someone who wasn’t really looking to do that.” So, who owes what and all of that becomes hard, but whatever I owe, obviously I would pay.”

But things quickly went downhill from there. Kosar’s major business and real estate investments collapsed as the recession took hold. Last November, his steakhouse restaurant in South Miami folded. Earlier this year, Florida Bank foreclosed on two apartment buildings in Florida that Kosar owned as commercial property through private companies. In connection with those proceedings, Kosar’s companies were hit with a combined judgment of more than $6 million. Florida Bank has also commenced foreclosing proceedings on another of Kosar’s commercial properties in Florida.

This was all just too much, and Kosar filed Chapter 11 bankruptcy this past Friday. In the petition, he listed his assets as between $1 million to $10 million, and his debts as between $10 million to $50 million. As part of this debt, Kosar owes $1.5 million in unsecured claims to his former NFL home team, the Cleveland Browns. He also owes almost $10 million total to Florida Bank, his commercial real estate lender. On top of this, Kosar owes: $3.1 million to Key Bank National Association of Cleveland; $3.04 million to his ex-wife, Babette J. Kosar; $725,000 to Jim Ferraro (a debt Kosar now reportedly disputes); more than $300,000 in federal tax liens for unpaid personal income taxes; and almost $60,000 in unpaid property taxes on his Weston home.

Kosar’s bankruptcy is a sign of the times, as millions and millions of Americans struggle with financial setbacks. Indeed, Kosar is just the latest in a long list of professional athletes and celebrities to fall on hard times and need the protection of the bankruptcy laws.

If you’re dealing with unmanageable debts, it’s time to learn how bankruptcy can help you weather this storm. Call a bankruptcy attorney today. In North Carolina, contact 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 Saturday, June 13, 2009 @ 10:32 am

We have put a lot on the blog about how your home can be affected by bankruptcy. Hopefully, you’ve read through some of those posts. If not, simply do a search to find as much as you can about the topic because knowing how bankruptcy affects where you lay your head down at night can be very helpful to you and your family.

To continue on the topic, let’s talk about the Homestead Exemption. It can be a little confusing and this post will touch on the general aspects of it and the specifics can (and should) be left for your face-to-face meeting with one of our attorneys.

Homestead exemption laws are in place to shield your house from creditors who do not have a lien on it. In other words, your credit card company can’t come after it. The amount of value placed on your home is based on its equity. If the market says your home is worth $200,000 and you owe $180,000 on the mortgage, your equity is $20,000. Pretty simple math.

Different states have different numbers for the amount of the exemption. So, if you are in a state where the exemption is $20,000 or more, your only concern is the mortgage holder. Thus, one of the best questions you can put on your list when you meet with your bankruptcy attorney for the first time is: “What is the state’s homestead exemption?” In North Carolina, it’s $18,500 per owner. (But that is not all you need to know about it; so still ask the question!)

In most states, the amount of the exemption is limited. Some states in the South and Midwest, however, have unlimited homestead exemptions, including Texas, Florida, Iowa and South Dakota. However, even in those states, if you acquired your home within 1,215 days of bankruptcy, you are limited to protections of only $125,000.

Here’s another confusing aspect of the homestead exemption laws: some states allow you to choose either their state’s exemptions or the federal government’s exemptions under the Bankruptcy Code. North Carolina does not, however. You are subject to the state’s rules. Also, you need to have been a resident of your state for at least two years to claim the exemption in your current state. However, if you have not lived in your state for two years, you are subject to the exemption rules of the state in which you lived 180 days prior to filing.

As some people have done, never try to leverage the homestead exemption by quickly buying down your mortgage in order to create more equity. The amount of the exemption can actually be reduced by whatever amount of equity a person tries to create intentionally as a way to hamper creditors ability to collect from you. So, let’s say things were starting to get bad for you and the creditors have found your phone number. You decide that a bunch of cash you have from a recent windfall will be better spent buying into your mortgage instead of paying off the delinquent boat loan. If you then file for bankruptcy within a few weeks, your homestead exemption will be reduced by that amount.

