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 Tuesday, February 2, 2010 @ 2:30 pm

Many of our clients automatically assume they will lose their rental property if they file for bankruptcy. Isn’t that the whole idea of bankruptcy? That you give up everything you have, with a few exceptions, in exchange for getting the debt collectors off your back?

Well, no. Many factors come in to play in determining whether or not you will be forced to sell your rental property, including whether you file chapter 7 or chapter 13, how much money you owe on the property and how much income you receive from it.

Let’s start with chapter 7. If you file chapter 7, you get an exemption for the equity in your primary residence – how much depends on the state you live in – but rental property doesn’t qualify for the standard residence exemption. Therefore, you will only be able to protect the property from sale if you can cover it under your available wildcard exemption. The North Carolina wildcard exemption is $5,000.00 per filer- not much. However, your state may have additional protections if you own the property jointly with your spouse. In North Carolina, if you own the property jointly with your spouse, the property is only subject to claims of joint creditors. If all of your debt is in the name of one spouse or the other, the property may be protected- regardless of the amount of equity. Talk to a experienced bankruptcy attorney, who can examine how you hold title and if you have any joint debt.

But what if you don’t have any equity in the house, or minimal equity? What if, for example, the house is worth $100,000 and you owe $120,000, or even $99,000? The trustee’s job is to determine whether or not there is money for your creditors, not to take away everything that belongs to you. He will determine the property’s worth, then subtract the projected sales costs, selling it and paying taxes on the proceeds. If it’s not worth the trustee’s time and effort, it’s unlikely that he will try to sell it.

With Chapter 13, there are additional caveats and concerns. In general, you should be able to keep your rental property in a Chapter 13 filing. In fact, since the rental property is not your primary residence, you might be eligible for cramdown under chapter 13 – meaning that if you owe more than the property is worth, the bankruptcy judge is able to alter the terms of the mortgage to reflect the property’s current value rather than the amount you originally agreed to pay for it. This could lower your monthly mortgage payments, as well as the long term amount you have to pay to the bank for the property. Cramdown isn’t allowed on primary residences, but it is allowed on other secured debts, including rental property.

Do note, however, that rental property can, under certain circumstances, cost you money. The trustee in a Chapter 13 case will look at all the costs associated with the property – your mortgage payments, plus taxes, insurance, upkeep and repairs. If these costs outweigh the income the property brings in, the trustee may object to your plan on the basis that the money you’re spending on the property should be distributed to your unsecured creditors. In such a case, surrendering the property may be your best option. However, this is a very fact-sensitive issue and depends on how your jurisdiction interprets very complex provisions of the bankruptcy code. Only an experienced bankruptcy attorney can advise you on your specific situation. Bottom line- if you’re deeply in debt, talk to a bankruptcy attorney and get the real facts. In North Carolina, call the Law Offices of John T. Orcutt. Convenient office locations in Raleigh, Durham, Wilson and Fayetteville. Call today: 1-800-899-1414 or visit www.billsbills.com for more information.

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Published Monday, February 1, 2010 @ 4:46 pm

You may have read on the blog, or elsewhere, that many are calling our current economy a “middle class recession.” This is because the numbers are way up on bankruptcies filed by those who make more than $60,000 per year, up 6.9 percent from 2008. Bankruptcies on the whole are up 36.5 percent from this time last year.

So why does it matter how much money a person makes when filing bankruptcy? Well, because bankruptcy is often considered an escape route for the financially unreliable or worse yet, “something poor people do.” It’s just not true.

Today, bankruptcies are increasing among people in the real estate profession, namely developers and agents. When the housing bubble dissolved, so did the incomes for a lot of American families.

There are different types, or “chapters” of bankruptcy for a reason. Basically, some versions are better suited to different situations. Chapter 7, for example, is typically filed by those who may have lost a job or for some reason may not have regular source of income. It wipes out all debts, but also mandates a person dispose of their “non-exempt assets” as a way to repay creditors to whatever extent possible. If you have equity in property beyond available exemption limitations, you may have a “non-exempt asset”.  Many states’ exemptions, as well as the federal exemptions, provide some measure of protection for everything from your home to retirement accounts. It is not often the case that a family has assets beyond what available exemptions can protect.  Even if available exemptions do not cover all of a person’s property, Chapter 13 provides a way to pay the equity above available exemptions to unsecured creditors, so that a person may keep his property, if he can afford to do so.

For those who are still earning a living or at least have a source of money, Chapter 13 creates a three- to five-year payment plan. Your plan payment will largely consist of secured debt, like your car and mortgage payments. Because the plan payment can include your attorney fees, Chapter 13 is an attractive option if you do not have enough up-front money for Chapter 7 attorney fees.

Maybe you’re giving some thought to a debt-settlement firm instead of bankruptcy. Sure, it’s natural for you to want to negotiate your way out of debt. Unfortunately, many of these companies position themselves as an alternative to bankruptcy that will save your credit. More often, however, these debt settlement companies end up doing far more damage to your credit than if you had simply filed for bankruptcy from the start. Remember, just because you’re in a “debt-settlement” program, your creditors will continue to report your missed payments to the credit bureaus. A bankruptcy, while causing an initial hit to your credit score, will stop the negative reporting and allow you to rebuild your credit score faster.

Bankruptcy is an organized, legal process with pre-defined results. Debt settlement firms function under very little regulation and ask for payments before all the debts are settled, therefore the incentive to settle the debt is not as strong as if they were paid based on results or after everything is taken care of.  Thus, your “debt settlement” is by no means guaranteed.

And one more point on debt settlement agencies: the IRS considers forgiven debt as taxable income. In contrast, debt erased as part of a bankruptcy is not taxable.

Another important point about bankruptcy has to do with timing. It’s key that you don’t file too early or wait too long. Start by simply adding up what you owe and making a simple estimate on what it would take to pay it off yourself. If the discrepancy seems impossible to make up, or would force you to sacrifice your family’s needs just to make a dent in your debt load, then consult an experienced consumer bankruptcy attorney.

