Published Friday, September 3, 2010 @ 3:32 pm

While many people consider it common knowledge, the last-minute fear before deciding to file bankruptcy could end up costing you even more come retirement. Turns out, that as the recession deepens, more people are looking toward their long-term savings for an influx of cash to help stay afloat.

Well, don’t ever be one of those people. Typically, what ends up happening is that you wind up without retirement money and still filing bankruptcy. We’ve seen it happen. And it’s hard to watch.

An article on USAToday.com pointed to figures that show a record number of people in the second quarter of this year used their retirement accounts to help stave off a financial problem. Specifically, the article cited Fidelity Investments’ report that 2.2 percent of their 401(k) customers accessed their accounts for “hardship withdrawals.” That rate demonstrates a two percent increase from last year. And, almost half of those that accessed funds last year did it again this year.

So what does that tell you? It says to us that accessing your retirement savings doesn’t help you.

Look, we’re all for doing everything you can to prevent and treat an economic illness. But typically, we recommend a second job, selling an extra car and drastically cutting expenses. If bankruptcy enters the picture, please add to its benefits the preservation of your retirement savings. What many people don’t understand about bankruptcy is that once you open the 401(k) coffers, many creditors are automatically invited in should you have to file. If the chest remains locked, they hardly ever see the key.

Additionally, most of the bills that are bogging you down can be discharged in a bankruptcy.

Federal guidelines prevent you from contributing to your 401(k) for six months after you withdraw funds early, meaning you are also losing those gains, furthering your losses and reducing the value of the withdrawal itself.

And probably the most important reason to not prematurely access your retirement accounts is that you have to pay for doing it. The money you withdraw is considered taxable income by the good ‘ole IRS. So come April, guess what? That’s right: more out of pocket expenses.

A scarier fact than the mere increase in retirement savings access is the primary reason why people are doing it: to avoid foreclosure. Wow. Now there’s a sign about the state of our economy.

Financial companies that manage 401(k) plans allow hardship withdrawals for things like buying a home or paying for college without a penalty directly to the company. But you still have to pay the taxes. And given the behavior of much of the financial industry today, namely banks and credit card companies, don’t expect the penalty-free trend to last much longer.

The USA Today article goes on to mention to that college tuition is the second most popular reason people want early access to retirement savings. Our first reaction is that if paying for college requires any form of money granted under the title of “hardship,” you should find another way to take care of it. Sure, we have not been overly positive about the state of the student loan undustry here on this blog but provided your child never ends up having to file bankruptcy, they are a proven way to help people get a college diploma.

Instead of using your retirement savings like an ATM machine, use it as a benchmark to signify that it’s time consider bankruptcy. If that is all you have left to access, then you have nothing left to access.

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Published Wednesday, September 1, 2010 @ 7:36 am

There was a time when a college diploma carried the promise of long, prosperous employment. Today, it’s as promising as a one of those silly motivational pictures of eagles and mountains.

As most people are coming to realize, it doesn’t matter how many initials are attached to the end of your name, you stand about as much chance as finding work today as the guy holding a sign at the intersection.

Earlier this week, President Obama stood in front the press corp and verbalized what everyone in America already knew: that far too many people are still out of work. As a result, foreclosures continue and personal bankruptcies are commonplace.

Of course, it’s all political, he says. Republicans are the problem. Well, in reality, everything is the problem. The longer Washington stands aisle to aisle pointing fingers, the longer people like you—our readers—are going to have to stand in unemployment lines and continue to need our help. And we’re here for you, of course; but wouldn’t you rather not have to make that difficult phone call?

The President called into question the Republicans lack of motivation to pass a bill targeted to incentivize small businesses. A couple of things stood out about his speech, however. One, election season is heating up and the Democrats need to attach the opposition to every verbal instance of economic duress as possible. Secondly, unless the bill has a good deal of bacon wrapped around it, most Republicans would support a truly business-centric piece of legislation.

Don’t get us wrong here, this isn’t meant to be a political post. But who are we kidding? Washington has found itself so wrapped up in its own well-being that the people it tries to serve have become nothing more than pawns in the two major parties’ efforts to win votes. There doesn’t seem to be a whole lot of intrinsic, domestic focus. It’s almost as if we need to wave a flag that says, “Hey, Congress, we’re over here! Remember us?” It’s time to put the swords away.

Last week, a report showed that economic growth has stalled. The timing for the President was anything but good, as it came during his 10-day stay in Martha’s Vineyard. After all, getting the country back on its feet is hard work.

Efforts to date have shown that there is no real magic fix to our country’s economic woes. All the creativity to date has fallen flat. So, wouldn’t one think that it’s time for some radical thinking? What about bankruptcy mortgage cramdown? How about some real relief for those stuck with high interest private student loans?

In his speech, President Obama said, “Every single day, I’m pushing this economy forward, repairing the damage that’s been done to the middle class over the past decade and promoting the growth we need to get out people back to work.”

Bold words.

And who doesn’t wish they were true?