The homestead exemption is one of the more challenging bankruptcy concepts to grasp at first, which again, is why you should make sure to ask your bankruptcy attorney about how it will affect you. In the end, it’s all about protecting your home. While you may have made some spending errors along the way, they are certainly not worth losing your home.

Live in North Carolina and need to find out what your rights are. Contact the bankruptcty attorneys at the Law Offices of John T. Orcutt, experienced attorneys offering a totally free and confidential consultation and serving 28 counties in N.C. (See list at www.billsbills.com/offices.php. To make an appointment for a free consultation, during normal business hours, call toll free 1-800–899-1414, or make an “online” appointment by visiting our website at www.billsbills.com.

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Published Thursday, June 4, 2009 @ 5:45 pm

Many people delay filing for bankruptcy or decide not to hire a bankruptcy attorney solely because they believe they can’t afford it. If you’re considering filing for bankruptcy, money is obviously tight. You may be thinking that it doesn’t make sense to try to solve debt problems by spending more money. However, if you are in serious financial trouble and have no way of getting out, a bankruptcy may very well be a necessity. And if you need to file for bankruptcy, you definitely need a competent bankruptcy attorney who understands the new law and how to best provide for your fresh start.

Delaying a bankruptcy when it is the best solution is a bad financial move, and so is trying to file without a lawyer. Not only will you likely run into trouble if you attempt to file by yourself, you may make a fatal mistake in your case, such as failing to recognize a non-exempt asset. Such a serious error can put you in a far worse position than if you had simply hired an experienced bankruptcy attorney.

Still, if you are ready for a fresh start with your financial troubles, it is natural that you are leery of incurring further expenses. Funding the bankruptcy responsibly and avoiding unnecessary costs are plans worth pursuing.

First, you should keep in mind that a bankruptcy attorney understands your situation and will work with you to figure out how you can structure your bankruptcy so that you’ll be able to pay for legal fees. If you file for Chapter 13 bankruptcy, your attorney can advise you on including the costs of bankruptcy in your Chapter 13 plan payments.

You should definitely look for a bankruptcy attorney who will offer you a free or very low cost initial consultation. At the consultation, the attorney will be able to assess your situation and offer suggestions about managing the costs of filing for bankruptcy protection. However, don’t expect that he’ll be able to quote a total fee at the consultation: every bankruptcy is different, and they have only become more complicated since Congress reformed bankruptcy law in 2005.

One potential source to fund your bankruptcy costs is your tax return. If you get a big return, the money will be much better spent on resolving your debt problems permanently, rather than trying to catch up to creditors when the race is futile. Don’t mull it over, either — even before you get your return you should consult a lawyer and start making plans to file. That money will be gone in no time!

You might also consider asking your family or friends to help you fund the bankruptcy by gift or loan. If considering this option, remember to be up front with your plans so as to avoid any strained relationships.

If Chapter 13 is your best option, but you are unable to afford your plan payment on top of your monthly living expenses, consider taking on a part time job or seeking additional forms of monthly income. You might also consider taking in a roommate or cutting back on cable, telephone or other unnecessary expenses. Other options for funding the bankruptcy are selling non-essential property (always for fair market value), or asking working-age children to take on an extra job.

Finally, keep in mind that once you have made the decision to file, it is unnecessary to continue throwing money away to your unsecured creditors. Think of all the money you’d be saving if you weren’t struggling to pay all of those monthly minimums. For many people, that savings alone is more than enough to fund the entire cost of the bankruptcy.

Don’t think of bankruptcy costs as just another expense–this one is an investment in your future.

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Published Monday, June 1, 2009 @ 12:30 pm

Your “Golden Years” are supposed to be the best time of your life. You shouldn’t be worrying about bills, going to work, or holding an “upside-down” mortgage. These years are supposed to be the fruit of your life’s labor, and you should be able to enjoy them – or least not have to juggle the kinds of responsibilities and concerns you did in your 20’s and 30’s. Until recently, with a modest amount of planning and investment toward retirement, this was a reachable goal for most Americans.