On the other hand, don’t wait until the car has been repossessed or the foreclosure notices start arriving. Use your head, remain calm, and speak with an attorney. The bankruptcy concept itself is fairly straightforward.  The process however, requires a good deal of legal expertise.  Engage it wisely.  Take time to understand the basics of filing.

From the Law Offices of John T. Orcutt.  Helping families through bankruptcy since 1995. Call today to set up a free initial debt consultation in one of our 4 convenient office locations. 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 Tuesday, December 29, 2009 @ 6:52 pm

Have the credit card companies ‘jacked-up’ your rates, doubling your payments?

And really stuck it to you and your family?

Now, you’re screwed for sure…right?

Where is the money gonna come from to make double payments?

You can’t just ask your boss for a raise because you need more money…can you?. So, you have to try to pay with what you have.

The problem is that every dollar you pay is a dollar you steal from your family.

And…to make things worse…

Have they lowered your credit limits, putting you “over limit” for no fault of your own, so now they can soak you for outrageous “over the limit” fees?

And, these are on top of the already outrageous “late payment” fees.

All tactics designed to gouge out of you as much money as possible.

What’s fair or right about that?

And…adding insult to injury…have they changed your credit card from a “fixed rate” to an “adjustable rate”?

That’s not right.

What they did might be legal under the law, but just because something’s legal, don’t make it right or fair.

Just because you can…doesn’t mean you should.

But they did it anyway. It’s like the banks are telling you “Screw you. We want more money. So just pay it and shut up.”

Angry? You should be. Real angry?

The only good news is that you are not alone. They have done it to millions, if not tens of millions, of good, hard working Americans.

The only question is “What are you gonna do about it?”

Want to know why they did this to you?

The answer is simple.

Greed….to make as much money off the back of you and your family as they can…while they can.

Congress passed a new Credit Card Reform Bill of 2009. This bill was intended…so they say…to ‘rein in’ the credit card companies, that is, the big banks who issue credit cards to tens of millions of Americans.

For decades, the big banks had been suckering us Americans with the lure of easy credit, full well knowing that we would get in debt and stay there…good news for banks who live off of interest and fees, and all the more so as they more and more jacked up the interest rates, shortened the grace periods, and made a fortune charging higher and higher extortion-level “over limit” and “late payment” fees.

And, everything was working just fine…like the banks planned…until they completely screwed up the financial market and forced Congress to spend our money on huge “bailouts”.

All of a sudden, the banks were in trouble and some Congressmen saw this as a one-time opportunity to try to clamp down on the nasty credit card tactics, a chance to put a stop to some of the now well-known and abusive credit card company shenanigans. As a result, a credit card reform bill was passed and signed into law.

On its face, the credit card reform bill looked great. For example, there are provisions to make it illegal to change your interest rate on existing balances.

Sounds good…right? Wrong!

Long before the bill ever went to the President for signature, it was stuffed full of holes…err ‘loopholes’.

The biggest loophole lies in the fact that the bill does not even go into effect until 2/22/10. This delay provided the big banks more than enough time to do all sorts of things to sidestep the new bill, to protect themselves and to make even more money. In effect, the big banks have turned the credit card reform bill into nothing but a big joke.

One of the things they did was…across the board…to jack up everybody’s interest rates.

How did this happen?

What went wrong? What happened to the credit card reform bill? How did it get full of holes in favor of the big banks it was meant to rein in?

Easy. The banks were able to exert enough influence to get a number of key provisions taken out of the bill and others changed, including the date when the bill would go into effect…2/22/10.

Are you surprised? Don’t be.

The truth is that the big banks have been in control of this country since the Constitutional Convention, when America first became America. They were in control, they are still in control, and they will always be in control. And, being in control, they are, in effect, also in control of Congress.

Unfortunately, the vast majority of Congressmen need bank contributions (read “money”) to pay for election campaigns. But there’s a price to pay for this money. And, that’s where the golden rule comes in: The banks are the guys with the gold and the guys with the gold get to make the rules. The banks have the money the Congressmen need.

And, just to make sure they are heard, big banks spend a ton of money on lobbyists to try to bully some Congressmen, and brainwash others. And that’s just the tip of the iceberg in terms of the influence that banks have over Congress.

The price to pay is that the banks get to help write the rules (read “new laws”)…or in this case…the credit card reform bill.

At the same time, this time around, the big banks knew they had screwed up the entire financial market, and so much so that it forced Congress to spend OUR money to bail them out. But, they also knew that the bailouts were not popular at all with the voting public. And they knew that most Congressmen would be feeling the heat from the bailouts and that, as a result, these Congressmen would be feeling the need to at least put up a showing that the banks were being punished. Not doing so, the big banks knew, these Congressmen would suffer the wrath of the public in the next election.

So…the big banks knew…something had to give, that there would be a price to pay for the bailouts, and part of the price came in terms of the new credit card reform bill.

Or so it would appear to the public. Unfortunately, appearances don’t necessarily reflect reality, and that is exactly what happened to the credit card reform bill.

Even with all the problems the banks had caused to our economy, the big banks still, in effect, had massive amounts of influence over Congress. And, controlling Congress meant that the big banks could get things changed in the proposed credit card reform bill. And, so it came to pass, and the banks got most, if not all, of what they wanted, a bill so watered down with loopholes that it was, in effect, turned into nothing but a joke on the public.

Basically, as it turns out, the new credit card reform bill is just another SCAM by the big banks.

In effect, a lot of the current credit card reform bill was written by the same big banks it was meant to rein in.

Congressmen and the banks both got what they wanted. Congress got to look like it did something to punish the banks, and the banks got a bill that they would work around.

Depressing? Disappointing? Frustrating? I agree.

With the major provisions of the bill delayed until 2/22/10, the big banks got busy changing things necessary to completely sidestep the bill.

And, that’s were the rate hikes, lower credit limits and adjustable rate credit cards come in.