If you’re struggling to make ends meet, real relief is just a phone call away. Call the experienced bankruptcy attorneys at the Law Offices of John T. Orcutt: 1-800-899-1414 or visit www.billsbills.com. Even if you’re unemployed, and think “I can’t afford an attorney”, give us a call. There are many options available under the bankruptcy code, some with very minimal up-front fees. Convenient offices in Raleigh, Wilson, Durham, Fayetteville and Lumberton.

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

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

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

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

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

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

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

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

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

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Published Tuesday, August 10, 2010 @ 9:53 am

In the wake of the worst economic conditions since the Great Depression, millions of people are finding themselves bankruptcy bound. And with so many people forced to find relief in the protections a bankruptcy filing can provide, gone are the days of societal stigmatization and shame.

Yet, many debtors enduring tough financial times are still stuck in an old mindset that bankruptcy is a measure of last result. This often leads people just like you to wait months and even years after they should have started the bankruptcy process, often wasting endless time and money to just stay current during an unprecedented era of unemployment, rising health costs, and housing woes.

Instead of waiting for things to get better, take your financial future into your own hands with these four easy indicators that you’re ready for bankruptcy—right now.

Creditors are Calling and Lawsuits are Pending.
It’s one thing to occasionally miss a credit card payment. You might pay late or forget altogether, resulting in higher interest rates, calls from your credit card company, and a possible end to your credit line. But, more and more often, people are simply unable to pay their bills at all, handcuffed by joblessness, medical bills, or other unexpected budgetary burdens. In this case, you may be facing creditor lawsuits, whereby your lenders are using the law to win judgments and eventually get the power to seize your assets.  If this is the case, bankruptcy is a clear choice, allowing you to stop these types of proceedings cold and get you on a financial course that will allow you to meet your ongoing obligations and the needs of you and your family.

Creditors are Garnishing your Paycheck.
Wage garnishment is a sure sign that creditors have not only sued you, but the creditors are winning.  Wage garnishment is limited under North Carolina law, but certain entities such as taxing authorities and student loan creditors may garnish your wages.  Other judgment creditors may be able to garnish your wages if your employer’s main office is located outside of the state of North Carolina. Bankruptcy is the best way—and often the only way—to end such wage garnishments, saving your income from creditors, and for the things you need most.

Tax Liens Have Been Levied Against You.
Tax liens are liens imposed by law upon a property to secure the payment of taxes. If you cannot afford to pay your taxes and tax liens have been levied against you, bankruptcy can help. A personal bankruptcy can discharge unsecured debt, freeing up resources to pay taxes, and avoid losing much-needed personal and real property.  In many cases, you may be able to satisfy your tax lien by paying the total amount of equity in all your property to the IRS or state taxing authority through a Chapter 13 bankruptcy plan.

You are Behind on Your Rent Or Mortgages and are Facing Eviction
As you already know, keeping a roof over your head is a priority, and, with millions facing foreclosure in 2010, the potential to lose the security of shelter is real for many Americans. While bankruptcy will not wipe away your requirement to pay rent or your house note for an apartment or home you intend to stay in, it can keep you in your home or apartment and wipe out other debts that might have forced you into eviction in the first place. In the case where your mortgage is untenable, bankruptcy can discharge what you owe, allowing you to walk away from one house to walk into another that you can actually afford.

If you meet any of the above criteria, it’s never been more important to act now, seeking competent and experienced bankruptcy counsel from the very start. An experienced bankruptcy attorney knows the ins and outs of the bankruptcy process and can assist throughout your case.

The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-800-899-1414, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

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Published Monday, August 9, 2010 @ 4:03 pm

Without insult, you should accept the fact that you read at a ninth grade level. It’s okay, four out of five adults do. It doesn’t mean you like the “Twillight” series, it means that the depth of your vocabulary and comprehension skills are at the most efficient level needed to succeed in today’s society. In short, it’s fine. And that’s not really the point of this post anyway.

It should come to no surprise then, that credit card companies create their agreements, notices and paperwork at a reading level on par with the comprehension and reading skills of only one in five Americans. Why do you think they do that? Never mind, you know why.

Roy Peter Clark, a recognized writing skill level specialist and a senior scholar at the Poynter Institute, explains succinctly why the credit card industry does this. “So that the customer will not be able to understand it … I may be cynical, but I don’t think their writing strategies are accidental, the collateral damage of a bureaucratic mindset. I think those writers know exactly what they are doing.”

What else is not accidental is the industry’s overall marketing strategy, which appeals to status and our most base level of wanting, an emotion with which infants can identify. Thus, you have the ultimate bait and switch. They market to us on a broad, simple-to-grasp level but apply rules to their product that are deliberately arcane. To think this contradiction doesn’t contribute to the country’s incredible debt situation would be foolish. But that’s what they want us to believe.

The industry collectively spends billions to learn how the human psyche works so they can get inside it to sell us things and then skirts culpability when, lo and behold, it actually works!

New credit card laws are supposed to make the entire process of overseeing your credit cards a bit easier. The big rules may be in place about interest rate notifications and cancellation options and the like but no hard and fast regulations are in play about making agreements easier to understand. Some companies are trying to make an effort with separate forms that explain clearly the terms of an agreement. However, that sheet is typically coupled with a more traditional version that contains all the fine print and confusion.