Sadly, the economic conditions of the last 10 to 15 years have increasingly strained the budgets of seniors. Most people in their retirement years are on a fixed income, determined some years before they actually retire. But the cost of goods and services keeps rising, and the rate of those increases has outpaced the earning capacity of most seniors. This has meant that people who had planned to have their mortgages paid off are still left with a high principal balance at retirement. In addition, the medical services seniors need as they grow older keep getting more expensive every year, often causing a pile-up of unexpected (and unaffordable) medical bills.

This situation has forced many seniors to rely on credit cards to pay for things – including simple necessities. While in the past they may have been able to draw from the equity in their home to cover their expenses. However, with the housing bust, this is no longer an option for many. Continuing to work beyond retirement age is becoming more common. But in an increasingly brutal job market, seniors are often the first to be laid off, and the last to find new employment, Accordingly, seniors are slipping further and further behind. According to a September, 2008 AARP study, almost 700,000 seniors (about 28% of all homeowners) were either delinquent on their first mortgage, in the process of foreclosure, or had already lost their homes.

Filing bankruptcy is often the best option for those suffering with these sorts of financial problems. Indeed, the bankruptcy filing statistics show many seniors have begun taking advantage of the bankruptcy protection. Over the last decade, the filing rates for individuals 75 to 84 years of age has increased over 400%. For those between the ages of 65 and 74, the rates have doubled during this time. In 2007, 23% of those who filed bankruptcy were 55 years or older. And, as the economy continues to decline, and our nation’s elderly population continues to grow, bankruptcy protection will increasingly be utilized to protect the assets and livelihood of senior citizens.

Don’t struggle to make ends meet one more day. If you are a senior worrying about your debts, call a bankruptcy attorney now and learn how bankruptcy law can protect you and your retirement.

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Published Tuesday, May 26, 2009 @ 11:45 am

You’re ready to seek professional help from a qualified bankruptcy attorney.. Now what? What should you do to prepare for your first meeting with your prospective attorney?

Step One: Quit Digging

You know the old saying about how to get out of a hole; the first step is to stop digging. Your decision to consider bankruptcy should not be accompanied by a last minute spending spree. If nothing else, this period can be a good time for you to practice a financially conservative mode of living.

Step Two: Document Your Debts

Call your prospective attorney and ask for a pre-interview questionnaire. If the attorney has any experience in bankruptcy law, he will provide a questionnaire containing numerous questions about your debts, income and assets. Answering the questionnaire will force you to take an honest inventory of all of your outstanding debts. There’s nothing to be ashamed of or worried about in cataloging who you owe money to. Your attorney needs to know the extent of your debt in order to decide the best course of action.

Step Three: Document Your Income

Just as your detailed accounting of your debts is important, so is the amount of money you’re bringing in. Also provide details about changes in your employment, such as a recent layoff or reduction in hours. This will help your attorney understand the big picture of your financial life, and how you can make the most out of bankruptcy.

Step Four: Document Your Assets

Make a list of everything you own which might be a potential source of income if sold. For example, list any large items such as your home, car or boat which you either own outright, or if you have a loan, list how much the payoff amount is. Then consider any other unusual property items which might be of value, such as antique collections, artwork, expensive tools, or livestock.

The purpose of listing your assets is not because they will be sold in the bankruptcy. In most cases, any assets you own are probably worth less than state exemption allowances, and so they will not be at risk in the bankruptcy. By informing your attorney of the full extent of your assets, you can be fully advised what might be at risk, as well as what steps can be taken to protect even non-exempt property.