The banks knew that, under the new law, they wouldn’t be allowed to so easily change things in the future regarding credit cards. But, nothing in the bill kept them from doing it now, before 2/22/10, and being the big banks they are, that is exactly what they did…to you and to me.

First, they jacked up your credit card interest rates. Then, they lowered your credit limits, and then, they did other things like changing your credit card contract from “fixed rate” to “adjustable rate”.

The net effect: Passage of the credit card reform bill, instead of helping you, actually hurt you…and hurt you bad.

The upshot was that millions of good, hard working Americans, just like you, quickly received notices jacking up their rates, lowering their credit limits and changing their credit card contracts from “fixed” to “adjustable rates”.

The real bottom line is that if you were just staying afloat before…and just making ends meet…now you were screwed.

Who can have their payments doubled and survive?

What always gets me though….is why so many Americans just sit there and take it?

I am always asking myself: “Why are people not more pissed off? Why isn’t everybody angry at the banks?”

Is it because people feel helpless against the giant bank? I can understand that. Most of us aren’t bankers and we don’t know what to do or if there is anything we can do.

Is it because what the banks are doing is allowed under the contract you signed with them? I don’t know if you have ever looked closely at a credit card agreement, but it you have, you know that it is long and complicated and full of good stuff to let the banks do just about anything it wants to pull the rug right out from under us.

Is it because the things the banks are doing to us aren’t illegal? I would hope not because where I come from, just because you can get away with it, don’t mean it’s right. And, there ain’t nothing ‘right’ about jacking up interest rates, doubling payments, and screwing families.

Or is it because, as Americans, we have gotten so far removed from having to fight for our rights, so tame and domesticated that we don’t even have any fight in us? Instead, like the tame and domesticated farm animals we have become, we depend on a Congress and our President to fix things and protect us. How is that working out for you and your family? As Americans, we hafe been like cows being lead to slaughter.

This has got to stop!

Whatever the reason is, what the banks have done is NOT RIGHT, and the bottom line is this:

What are you going to do about it?

If you answer is “nothing”, you can stop reading right here, right now.

But, if you are as pissed off as I am, and have had enough, and need to make sure your family survives no matter how bad things get (and things will get worse before they get better), and want to fight back,….read on.

The truth is that with hiked rates and doubled payments, many of us will either have to do something or see our families suffer and submerge.

Let’s face it. We only have so many dollars and every dollar we send to the credit card companies is a dollar we can’t spend on our families, and which comes right out of the mouth of our kids.

I don’t know about you, but that is not what I intend for my family…and it just pisses me off.

How about you?

As it is, our grandchildren’s, grandchildren will still be paying for the bank “bailouts” forced on us by Congress, and now… to make things worse… the banks are throwing salt in our wounds by jacking up rates and screwing with us.

I don’t now about you, but I sure as hell don’t intend to just sick back and take it in the face when the credit card companies treat me this way, whether what they are doing is legal or not.

And, to make it worse, the banks aren’t even honest with us. Instead of telling us the truth, they trump up this and that to justify screwing us. And even when we didn’t do anything wrong, they make up stuff, for example, referring to defaults or late payments that never happened.

It makes me sick and it makes me angry. Is it just me, or are you angry too?

Why don’t they just tell it like it is? If they did, it would likely sound a lot like this:

“We are in the business of making money. That’s why we exist. That’s what it’s all about. That’s all there is to it. Nothing personal, but we’re in it for the money and we always have been.

We don’t care about you. We never did. If, on occasion we come across like we do care, we’re only pretending, either because we know that being nice to you will keep you paying or because being nice to you is in our best interest, not yours.

In fact, you are so brainwashed by your moral upbringing that you go on expecting us to act differently. You just never get it. Being fair or just or helpful or honest or putting your best interest first is just not our nature as a bank.

On top of that, you signed a contract with us that lets us do whatever we want to you. In effect, the contract is only binding on you. The truth is that it’s a joke that it’s even called a contract. A true contract would assume that both sides had a hand in coming up with the terms. Instead, it should just be called “Our Rules”. Yeah, the golden rule: We have the gold, so we make the rules.

And, under that contract, we have the right to do anything we want, including raising your rates and screwing you in ways you can’t even imagine.

And, we do it because it makes us more money. Did we mention that it’s all about money, money and more money? It doesn’t matter. We can say it’s all about money and you still don’t get it. You still think our relationship is about honesty and fair dealing. It not. It’s about money, taking your money and giving it to us.

Furthermore, experience has shown us that we can treat you as badly as we want and get away with it every time. To us, you are not human beings or families. You are just numbers and profit. And, since you are just numbers and profit, we can screw you and still sleep at night, just fine. In fact, those of us who make the big decisions don’t even live in your communities, and even if we did, you don’t know who we are. And you think that just because we have people working in your community, that makes a difference. It doesn’t. They do what we tell them. Sure, part of what we tell them is to be nice to your face, but we don’t mean it. We just say it because we make money off of you, lots of it.

Oh, sure, a few of you will stomp and complain and maybe close your accounts with us when we treat you badly, but we have everybody so brainwashed that ‘credit is king’ that most of you will put up with just about anything we do to you if it means that your credit score will be ok..

What’s really wild is that most of you won’t even get mad at us and the few of you who do won’t be able to convince the others to get mad. In fact, you’re so brainwashed that most of you will blame yourselves for getting into debt in the first place. How cool is that? We have spend our careers figuring out how to legally trick you and cajole you deeper and deeper into debt, so much so that you are trapped forever, and still you don’t blame us. Instead, you blame yourselves, and feel so bad about not paying your bills that you will take food out of your own kids mouth and keep making your own families sacrifice on and on and on to keep paying us.

The truth is that we can screw you and we have screwed you, and you won’t do a thing about it.

So, nothing personal, but if we can skirt around the negative effects of the credit card reform bill, even if it screws you and your kids, that is what we are going to do. We’re bankers. It who we are. You’re just too stupid to see it.”

Angry yet?