In fact, little has changed with the new laws in this regard and in some cases, the sense of simplicity that many assume is now inherent because of the new laws can lead to false sense of confidence that the credit card companies are now on the straight and narrow. Hardly.

One may think that Visa and Mastercard don’t want you to read the fine print. The truth is, that is exactly what they want you to do. The language, terms and figures serve are great distractors. They are textual sleights of hand, taking our eyes away from what really matters, leaving us dumbfounded when the monthly balance sheet arrives. “Did I agree to this?”

Creditcards.com performed an analysis of more than 1,200 credit card agreements that are now required to be made public as part of the new legislation. What they found was an array of vexing terminology and financial language that actually read almost four levels higher than the average citizen.

Among many other astounding characteristics, they found that the Visa and Mastercard agreements for Fifth Third Bancorp contained 20,799 words and is written at a 14.5 reading level. The United States Constitution has just over 4,000 words.

Our Founding Fathers would be so proud.

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Published Monday, August 2, 2010 @ 9:00 am

Despite a continuing overseas economic crisis, the U.S. saw a fourth consecutive quarter of economic growth. This good news is tempered by another economic prediction: with stimulus spending on the decline and the economic recovery sputtering, experts are warning of a troubling new pattern—an economic upturn too slow to put Americans back to work and get the nation back in business.

In fact, according to a recent Washington Post article, “growth was below the long-term trend rate at which the U.S. economy expands and is not strong enough to drive down unemployment. And more worrisome, many of the details of the report point to a continued slowdown of expansion this year…. The new numbers — and the spreading realization that sluggish growth may be a lasting trend rather than a one-quarter phenomenon — hang over the political world heading into November’s midterm elections. The House of Representatives left for its August recess Friday without resolution of policies meant to boost the economy, including legislation to support small-business lending.”

Americans are spending more on goods and services. But in the wake of staggering unemployment, leveling incomes, and staggering debts that linger from pre-recessionary spending, we can’t seem to spend fast enough to help the economy. A weak economy can’t create jobs. And the cycle of tough economic times, low consumer spending, and “too-small-to-help” growth continues.  “The problem is it looks like the consumer was really weakening in June, so you’re starting the third quarter in a position of weakness,” David Shulman, senior economist at the UCLA Anderson Forecast told The Washington Post. “The components of this report are ugly.”

And with the imminent end of certain factors that had helped buttress the U.S. economy over the last year, including boosts from businesses building their inventories, surges from the home-buyer tax credit and the results of federal spending, economy growth is expected to come in the form of “an ongoing sluggish recovery.”

If you feel your own economic recovery is sluggish at best, and you’re continuing to drown in personal or even non-consumer debt, it might be time to take your own financial matters into your own hands and join the millions of people who have already found financial relief in Chapter 7 or Chapter 13 bankruptcy throughout our “Great Recession.” By discharging personal or business debt through bankruptcy you could solve many of your most pressing financial problems—righting your course for a better financial future…just as the country attempts to do the same. This will put you in the right fiscal place at the right time to hit the ground running as the nation tries to right itself, allowing you to start over in a better position than most.

Specifically, a personal bankruptcy through Chapter 7 or 13 bankruptcy will automatically stay creditor action and harassment, including those annoying collection letters, phone calls and repossessions; as well as dispense with much, if not all, of your secured and unsecured debt, either via an exchange of collateral, property or other assets, or through a personally-tailored payment plan that you can afford.

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

Cary bankruptcy attorneys. Durham bankruptcy attorneys. Apex bankruptcy attorneys. Raleigh foreclosure relief.

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Published Wednesday, July 28, 2010 @ 9:16 pm

A recent insurance company survey highlights the fact that a large percentage of Americans are not financially prepared for a sudden loss of employment. Saving an “emergency fund”, as the financial advice columnists and radio show hosts like to call it, is far easier talked about during afternoon drive time than done. Heck, it’s the emergencies that pop up while trying to save for an emergency that prevent us from being able to squirrel away enough cash to prepare for the worst. Have a few hundred bucks to put away? Oops, there go the brakes on the minivan.

MetLife’s report shows that close to half of all Americans would be unable to pay their bills if they lose their job. In total, 65 percent said they could maybe cover a month or two, but not three, which is the coveted benchmark. In today’s tough job market, even a 6 month emergency savings account is probably an inadequate safety net.

Now, this is a wake-up call readers. Stop and look around at your situation. It’s time to start saving.
Take this opportunity to find every instance of money heading out and shut down the leaks. And if a significant portion of your income is going to pay unsecured debt, call a bankruptcy attorney today. Discussing your options with a bankruptcy attorney will give you one more perspective on your situation. Maybe bankruptcy isn’t your best option, but you don’t know until you’ve taken a hard look at your financial situation and talked to an attorney.

Look, we know you’ve probably heard this all before. But if you’re still reading about it, what have you done about it? Digging out of a financial hole is no easy job. Rest assured, it will take time. And by all means, let us know if we can help.

From the Law Offices of John T. Orcutt, with offices in Raleigh, Durham, Fayetteville, Wilson, and Lumberton North Carolina. Call us today for sound financial advice.

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Published Friday, May 14, 2010 @ 8:20 am

Don’t call him a repo man. But if you are behind on the house payments, he’s coming for your keys.