Step Five: Get Ready to file

With the information detailed above, you’re ready to move forward with your bankruptcy. Understand that you are not alone in the process. Your attorney will help guide you step by step so that you can make the most of your fresh start. Serving North Carolina residents, the Law Offices of John T. Orcutt has helped thousands of families get back on track. Call today to set up your free initial consultation. 1-800-899-1414

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Published Tuesday, May 26, 2009 @ 8:38 am

It looked like the high tech industry was going to dodge this economic downturn. Industry hot spots like North Carolina’s Research Triangle (the Raleigh, Durham, and Chapel Hill area) and Northern California’s legendary Silicon Valley remained fairly secure throughout most of last year. While other major regions around the country saw big declines in every sector, the high tech areas continued to see job growth and stable housing prices. They were, it seemed, “recession proof.” Until the fourth quarter, that is.

Growth in the high tech industry came to a screeching hault in the fall of 2008. The problem? The major players in the industry had pretty much spent all of their venture capital funds. A few years ago, it seemed venture capitalists were clamoring to fund new research and development projects in the tech industry. Not anymore. Given the current state of affairs in the economy, venture capitalists – like most people – are holding back and waiting for these things to restabilize before making more investments.

Without the necessary investment funds, the high tech areas were quickly swept up into the financial turmoil wreaking havoc around the country. The rates of bankruptcy, foreclosure, and unemployment spiked in the fall, and have continued to climb since. By now, those rates are some of the highest in the country.

For example, in North Carolina, the unemployment rate has doubled since this time last year, to a record of 10.7 percent. In raw numbers, this figure means almost 200,000 people have lost their jobs. Twenty percent of those losses came out of the Research Triangle. In Santa Clara County (the situs of Silicon Valley), bankruptcy filings shot up 59 percent over the last 12 months, and experts predict the rate will continue to climb. The once-booming high tech neighborhoods of Boston are also getting a hard dose of the current economic reality: the number of foreclosures in the area has tripled since last summer.

And you’d probably be surprised to hear that the layoffs are coming from industry powerhouses, like Microsoft, Apple, Yahoo, Intel, Sun, Hewlett Packard, and . . . yes, even the once apparently-infallible Google. Indeed, things have taken such a dramatic turn for the worse that community service centers in Silicon Valley are literally handing out food to people who used to earn six-figure salaries and live in million dollar homes.

It took a while longer for the high tech industry to feel the effects of the current downturn, but it happened, and now the industry is caught up in the full grips of the recession. Fortunately, those caught up in the industry’s current woes have the same relief available to them as those whom the recession hit much earlier: bankruptcy protection. Bankruptcy has already helped millions of people weather this storm, as it always has in times of economic turmoil.

In fact, those living in the Research Triangle area have a preeminent bankruptcy resource right in their own backyard: The Law Offices of John T. Orcutt is the largest consumer bankruptcy law firm in the state of North Carolina. The firm has helped tens of thousands of people — from all walks of life — use the bankruptcy laws to solve their financial problems and make a fresh start. It has convenient office locations in Raleigh, Durham, Wilson, and Fayetteville. 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 Monday, May 25, 2009 @ 8:25 am

Filing bankruptcy is one of the most significant financial decisions a person can make. It has the ability to transform your life. But to take advantage of the full potential bankruptcy has to offer, it is vital that your case be handled with the utmost care and attention. That’s why it’s so important to find an experienced bankruptcy attorney with a proven track record of success in helping people achieve their goals.

If you’re in North Carolina, The Law Offices of John T. Orcutt is your answer. This is the largest debtor bankruptcy law firm in the state. John Orcutt has practiced bankruptcy law since 1985. He and the firm’s lawyers have a combined experience of 40 years in practice, and they’re devoted exclusively to representing debtors in bankruptcy. Over the years, the firm has helped more than 30,000 clients free themselves of 10’s of millions of dollars. For example, in just 12 months, the firm helped more than a thousand families shed over $39,000,000 in debt. That’s an average of $38,000 per family!