I hope so because if you get angry enough, there are things you can do to fight back,

….things that speak to the big banks in the only language they understand,

….things that speak to the big banks in the only way that ever really gets their attention: MONEY.

You don’t have to just sit there and take it, and your family does not need to continue sacrificing and suffering.

Are you ready to take control? Are you ready to do something positive? Are you ready to do whatever it takes to make sure your family survives no matter how bad things get?

If so…good!

The first thing you need to do is to stop looking to Congress for help. That ship sailed long before you and I were ever born. You know it and I know it. Instead, we need to do what we can to help ourselves.

Second, stop thinking that big banks care, or will ever treat you fair. It ain’t gonna happen. To them, you are not a human being, much less a human being with kids and brothers and sisters and a mom and dad. You’re just a number to them, a statistic on a computer screen, and that will never change. So, stop wasting time calling them and asking them to be fair.

Next, find a small community bank that’s too small ‘not-to-care’ and move your bank accounts and all your banking business there. It may be that you still need the big bank for your credit card, but not for the rest of your banking business.

Next, if you are one of the lucky ones who can afford to do it, pay off your credit cards in full and stop using credit cards, except where you already have the cash or income to pay the thing off fully each and every month.

If you are not so lucky, and you can’t afford to pay off your credit cards in full, unfortunately, you only have 3 choices:

Choice 1: Go on paying, no matter what.

If you can even afford it, one option is to just go on paying your on your credit cards no matter how much they jack up your rates and no matter how high your payments get to be.

This is what the banks are counting on you to do, and if you do it, they win. The problem with this option is that every dollar you pay them is a dollar no longer available to take care of your family. In these tough economic times, continuing to pay on jacked up credit cards is risky business at best, and more likely, financial suicide for your family.

Choice 2: Stop paying.

In the short run, this will leave a lot of money in your pocket, and that good in terms of taking care of your family, but any credit you do have will be killed of completely, and ultimately, you will still owe all the money, plus interest. And…sooner or later…the credit card companies will sue you, and having gotten a judgement against you, will take from you whatever money or property they can legally get their hands on.

Choice 3: File bankruptcy.

What a surprise. A bankruptcy attorney hawking bankruptcy as a solution.

But the fact is that, if you can’t pay all your bills or, even if you can, but only by making your family suffer, bankruptcy does 2 things that nothing else in the world does:

First, it gets rid of debt and gets rid of it permanently. Results will vary depending upon your situation, but nothing gets rid of credit card debt, for instance, like filing bankruptcy.

And second, if you have no choice and need to file bankruptcy, it gives you a chance to give the banks a dose of their own medicine?

Let me explain. At its core, what bankruptcy does best is that it gets rid of debt. It just erases it, like, “today you owe it”, and “tomorrow you don’t”, like it never existed.

Well, you know who gets hurt when you don’t have to pay. The big banks…at least in terms of credit cards. The very same banks that the government forced you to help “bail out”. The very same banks that just jacked up your rates, doubling your payments. The very same banks that stuck it to you and screwed your family. The same banks that would let your family sink if it means making another buck.

Sick of having your back against the wall?

Need to get your family out of debt and back on track?

Need to put your family first again…instead of last?

And need to do it now before things get even worse?

Want to give the banks a dose of their own medicine for making you suffer and forcing your hand? Is it time to make them suffer the way they have made your family suffer?

If so…Think bankruptcy.

You have the power.

The power of bankruptcy.

Call today for a FREE Debt Consultation and at least find out how all this bankruptcy stuff works. You won’t be disappointed…I guarantee it.

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Published Tuesday, December 1, 2009 @ 7:35 am

Exacerbated by the recent recession, self-employed or small business owners everywhere are facing fewer credit options, high health care costs, and lagging consumer spending. Those struggling to stay afloat in these tough financial times must ask themselves even tougher questions. Do I have the motivation to continue my business? Could the business prosper if it wasn’t keeping up with old debts? Could my business persevere if it shed equipment, employees or space? Could I sell my business? Could I start another business if I did sell?

If after answering these questions you find you are no longer able to sustain or expand your business in your current financial situation, filing for bankruptcy may be your best bet.

For those business people who no longer have the time, energy or drive to continue their business interests in their current capacity, Chapter 7 bankruptcy liquidates business assets to repay looming debts. A court-appointed agent will sell these assets and pay the proceeds to creditors; beginning with secured creditors first, followed by any unsecured creditors. While this type of bankruptcy normally leads to the demise of the business, it, in turn, provides a quick resolution for individuals and a dependable dissolution for partnerships and corporations.

In the alternative, for business owners seeking solutions to the very problems that led to bankruptcy, Chapter 11 allows for a much-needed financial reorganization. Following a Chapter 11 filing, the court appoints a conservator who, like the agent in the previous example, oversees the business assets to best pay off creditors, while still keeping the business afloat. In short, Chapter 11 stops creditors, allowing the court-appointed conservator to reorganize and optimize business finances for a better future.

The best part for self-employed and small business owners filing Chapter 11 is that they can legally continue operating their business and earning an income as a “debtor in possession,” receiving the benefits of “automatic stay” protection. Debtors in possession are protected from creditor actions such as lawsuits and asset seizures, even if a creditor obtained a judgment before the bankruptcy filing. An added benefit of filing bankruptcy as a debtor in possession is that bankruptcy law allows you to take out more loans that take precedence over all other creditors.

Conversely, like businesspeople filing for Chapter 7, Chapter 11 debtors in possession are bound by specific bankruptcy rules and restrictions, including prohibitions on using encumbered assets as collateral and selling assets without the approval of interested creditors. As a result, the best move a bankruptcy bound small business owner can make is to consult an experienced bankruptcy attorney who specializes in representing small business owners.

While a bankruptcy for your business is sometimes advisable, many small business owners don’t have any assets left and don’t intend to continue the business, or intend to continue under a different name. If so, it may make more sense to simply let the corporation die on its own without a bankruptcy. However, if you’re like most small business owners, you have probably personally guaranteed most, if not all, of your business debt. While a business bankruptcy will effectively hold off creditors from getting to your business, those same creditors can choose to pursue you personally. Whether you are dissolving the business or continuing on, its important to pull your credit report to determine how much of your debt has been personally guaranteed. Your attorney can then advise you how a personal bankruptcy can save you and your family from your business creditors.