In what can only be considered a sure sign that the current housing crisis is unlike any other, banks are now deploying professional “mediators,” to visit struggling homeowners to negotiate a settlement, which usually ends up with the homeowner accepting a check and the bank changing the locks. In the same day.

Long the route taken by banks to seize cars from owners who, for one reason or another, could no longer make the payments, repossession is now a strategy being used by mortgage lenders across the country.

While car repos are often done surreptitiously under the cover of night by shadows darting in and out of garage-mounted motion lights, those sent to take back your home come in the light of day. In suit and tie with hands crossed, they appear on doorsteps like harbingers of future financial doom. It’s a doorbell ring that will often be the last one a family hears in their home.

Joseph Laubinger is a home taker. He comes to settle the final details for exiting the home in a legal but relatively hassle-free way. “Here is your check,” he may say. “Now, can I have your keys?”

Banks employ Mr. Laubinger to run the middle ground between forgiveness periods and foreclosure. In other words, after everything has been said and every step taken before the inevitable, he shows up to smooth things over.

However, he doesn’t just come to hold the door open while you and some friends carry boxes of china out the curb. He is often sent in the early stages to talk to families about their options and to explore early alternatives before things escalate. When sitting at the kitchen table, he often gets the same question. “People ask me how much time they have left,” he said.

And he has been getting that question a lot lately.

Currently in America, more than four million households nationwide are “severely” delinquent in their mortgages. Industry experts report that the first quarter of 2010 has seen more mortgage failures than at any other time during “the crisis.” Close to 250,000 homes have been taken over by their lenders since the start of the year. Laubinger’s job is to make the exit process a bit easier for everyone.

Foreclosure is an expensive option for banks—and they don’t like it. Families that meet people like Laubinger don’t have to accept his offer, but as one might imagine, it’s often a hard one to refuse.

Many homeowners are becoming more brazen in the defense of their homes. They know there is no legal grounds on which they can be evicted until the foreclosure process is made formal. Thus—out of spite in most case—people can hang around just to tick off their mortgage lender.

In the majority of cases, bankruptcy can save a debt-stricken family’s home. In a Chapter 13 bankruptcy, the mortgage lender must accept the terms of a 5 year repayment plan. By also getting rid of your unsecured debt, a Chapter 13 bankruptcy can put you in a better position to succeed after bankruptcy.

Laubinger’s company is expanding rather rapidly. He has moved tables and chairs into his garage as a makeshift office to train a couple of new employees. He currently roams the Midwest, working for Fannie Mae (the government) and regional banks. But don’t think he, or folks like him, won’t be making headway to North Carolina in the near future. Just listen for the doorbell.

If you’re behind on your mortgage, call the Law Offices of John T. Orcutt today. In North Carolina, call 1-800-899-1414 for a free initial debt consultation or visit www.billsbills.com for more information.

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

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

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

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

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

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

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

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

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Published Wednesday, May 5, 2010 @ 8:25 am

Even the briefest of hospital stays can result in bills just big enough to tilt a person already precariously balancing their finances over the edge and into a long-term financial abyss. The problem with being able to afford medical care is enough to make many Americans wait until circumstances become dire before heading to the emergency room. Even the well-insured become cautious about co-pays and premium increases.

For college student Samantha Palmer, a one-day lapse in insurance coverage led to a medical debt hassle requiring legal assistance. In the midst of switching medical insurance providers, Palmer found herself suddenly in pain on the one day she was without insurance. Rushed to the hospital, she was diagnosed with a sudden onset of colitis, an inflammation of the colon.

After six hours in the hospital, she left with a bill that on average, charged her more than $1,000 per hour. When her parents saw the $6,662 colitis treatment invoice, they felt a little inflammation in that region as well. “The bill came and I went nuts,” said Samantha’s father Glen.

An in-depth examination of the bill found a number of red flags and questionable charges worthy of dispute. So the Palmers contacted Medical Cost Advocate, an organization that specializes in scrutinizing hospital bills for further verification of their suspicions.

The group is in business for the very purpose of helping people understand why hospitals charge so much and to sometimes show that billing errors are often the cause of people over-paying by thousands.

In a recent speech, the President recently called out the medical community’s reputation for administrative failures and poorly-managed facilities. In Los Angeles, some hospitals are going to begin experimenting with lump-sum pricing because of the ongoing discrepancies in how much certain procedures and processes cost from hospital to hospital.

Starting in August, many of the most reputable medical facilities in southern California are going to try the new billing methods, which, if successful, may offer a glimpse into the future of medical spending.

In the meantime, there are number of costly items to which special attention should be paid when the bill arrives. Namely:

• Repetitive entries for the same procedure, like lab work. In many cases, these may be necessary if tests are inconclusive but sometimes the presence of redundant items could simply be a software error.
• Miscellaneous charges. The vaguely-titled line items could be simply be a collection of very minor items that could have been unnecessary, mistakes in procedure that needed to be done over or add-ons the hospital may be trying to hide. In the case of Samantha Palmer, this category accounted for the use of a television and printing her paperwork.
• Non-itemized Emergency room charges. Even if your condition only required use of a single machine within the ER department, sometimes hospitals will charge for use of the entire facility, as if its doctors were assigned to you for an extended stay.