Not only does the firm have an impressive track record of success, John Orcutt and his staff run a highly professional and collegial operation, where clients can feel at home. Look at what one client had to say about the firm’s handling of her Chapter 7 case:

“Dear Mr. Orcutt:
Thank you so much for your help in expediting my bankruptcy case. Seeking legal advice was a difficult decision for me to make, but once I acknowledged my business failure and my inability to make debt consolidation payments (a well-meaning but ill-advised course of action on my part), it was the start of my financial turnaround. I saw your TV commercial and visited your website. It was very informative, and after reviewing much of the content, I made the decision to set up an appointment at your Raleigh office. The whole process, from initial consultation to discharge, took just six months. I received my discharge in December, the best Christmas present I could ever have.
I would especially like to thank Cynthia, Missy and Simona for their professionalism and courtesy in guiding me through the process. Thank you again, and best wishes for success.”

And here’s what a husband and wife had to say about their Chapter 13 experience:

“To John Orcutt’s staff:

We’d like to thank you and the law office for all of the hard work and time you put into getting our case prepared. We have been able to get some sleep, it was beginning to take a toll on my health.

We had to check our phone to make sure it was working. We had not heard it ring in a while. We have started working with our plan.

You have helped us when we had really given up. It has really made Jerry become better organized and I like that he appreciates things better. Words can never express our feelings. We are just excited that we have been given the opportunity to correct our problems and mistakes.

I was ashamed at first but it’s better to admit when you are defeated and clean up. We tried for so long and hard. Your ears should be burning because we speak of you at least once a day.

Thanks again for helping us.”

The Law Offices of John T. Orcutt offers a free debt consultation, as well as reasonable and affordable payment plans for both Chapter 7 and Chapter 13 cases. It has convenient office locations in Raleigh, Durham, Fayetteville, and Wilson. So, if you’re in North Carolina, call today and learn how the firm can help you take back control over your life. Call toll free: 1-800-899-1414. Visit www.billsbills.com for more information.

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Published Thursday, May 14, 2009 @ 7:00 am

So you’ve decided to file bankruptcy. You might be wondering if you need to hire an attorney, or if the process is simple enough to do on your own. In theory, you could file the case on your own, and some people do. The problem is, your financial situation is unique. Following a generic bankruptcy “how-to” guide can actually leave you in a far worse position than you were before filing.

To take advantage of the full potential bankruptcy has to offer, it is vital that your case be handled with the utmost attention to the laws that govern bankruptcy and their application the complex facts of your individual situation. Failure to understand and properly apply the rules could deprive you of many of the rights and benefits the bankruptcy laws were designed to provide – and could even result in the dismissal of your case.

For instance, did you know that failing to list an asset in your case may result in the loss of the right to claim the property as exempt from the bankruptcy? “Asset” is broadly defined and includes all types of property, such as stocks, bonds, investment accounts, tax refunds, proceeds from a lawsuit, etc. If you are not extremely careful to list all of your assets, you may inadvertently create an impression that you are trying to hide property from your creditors- a potentially fatal error for your case.

Even if you have listed all assets, do you know which property is exempt from the bankruptcy estate and how to claim those exemptions? Understanding and properly applying the exemptions is crucial to keeping your property. The available exemptions vary from state to state, and depend where you have lived in the past 2 and 1/2 years. If you fail to select the right ones or fail to apply the rules properly, you could end up losing property you otherwise would have been able to keep.

Also, how will you respond to questions or objections from the trustee regarding your case? You could seriously undermine your case by responding without a complete and thorough understanding of your rights and obligations in the process. Being prepared to handle these objections is particularly important if you’re planning to file a Chapter 13 bankruptcy, since recent changes in the law have made filing under that chapter incredibly complicated.

Hiring an experienced bankruptcy attorney to assist you in this process is a wise decision. Doing so will not only help you avoid pitfalls that could seriously undermine your case, it will help you maximize the benefits bankruptcy has to offer you. Given the importance of bankruptcy to getting your life back on track, this is undoubtedly a worthwhile investment. With offices in Raleigh, Durham, Fayetteville, and Wilson, count on the the Law Offices of John T. Orcutt to be your bankruptcy guide.

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