Skilled bankruptcy attorneys like those at The Law Offices of John T. Orcutt can get to work early, navigate any uncertain waters of bankruptcy court and work in your best interests during the duration of your business and/or personal bankruptcy. In North Carolina, call 1-800-899-1414 to discuss your situation today. Always a free initial consultation.

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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 Thursday, September 17, 2009 @ 7:27 am

Most people understand that wage garnishment is basically what happens when a court order requires your employer to withdraw a portion of your paycheck for the repayment of a debt. If you are already up to your ears in debt and barely able to make ends meet each month, one wage garnishment, be it by the IRS or another entity, can be the straw that breaks the camel’s back.

Although any kind of debt can eventually result in garnishment of wages, the most common types include back child support, unpaid court fines or judgments, defaulted student loans, and the biggie: delinquent taxes owed to the IRS or any state government.

The good news, which may come as a surprise to some, is that tax debts are dischargeable in bankruptcy (within certain parameters).

Just so you know, if a debt is “dischargeable”, that means you can get rid of it permanently by filing bankruptcy; and that means you never have to pay it back.

Six Rules to Discharge Income Tax Debts

If the income tax debt meets all six of these rules, then the income tax debt is dischargeable in Chapter 7 and Chapter 13 bankruptcy cases.

Note: Each of these rules must be applied separately to each year’s tax debt.

1. First, the tax debt must be “income” tax debt. That is, the debt for which you are required to file an IRS 1040 form. Other types of tax debts, for example employer tax withholding and sales taxes, are never dischargeable.

2. The “due date” for filing your income tax return (for the particular tax involved) had to have been at least three years prior to the bankruptcy.

3. The tax return had to be actually filed at least two years prior to the bankruptcy.

4. The tax assessment must have occurred at least 240 days prior to the bankruptcy. “Assessment” basically means the date when the IRS billed you for the tax.

5. The tax return was not fraudulent.

6. You are not guilty of tax evasion.

The bottom line is that tons of income tax debt gets relieved as a result of filing bankruptcy.

Caveat: In some situations, you may have to pay back a part of even a discharged debt. For example, where the IRS has filed a “tax lien” for the debt in question, in which case some of your property ends up serving as collateral for the payment of the debt. As a practical matter, however, even though there may be a tax lien on file, that does not mean the IRS will. Certain types of property, like household goods for example, are protected. Certain types of property are not worth enough for the IRS to bother with. And certain types of property are untouchabable by the IRS, as a practical matter, for more or less political reasons. However, if there is a tax lien filed against you, you have to be careful. We suggest you check with a good bankruptcy attorney to find out what, if any, of your property is at risk.

Got a lot of older income tax debt? Got the IRS bugging you and trying to grab your income, your bank account or other stuff? You may be able to do something about it.

The one thing that trumps the IRS is the bankruptcy laws. You may want to check with a good bankruptcy attorney.

In North Carolina, you have one. The Law Offices of John T. Orcutt, with offices conveniently located in Raleigh, Durham, Fayetteville and Wilson. For a totally FREE, initial consultation, call toll free to: 1-800-899-1414.

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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 Tuesday, August 4, 2009 @ 9:53 am

In 2005, Congress passed the most dramatic reforms the laws of bankruptcy had seen for 20 years. You may have heard of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 already because it’s a sore topic with bankruptcy lawyers and other consumer and debtor advocates. Though the name of the law suggests that Congress also intended to protect consumers, the fact that “abuse prevention” appears first in the title is telling.

Unfortunately, Congress gave in to lobbying efforts by credit card companies and other large stake holders which fueled the belief that folks in America were out to game the system. The reality is that most people who file for bankruptcy do so following a serious, life-altering change in circumstances. Thanks to the law, people who lose their jobs, go through painful divorces or survive cancer are sometimes forced to face obstacles to the protections the bankruptcy law rightly affords to every member of our society. So how did this happen?

On one side of the battle, creditors argued that there was wide spread abuse of bankruptcy law that permitted people with the ability to meet their liabilities walk away scot-free. This, they argued, made credit more expensive for everyone, forcing consumers who didn’t declare bankruptcy to pay for those who did. There were also many who were neutral to the issue, because they felt that the law wouldn’t significantly affect the people who most needed help.  Most filers, they believed, would be able to pass the Median Test anyway, which means you never have to do the Means Test at all. Consumer advocates argued that lenders had alternative means of controlling the cost of credit, and that the continued growth of the credit card and lending industries demonstrated that the credit game had clearly remained profitable. Unfortunately, it looks like the credit lobby prevailed.

If you’re starting to feel like this all sounds pretty grim, cheer up! There is a bright side. People are still declaring bankruptcy in record numbers; not that this is something to celebrate, but it does demonstrate that it is not at all impossible for you to benefit from bankruptcy protection. The Means Test makes bankruptcy a little more burdensome, but it doesn’t act as a true barrier to those who really need the protection of bankruptcy law.
It’s also true that the law created uncertainties that are still being played out in the courts. For example, the Means Test is only supposed to apply to people who have “primarily consumer” debts, but there is some disagreement about both terms. Does “primarily” mean that the dollar amount of your consumer debt is higher? Or does it mean that more of your debts are consumer debts than not? Are mortgages consumer debts? Are taxes? What about student loans?

Here again, there is plenty of reason to keep a positive outlook. The courts are settling these questions gradually and there is general consensus over many of the questions.  What’s more, an experienced bankruptcy attorney will be keeping up with changes to the law as soon as they happen, and will also have knowledge of local jurisdiction practices. With the help of a good attorney, bankruptcy will remain navigable, even if you may come across a few more obstacles on the road to financial freedom. Bankruptcy law remains one of the most important safety nets provided by the American government, and the bankruptcy law in America is still among the best for debtors in any industrialized nation. If you need help, don’t hesitate to take advantage of this privilege.