Medical bill support organizations can help you understand your bill and negotiate settlements for items that may have been found to be excessive or have avenues for reduction.

The fact that a separate industry exists to help the sick understand their medical bills should be all the evidence needed that major change is critical to reducing the tremendous amount of medical debt plaguing our country.

If you’re stuck footing the bills that your insurance won’t pay, consider filing for bankruptcy. A bankruptcy will get rid of your unsecured debt, and put you and your family back in control. In North Carolina, call the Law Offices of John T. Orcutt for your free initial debt consultation. 1-800-899-1414

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Published Thursday, April 1, 2010 @ 10:18 am

As we’re all aware, this decade’s Great Recession has dealt, and continues to deal, a significant blow to the budgets of many American families, leaving millions in debt, underwater in their mortgages, and looking for any means necessary to get back on a financially-healthy course.  Now, tax time can  yield a long-term solution for some cash-strapped citizens.

With tax deadlines just a few weeks away, many people just like you are expecting significant refunds, with the average being several thousand dollars. Some of you may consider using this money for major purchases or down payments on a new car. Many more may even want to pay off credit cards and other debts. But if you’re in significant debt, like so many average Americans in this tough economy, if may be better to use that sudden influx of cash to ease your financial situation and erase your debt permanently through bankruptcy.

Here are a few warning signs that you should use your tax refund for the benefits of bankruptcy:

(1) If you’ve are currently out of work and have been unemployed for at least a few months (the average currently being seven months), it might be best to use that tax refund to begin a bankruptcy filing. Unemployment is the primary reason that many Americans are filing for bankruptcy; and your tax refund is just the infusion of capital you need to hire a competent bankruptcy lawyer to help you on a path to a better financial future.

(2) While many people already use their tax refunds to pay off debt, if you are currently unable to make the minimum monthly payment on your credit card or cards, or you are behind on your credit card payments, chances are you should seek professional help in erasing your consumer debt by using that money to instead file for bankruptcy. Credit card companies go after delinquent cardholders quickly in the new economy; your tax refund is the best way to do the same, seizing the opportunity to protect your assets before credit card companies can seize your assets.

(3) And speaking of creditor lawsuits: If you already find yourself embroiled in one, your tax refund-sponsored bankruptcy can be a major asset available to prevent creditors from seizing current and future property.  Once you file for bankruptcy, the benefit of an “automatic stay” kicks in, forcing creditors to cease and desist harassments and other collection actions against average Americans just like you. As such, that annual cash infusion can be just what you need to get the ball rolling on your bankruptcy…and ultimately a better life.

In short, your tax refund may look like quick cash that can be used to pay off some short-term debt; but if you’re like the average debtor, it isn’t nearly enough to garner the peace of mind of erasing all of your debt. You’re better off using that money for a long-term solution like filing for bankruptcy—a solution that will discharge debts and put you on the course to a real financial recovery—especially during these taxing times.

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

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Published Thursday, March 11, 2010 @ 2:40 pm

Currently unemployed and getting unemployment benefits?
Then, this message is for you.

In this horrible economy, there is no guarantee that you will get another job or…even if you do…when.

And…those life-saving unemployment benefits? They are going to run out and when they do…that’s it.

Imagine the worse…no job…and no more unemployment benefits.

What would (will) you do? Will you look back and wish you had saved some of these benefits for your “rainy day”?

When you are sitting there with no job and no more unemployment benefits…when you are not able to put food on your table or pay your rent or mortgage…or put gas in the car…will you look back and wish you had done something more to make those unemployment benefits stretch a lot further?

Will you look back and kick yourself?

Will you look back and wonder what you were thinking…now that you can’t even pay your essential monthly bills…when you were using those precious unemployment benefits to pay on non-essential items like credit cards and medical bills…especially when you find out that there was something huge you could have done…when you find out that…in these dire straits…in this horrible economy…with no end in sight…you could have filed bankruptcy and gotten rid of all those debts?

Without doubt…you are a good person and good people do their best to pay all their bills. That’s what makes you honest.

But…when it comes down to having made a choose to pay on credit cards and medical bills, rather than having made a choice to save up some of that money to keep a roof over your family…and you ask yourself…in retrospect…which was more important…your creditors or your family…what will be your answer?

Your family of course.

Well…you already lost one or more jobs.

What makes you so sure that you will get another job…or get another soon enough to avert disaster?

And…even if you do get another job…maybe even one as good as you used to have…what says you won’t lose that job too?

The fact is that this economy is the worst that any of us have ever seen and…for as much as we all want to believe otherwise…there is no end in sight.

Quite the contrary! We have all dug ourselves a huge hole and it could well be 10 years before we dig out.

You have a chance here…if you will grab it…to look back and know that you make the tough choice and filed bankruptcy and gotten rid of all those debts…and…more importantly…put yourself in a position to keep some of those precious unemployment benefits in your pocket as a hedge against running out of money before, if and when things pick back up for you and your family.

Think about it. Are you on unemployment? Are you paying out any of this precious…one-time-only…money on credit card debt, medical bills and other “unsecured” debts?

If things don’t work out for you…if things don’t pick up and quickly…won’t you need this money to…make sure that your family survives…no matter how bad things get?

Filing bankruptcy NOW…before your unemployment benefits run out…may be the smartest thing…looking back…you ever did. It could well be the difference between your family surviving…when other families do not.

This is your chance to invest in your future…by making sure you don’t keep dragging along with you debts you know are sucking up money that you may well need to take care of your family.

Do you really want to chance it…by not filing bankruptcy?

Wouldn’t it at least make sense to find out how this whole bankruptcy thing works and what all it could do for you…to take away the guesswork and find out for sure from a lawfirm that does this stuff for a living 24/7/365?

You certainly don’t want to be looking back later, wishing you had taken the time to find out more and thinking “That was dumb.”…or worse.

And the best thing is…you can find out all about bankruptcy and what it can do for your family…for FREE…and at NO-RISK.

Find out answers & options for FREE!

Why? Because we offer a totally FREE ANALYSIS of your entire financial situation.

This means you can come in, sit down, get all the answers, and find out all your options (bankruptcy and othewise)…and do it for FREE. GUARANTEED!

Our 10 EXCLUSIVE GUARANTEES!

And…that’s not all. To make you feel more willing and less hesitant to come see us…know that we offer 10 different GUARANTEES. We just want you to get this valuable information…and to know that you can do so…AT ABSOLUTELY NO-RISK.

Want to find out about our 10 GUARANTEES? (Click Here)

If you know us at all, you know that we are not high-pressure. That’s just not who we are or how we work. The truth is…we don’t need to “sell you” on anything. If you need it…the help and relief the bankruptcy laws provide sells itself.

Trust me on this…when I say “You will be amazed when you find out…not what you have always heard but…how bankruptcy really works”…we’re not kidding and we’re not exaggerating.

The truth is the Bankruptcy Laws are the biggest secret there is…right in plain view.

You see, what happens is that you have heard so much bad about bankruptcy that…if you are like most people…you turn off at the mere mention or thought of filing bankruptcy.

But…even though you don’t know me…do me one favor. Don’t believe it. Don’t believe what you have heard. It does not work at all the way you have been told.

There is a good reason why 1.5 million families filed for bankruptcy last year…and it wasn’t because bankruptcy was so bad. Think about it…Maybe it was because…in reality…bankruptcy was so GOOD.

Maybe filing bankruptcy is right for you…maybe not.

But with a totally FREE ANALYSIS available to you…you have nothing to lose.

So, don’t wait. Call today!

Better yet, call now because every dollar of your hard earned unemployment benefits you spend on bills and debts you could get rid of…is…arguably…a dollar wasted…and a dollar wasted is a dollar no longer there to take care of your family.

During normal business hours…call toll free 1-800-899-1414

The Law Offices of John T. Orcutt
Offices in Raleigh – Durham – Fayetteville – Wilson

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Published Tuesday, February 9, 2010 @ 6:39 pm

If you couldn’t tell by the utter onslaught of tax preparation service ads and the sudden presence of temporary cubicles in that once abandoned retail space at the corner of your favorite strip mall, let us be the first to remind you that it’s tax season.

We take interest in this time of year because tax returns can mean one of two things to our readers: more debt or more money. Since we are all about helping you figure out what to do with your debt, we hope this post will educate you regarding what tax season can mean for your financial well-being.

There are number of tax deductions out there that get ignored by a lot of families. Worse yet, they are not even addressed by many of the “come-and-go” tax return preparation services out there. On that note, we encourage you to take caution when deciding who to work with if you are not someone who handles returns on your own. We should also point out that there is good reason to hire someone to help with your tax returns, primarily to alleviate stress and ensure they get done correctly.

That being said, make sure that the person you hire is an actual financial professional, not someone who was just trained to punch data into a computer program. Ask friends or co-workers if they can recommend a reliable Certified Public Accountant that has a tax service. Yes, it will cost you more money, but not that much more.

If you have no choice but to use a temporary tax shop, ask for the most senior member of the team. Many of these operations do have supervisors on staff with actual accounting and tax experience. Remind them that there are countless shops just like theirs that would prefer your business to encourage the top person to give you appropriate attention.

To further ensure you are getting the service you deserve, remind your tax preparer about the most often missed tax deductions. An article on MSNBC.com highlighted seven of them, which do require you to itemize:

• Home ownership deductions can include mortgage interest, property taxes, fees involving the sale of your home and agent commissions.
• In North Carolina, the personal property tax you pay on your car each year can also be a deduction.
• Always hang on to your receipts for charitable donations, even the bags of clothes you gave to Goodwill. When any charity asks you if you want a receipt, say yes.
• Did you know you can deduct mileage expenses if you use your own car in a charitable effort? You can. Go back and write down when you did and even keep receipts for bus trips to the location of your volunteering. Parking fees and other tolls count, too.
• If you had to travel for work, keep track of any dry cleaning and laundering receipts for clothes you needed on behalf of the company. This only counts if you are required to look the part and don’t try it with the torn jeans you wear on the flight.
• Also related to business travel are the costs of shipping materials or paying for your baggage, which many airlines now require. So hang on to those receipts as well.
• Other miscellaneous deductions related to work include costs for faxes, Internet access or hotel phone calls.  You may also be able to deduct moving expenses. Make sure you provide good proof that the costs you incurred are directly related to the available deduction category.