In North Carolina, contact the Law Offices of John T. Orcutt by calling toll free 1-800-899-1414. Attorney John Orcutt offers a totally FREE consultation out of 4 offices conveniently located in Raleigh, Durham, Fayetteville & Wilson. If you need to file bankruptcy, you want John Orcutt.

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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 Wednesday, July 8, 2009 @ 9:10 am

So you have decided that it is time to file bankruptcy. Next, it’s time for you find the right kind of help to get you through the maze of paperwork, aggressive creditor tactics and into the court system.

Clearly, a bankruptcy attorney is your best option. But not all attorneys are the same.

Bankruptcy practices that hold membership in the National Association of Consumer Bankruptcy Attorneys (NACBA) can boast belonging to the only formal organization that is dedicated solely to the support of consumer debtors and the law professionals that guide them. The value of such an organization is that it remains constantly in focus with the laws, practices and trends of the very court decisions that affect your ability to file and emerge successfully from bankruptcy.

The NACBA was established in 1992 and today has members in every state. It is a group consisting of real change-makers in the world of bankruptcy law that have played significant roles in high profile cases, all the way up to the Supreme Court. It serves its members in countless ways but has found its best route for bettering bankruptcy practices through continuing education, conferences, publications and workshops. It is in these efforts where the industry takes shape, powered by the unique bankruptcy situations of people like you that generate discussion and often materialize as real-life methods for providing better service for those who are at odds with their debt and need to draw a line in the sand.

In a short time, the NACBA has become a firm presence in Washington that can be seen standing tall in Congress and the court system on your behalf. Many of the group’s members are considered national experts in the field of bankruptcy law and procedures and are often called upon to offer expertise in a variety of legal and congressional venues.

Most notably, the NACBA consistently challenges the tactics of the consumer credit industry that is behind a tide of anti-debtor legislation making waves throughout our government. As an advocacy group for the people, the NACBA is often the only voice of people who are in financial dire straits that can be heard within the Beltway. Again, it is the individual situations of those who need bankruptcy laws to work in their favor that NACBA members work with personally every day. Thus, there is no better representative for the rights of people struggling with debt.

For decades, before bankruptcy was recognized as the sound financial strategy that it is today, there existed no advocacy group for those who practiced bankruptcy law. With the establishment of the NACBA and its 4,000 members, there is real change being enacted on behalf of financially troubled Americans.

Keep in mind that choosing the right attorney is perhaps your most crucial decision along the road back to fiscal stability. Be wary of hype and cognizant of inexperience. Judge an attorney based on their experience in court, ability to relate to your situation and caseload of successes. Above all else, you need to be comfortable sharing with them the challenges you are facing as a result of your debt. The NACBA is in place to help the best attorneys be better at what they do. Look for membership in the National Association of Consumer Bankruptcy Attorneys. You’ll be glad you did.

The attorneys at the Law Offices of John T. Orcutt are proud NACBA members. In North Carolina, call 1-800-899-1414 to find out how the power of bankruptcy can help you.

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Published Tuesday, June 23, 2009 @ 9:46 pm

How can you be certain that considering bankruptcy is the right course of action for you? Are you concerned that you might still be able to work your way out of your cycle of borrowing, paying interest-only on loans, and then borrowing again? Ask yourself if you’ve experienced some of the following situations to help you determine whether there is a problem you need to address.

High Interest Loans:

Are you taking short term, high interest loans to try to give you enough cash to pay the minimum on other loans? Once you’ve maxed out your existing sources of credit, are the new ones you’re trying to get coming at a higher and higher interest rate?

Late Fees:

Anyone can miss a payment deadline from time to time. However, are you incurring late fees as you juggle minimum payments from one creditor to another? Do you ask yourself ‘who can wait to be paid this month’ as you frantically move cash from one account to another?

Payday Advances:

Have you become a regular user of payday advances? Sure, they’ll loan you money ahead of your paycheck but how much do you owe them for the privilege? And how much of your paycheck will be left once you’ve repaid the loan?

Pawn Shops:

Pawn shops are sometimes called ‘the poor man’s banker’, because they can help you bridge a tough time by lending you money with few questions asked. But how long can you borrow against your TV or jewelry before you’ve paid what it’s worth and more back just trying to keep your possessions ‘in hock’ and off the show room floor?

Family and Friends:

Do your family and friends avoid you because you’ve borrowed money from them? Or worse, are you avoiding them because you’re embarrassed that you can’t repay or even make a down payment on what you owe them? Is losing your personal support network worth it to keep prolonging your cycle of debt?

Gambling:

Do you risk what little cash you have on ‘long shot’ chances to pay everything off at once? Whether you’re spending money on the lottery, the horse or dog track, or casino gambling, the odds are against you getting that big score. That’s why the call it ‘gambling’ and not ‘debt service’.

Anger, Depression:

Does dwelling on your debt cause you to be constantly worried, short with your family, out of contact with your friends?

If any or all of the above situations seem familiar to you, you’re probably in over your head. But relief is just a phone call away! A qualified bankruptcy attorney can review your situation and help you decide how the legal protection of bankruptcy can help you regain control of your life by wiping out your overwhelming debt. You can have a fresh start.

You are not alone. Many people in situations just like yours have filed for bankruptcy and emerged financially stronger on the other side. Take advantage of their collective experience by calling a qualified bankruptcy attorney today.

Brought to you by 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 Thursday, June 18, 2009 @ 11:44 am

If you have spent some time on this blog, then you should understand the value of working with a bankruptcy attorney. Not only can a dedicated legal representative be your best asset in a courtroom, they offer the emotional confidence that everything will be all right in the end. It can be trying and frustrating at times, and that is exactly why you should hire an attorney.

That being said, there are some things you can do on your own to prepare for meeting with a bankruptcy lawyer that will not only help you get a better idea of where you stand but it will help your attorney do an even better job for you.