We would hate to see your tax bills become the reason you have to file bankruptcy.   However, if you have been stuck with a large tax bill from the past, or if you anticipate owing taxes that you can’t pay all at once, you should consider bankruptcy as an option to either discharge taxes eligible for discharge or pay certain taxes that can’t be discharged over a period of several years through a Chapter 13 plan.   If you have any questions about how tax bills are handled in Chapter 7 or Chapter 13 bankruptcy, give us a call, we’ll be glad to help.  Call 1-800-899-1414 to schedule a FREE consultation with an experienced bankruptcy attorney at the Law Offices of John T. Orcutt.

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Published Sunday, February 7, 2010 @ 7:43 am

Facing foreclosure.

Escalating medical costs.

High interest credit crunch.

Rising unemployment.

And that’s just January 2010.

While times are admittedly tough for everyone—with the poor getting poorer and even the recently rich and famous falling on hard times—a truly unique phenomenon of the recent global recession and continual economic downturn is how catastrophic it’s been for our country’s middle class, driving many in the majority further and “further from the American Dream” and, in some cases, “directly into poverty.”

As The Huffington Post reported this week in Laura Bassett’s insightful article “Middle Class No More, Families Struggle to Fight off Homelessness,” those in power are not blind to the desperate bind of average Americans: “President Obama, in his remarks to Senate Democrats on [February 3], pointed out that the middle class was hurting even before the recession. ‘Part of the reason people are feeling anxious right now, it’s not just because of this current crisis — they’ve been going through this for 10 years. They’ve been working and not seeing a raise. Their costs have been going up, their spouses going to the workforce — they work as hard as they can. They’re barely keeping their heads above water. They’re trying to figure out how to retire. They’re seeing more and more of their costs on health care dumped in their lap. College tuition skyrockets….They are more and more vulnerable, and they have been for the last decade, treading water.’”

As part of Huff Post’s Bearing Witness 2.0 project, the online aggregator has culled a host of local stories of formerly middle-class folks who are now “struggling to stay afloat.” If you or someone you know is similarly situated, you’re encouraged to e-mail your story.

One such troubling tale is that of construction worker Troy Renault who, along with his wife and five children, has been forced from their 1900 square foot home in Lebanon, Tennesse into a donated 215 square foot trailer nestled in a local campgrounds. The cause of their “slide into homelessness?” Renault lost his job two years ago and the family was forced to make difficult choices. As Renault told Mike Osborne for Voice of America News, “You wind up starting to think to yourself, ‘Okay. Do we go ahead and make the house payment and keep a roof over our head but have no lights and no water, or do you go ahead and keep those utilities on and forego the house payment, and hope that you can get it caught up?’ And it just kept going where it got further and further behind until we wound up losing the home.” Osborne writes: “Tammy Renault says her family is getting a crash course in what it means, socially, to be labeled homeless. ‘It’s being called names. It’s being ridiculed. It’s running into people that have seen you in your highest and are not even speaking to you anymore because they’re too afraid for where you are and don’t know what to say.’

Stories like the Renault’s are made more difficult with the onset of winter, as many former middle class citizens, and now, newly disenfranchised, are forced to make decisions of life or death.  As Steve Neavling reports in the Detroit Free Press, Michigan area middle classers can barely afford heating bills that would keep their families warm in another brutal Midwest winter. “Unemployed and unable to find work, 42-year-old Jim Lowe received a shutoff notice at his home last week and says he’s unable to pay the $174 that’s overdue. ‘It’s definitely a wake-up call,’ Lowe told Neavling. ‘We’re three months behind on all of our bills. I just pray this gets better soon.’ State and local agencies estimate an unprecedented 150,000 metro Detroiters are at risk of having their heat shut off if they don’t receive help paying their bills. The number of people seeking state assistance so far this winter jumped 30% over last year at this time, according to the state Department of Human Services.”

And yet while unemployment, arrears in a mortgage, and other unexpected challenges for members of the middle class may be life-altering, they need not be life-threatening. Bankruptcy provides, in the form of Chapter 13 and Chapter 7,  an undeniable array of options for those with mounting debt and facing foreclosure.

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

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Published 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 Sunday, January 31, 2010 @ 7:38 am

There is so much we do not know about the things that put us into debt. From credit card fine print to car lease agreements and as the last few years have demonstrated, even the most basic facts about our home loans.

To anyone with the ability to fog a glass, it is more than evident that our collective ignorance on these matters is precisely what causes our country to carry so much personal debt. And despite the government’s best effort, whether in credit card reform or mortgage assistance programs, the only way to solve our financial problems is for the American consumer to educate itself as to the practices, jargon and bureaucracy that obfuscate the critical, debt-inducing rules of credit and loan products.

However, education, specifically student loans, is one of the things helping to add weight to America’s debt anchor. They have caused countless bankruptcies and yet remain a non-dischargeable debt under Chapters 7 and 13 unless you can prove that paying them will cause a substantial hardship on your family. As if the bankruptcy itself was not enough hardship.