For example, prepare as best as possible a breakdown of any income taxes that you owe, regardless of when they were due. Your mortgage is also a crucial component of your preparation, so it will help for you to find out what your home is worth, which can be ball-parked by looking at online county tax records. Know that tax value (the number on which your property taxes are based) and market value (the number at which an agent can sell it) are much different. In Wake County, for example, you can see a record of recent sales around your address. This is a solid enough breakdown for your purposes.

Find the value of your automobiles and determine what is owed and how far behind you may be. Then, create a total for all monthly bills. This can include utilities, credit card payments, home phone and cell phone, Internet, gym memberships, movie rental clubs or subscriptions of any kind. Be as thorough as possible; if you send a check somewhere each month, document it.

You should also consider gathering copies of the following documents:

• * pay stubs for the last 60 days
• * all mortgage documentation
• * most recent income tax returns
• * any court papers relative to current lawsuit or legal action in which you are involved
• * divorce decrees, martial settlement agreements, etc.
• * paperwork of any kind accumulated from a credit counselor or financial assistance program

In order to help you, an attorney will need to be as comprehensive as possible when learning about your individual economic situation. The answers to their questions are critical to your bankruptcy success, so it will only help if you know as many of the answers as possible ahead of time. Don’t worry, it’s not a test, just a way to make sure you get as much assistance as you deserve. You may be asked:

• * What is your marital status? Or, is a wedding or divorce pending?
• * How long have you lived in the state?
• * Are you considering foreclosure?
• * What is your general living situation? Renting? Homeowner?
• * Is there any indication that you will be seeing a spike in medical expenses in the near future?
• * Have you spent more than $500 in the last 90 days with a single creditor?

You get the idea. These questions are rather general in nature but the answers to them will help ensure that initial meetings with your bankruptcy attorney are as beneficial as possible. Remember that once you have made the decision to move forward, you need to keep moving forward. Don’t delay your future.

Brought to you by 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.

Raleigh bankruptcy. Durham bankruptcy. Wilson bankruptcy. Fayetteville bankruptcy.

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Published Saturday, June 13, 2009 @ 8:13 pm

It took almost five years after legislation passed to make it more difficult to file, but bankruptcies in the United States are at their highest number since 2005. It should not come as a surprise to anyone, given the extent to which job losses, tight credit and the housing market have bludgeoned our economy.

Between the first of the year and March, there were 330,477 filings, an increase of 35 percent from the same quarter of last year. In the face of such daunting numbers, it’s difficult not to come to grips with the pain being caused by the recession. Thankfully though, the bankruptcy courts are there to assist those in the most serious trouble with finding a route back to financial solvency.

There is a direct correlation between states with the highest number of filings and those hit hardest by the housing crisis. California experienced the most, and then Florida. Both states, along with Nevada, have been decimated by dropping home values.

However, and in thanks in part to the federal government, banks and creditors are trying to help where they can by lowering interest rates, halting fees and modifying mortgages. At least that’s the plan (read: hope). That help comes with a mixed message though, as many credit card companies are scrambling to add costs before recently-passed legislation that limits their ability to charge more and raise rates goes into effect sometime in early 2010.

Good news on the economy is starting to surface, however, according to federal officials throughout the United States. A report by the Federal Reserve said that signs of economic contraction were leveling off but that any sort of significant recovery will not be fully visible until after 2009. The increase in home sales has helped to put some areas, to a small extent, back on track.

If you plan to file bankruptcy this year, it is critical for you to consider the benefits of a bankruptcy attorney. The road to the bankruptcy court can be a bumpy one if you’re not able to keep it between the lines. From reading through this blog to picking up books to seeking references, the more knowledge you have about the bankruptcy process, the more prepared you will be when it’s time to officially file.

Bankruptcy attorneys can leverage the legal system in much more effectively than most credit counselors. While learning to spend more wisely and negotiate interest rates are certainly worthwhile efforts, the odds are that you already understand what mistakes you made. Many experts on the subject believe that people in financial trouble get into even more while trying to decide whether or not to file bankruptcy. Problems arise when a person continues to spend or make unwise decisions for a few weeks while waiting to call a bankruptcy attorney or begin their research, as if simply telling yourself you plan to file makes it happen.

When it’s time to file bankruptcy, like more than 330,000 people have already this year, it’s a time for action. Move forward quickly and get your life back on track because as the saying goes, “the sooner the better.”

Live in North Carolina and need a good bankruptcy attorney? Consider the Law Offices of John T. Orcutt, serving 28 counties out of 4 different offices located in Raleigh, Durham, Fayetteville and Wilson. This lawfirm offers a totally free and confidential initial consultation and is dedicated to making sure you know all your options, bankruptcy and otherwise. Need an appointment? During normal business hours, call toll free to 1-800-899-1414. At night and on weekends, you can make your own “online” appointment by visiting their 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 Tuesday, June 2, 2009 @ 4:28 pm

Scam artists sure are brave. Well, there are probably more accurate ways to describe those who deliberately take aim at people in dire financial straits. They just are not fit to be published.

Turns out the Federal Trade Commission has spotted a series of deceptive Internet advertisements that claimed to lead browsers to the “official” Web site of the recently introduced Making Home Affordable program, a national effort that provides free mortgage loan assistance and encourages banks and lenders to help homeowners stay afloat. The actual official Web address is http://www.makinghomeaffordable.gov/

The FTC promptly filed a court order to halt the misleading ads that were popping up on some of the most popular search engines, such as yahoo.com, msn.com and altavista.com.

Many people facing bankruptcy today are dealing with unreasonable mortgage loans as a result of aggressive and poorly vetted loan programs.

The ads took advantage of Web searches for mortgage assistance and the federal program. The ads would lead to a site that offered loan modification programs for a fee. Previous posts on the blog have mentioned the government program, which is worthwhile in principle but is facing some communication hurdles. For example, since it is not marketed particularly well, the opportunities for scammers to take advantage are fairly prevalent. There simply hasn’t been enough education about the program. However, many American home owners have benefited from its initiatives.

Those named in the complaint are accused of using “sponsored links,” or paid search results, that boldly displayed the official Web site. However, clicking on the ad lead to Web sites of private mortgage assistance programs that charged fees and were in no way associated with the free services available through the government.

But that’s not the end of it.

The misleading approach would be somewhat easier to accept if these Web sites were associated with legitimate loan modification companies simply being too aggressive in their marketing or that didn’t realize to what extent they could affiliate themselves with the Making Home Affordable program. However, it appears that those behind the pixelated solicitations are nothing more than common criminals seeking to swipe identities. The Web sites asked for extensive financial information and, wait for it … social security numbers! Not only that, some of the sites boasted that they only refer people needing help to yet another loan modification service, which is simply an effort to take your information and further distance themselves from the crime.

The examples of Web-based fraud and below-the-belt assistance scams are becoming more and more prevalent. In light of the ever growing shadows over exactly who can help and what service is best, people facing financial difficulty are best served by speaking to a reputable attorney that specializes in bankruptcy law and helping people navigate the choppy economic waters caused by storms of mounting debt.

Be careful out there.

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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 Monday, May 11, 2009 @ 11:53 pm

To file or not to file bankruptcy is one of the most difficult decisions you’re ever going to make. It involves more than just money and the debts you’re struggling to repay. Bankruptcy has its own set of emotions attached to it. You may ask yourself:

‘How did I get into this situation?’
‘How have other people worked their way out?’
‘What will my friends and family think?’

As you work through these difficult questions, understand that there is an attorney waiting to help you work through your financial problems and give you the facts you need to make an informed decision.

Bankruptcy is there for people like you, honest, hardworking people, who for reasons beyond their control, need the chance to start fresh in their financial lives. It can help you break free from overwhelming credit card and medical debt, and help you catch up on missed mortgage or car payment. Bankruptcy is indeed the “play” button for a life on pause.

There are two different kinds of bankruptcy which your qualified bankruptcy attorney can help you choose.

Chapter 7 bankruptcy is an option for individuals who pass a certain test of their disposable monthly income, as determined by median income figures for your state. While both Chapter 7 and Chapter 13 offer an opportunity for a fresh start, a Chapter 7 discharge can be obtained quickly- in about 6 months from filing in most cases.

If you are behind on your mortgage or car payment, Chapter 13 is your best option to get caught up and save your property from foreclosure or reposession. Your missed payments can be repaid over the course of a 3 to 5 year repayment plan. If you have disposable monthly income above the Chapter 7 threshold amount, Chapter 13 is also an option to get a handle on your unsecured debt.

A qualified bankruptcy attorney can help you determine which version of bankruptcy will be best for you. Using the federal protection of the bankruptcy code, you can begin to tackle your financial problems and shut out the bill collectors forever. You can restructure or eliminate your debt, keep your personal property, and begin your financial life again.

There may be one or many reasons why you’ve been placed at bankruptcy’s doorstep. Understand that there is professional help available, and that the benefits of bankruptcy probably outweigh many of the downsides. With offices in Raleigh, Durham, Wilson and Fayetteville, the Law Offices of John T. Orcutt will help you get back on your financial feet.

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Published Friday, April 17, 2009 @ 2:52 pm

Choosing the right attorney to help you through the bankruptcy process can seem like a daunting task. How do you find one? How do you know whether he or she is any good? How can you tell whether the attorney will truly care about you and your case? This is a critical decision. But take heart: there are some simple guidelines you can follow that will help you find an attorney, and rest easy with your decision.

How Do I Find An Attorney?

You’ll for sure find lots of ads for attorneys in phone books, newspapers, and magazines. Anyone can place those ads, so they won’t necessarily tell you very much about the quality and trustworthiness of an attorney. A better place to check might be with your state or local bar associations, which often have a roster of attorneys broken down by area of practice. Also consider referrals from people who have filed bankruptcy, or from attorneys who know people in the field. If you don’t get anywhere with these avenues, you can contact your local Chapter 13 Trustee, whose office deals with the bankruptcy attorneys in your area and may be able willing to suggest certain attorneys (or tell you which ones to avoid).

How Do I Know If The Attorney Is Any Good?

Once you’ve found an attorney who practices bankruptcy law, here’s how you can tell if he or she is someone you can trust to get you the best result:

1. Specializes in bankruptcy law. Make sure the attorney specializes in bankruptcy law, and doesn’t just “dabble” in it here and there. This is a highly complex field. You need someone intimately familiar with the nuts and bolts of the process to ensure that you can maximize the benefits bankruptcy has to offer you.

2. Track record of success. The attorney should have a track record of success. The more Chapter 7 cases the attorney has seen through to discharge, and the more Chapter 13 plans he or she has had confirmed, the better.

3. Bankruptcy associations. It is also a good sign if the attorney is an active member of local, state, and national bankruptcy associations, because those associations provide seminars to keep members abreast of the latest developments.

4. Free debt consultation. Any attorney who is truly worth hiring has nothing to lose in offering to meet with you free of charge to discuss your situation.

A Good Example

The Law Offices of John T. Orcutt (with offices across the state of North Carolina) is a good example of the kind of law firm clients can trust with their cases. John Orcutt has practiced bankruptcy law himself since 1985, and has focused in the area since 1997. The firm handles 220 to 350 cases per month, and has handled more than 20,000 since 1985. More than 10,000 of those have been Chapter 13 cases. The firm’s lawyers – who have a combined experience of 40 years in practice — regularly attend state, local, and federal bankruptcy seminars every year. The firm exclusively represents debtors in the bankruptcy process. Over the years, it has helped more than 30,000 clients free themselves of 10’s of millions of dollars of burdensome debt. The firm offers a free debt consultation, as well as reasonable and affordable payment plans for both Chapter 7 and Chapter 13 cases.

So, whichever attorneys end up on your list, follow these guidelines in deciding whether to hire them. Don’t settle for anything less; your financial future is too important.

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