Those in the student loan profit circle are hesitant to ever address the debt issue in public, despite it’s prevalence on so many household balance sheets.

In a Wall Street Journal column, an expert on the student loan debt problem cited a 2003 report by the Department of Education with some staggering statistics. It stated that default rates for loans that cover 4-year, 2-year and for profit colleges are 25 percent, 35 percent and 45 percent. In simpler terms, around one in three students default on the loans they accepted to pay for education.

Not sinking in yet? Try this: the student loan default rate is higher than credit cards, sub-prime mortgages and even over the counter payday loans. Yet, the issue is never introduced or addressed in Washington circles, even in the midst of today’s middle class stabilization efforts.

Even though the Department of Education (DOE) created and published the report demonstrating the nation’s difficulty in repaying student loans, it later boasted complete confidence in a full return on every loan it issues plus a 20 percent boost in interest and fees on forbearance, adjustments and default penalties.

Now, mix in organizations like Sallie Mae, who buy, issue and oversee billions in student loans and also own collection companies to track down those who can’t pay, and it’s easy to understand just how much money is being made on the back-end of our college diplomas.

The higher-ups in Washington are in on it too, as a number of very common consumer protections that apply to most loan vehicles, such as the bankruptcy code and truth in lending requirements simply can’t be found in the fine print of your student loan. Thus, the DOE is the lone source of control when it comes to student loans, wielding powers over your wallet and financial stability like no other wing of our democracy.

And it’s only going to get worse.

Reuters is reporting that the rate of student loan growth in the last two years is close to setting records, jumping 29 percent. In total, there are now close to 69 million student loan accounts open in the United States. This is primarily because the recession has put so many people back into the classroom to refresh job skills, obtain additional degrees or change careers. Additionally, with so many parents out of work, more children have to apply for loans to cover their schooling.

In total, the country now owes close to $527 billion in student loans. And just about every penny of it will be repaid. Plus interest.

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Published Tuesday, January 19, 2010 @ 3:02 pm

So you’re drowning in debt and desperate for a way out. A friend or relative asks if you’ve considered a 401k loan. “They’re quick, simple to qualify for, and here’s the best part: you’re paying the interest to yourself.” Sounds like a brilliant solution, right? Why pay 25% interest to a credit card company when you could be paying 6% interest to yourself?

Stop. You want to think long and hard before you take out a 401k loan, especially if you’re already in debt.
Fayetteville debt relief,
The most important thing to know is that, in bankruptcy, your retirement savings – 401k accounts, pensions, 403b accounts, traditional IRAs, Roth IRAs and even plans for small business owners and the self employed – are protected from your creditors. That bears repeating. If you declare bankruptcy, you keep all the money in your retirement accounts.

If you’ve taken the money out in the form of the loan, however, your creditors can take that money.

Moreover, failure to pay back a 401k loan comes with serious drawbacks. If you lose or change jobs, you have to pay back the entire sum within 60 days. If you’re unable to make payments on the loan – or the lump payment in the case of changing jobs – you’re required to pay all taxes on the outstanding money, plus a 10% penalty.

In addition, recent court cases have determined that because you’re paying the money to your own account, a 401k loan cannot count as debt, and is not part of the Means Test. This means that you could be tipped into a Chapter 13 plan even if you’re spending significant amounts of money repaying a 401k loan. If you’ve already borrowed the money, though, don’t despair. It’s true that it might bump you into filing Chapter 13 rather than Chapter 7. However, while the Means Test is very similar to the disposable income formula in a Chapter 13 bankruptcy, there’s one important difference and that’s the 401k. You’re allowed to both contribute to your 401k in a Chapter 13 plan, and to repay your 401k loan, and take both as a deduction on the means test. This means your plan payment may actually be lowered if you are making a 401k repayment.

There may be times when 401k loans aren’t a terrible idea, even if you’re facing bankruptcy. It might make sense, for example, to take out the loan in order to catch up with mortgage payments before you file bankruptcy. But this is a situation where you should really discuss the pros and cons of your actions with a bankruptcy attorney before undertaking the loan. One important rule of thumb: it doesn’t make sense to take the loan out to repay unsecured debt, debt that will most likely simply be dismissed in bankruptcy.

One final note: not every 401k plan permits loans for any reason. Some plans restrict them to specific purposes, such as first time home loans, medical expenses, college tuition or mortgage payments. Before even considering this option, you need to make sure it’s available to you.

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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, January 5, 2010 @ 6:45 pm

Okay, so this post isn’t exactly keeping with the recent holiday spirit, but it’s a pretty compelling topic given the nature of our blog. And sometimes, it takes extreme colors to paint the right picture.

A Tampa, Florida woman is suing a debt collection company for wrongful death relative to her husband’s 2005 heart failure. Dianne McLeod is charging that the ceaseless and what can rather easily be deemed as remarkably unprofessional phone calls contributed directly to the stress that initiated her husband’s cardiac arrest.

In 2002, not long after her husband had to be airlifted to a hospital because of heart trouble, the following message from an alleged Green Tree Servicing representative was left on the McLeod’s answering machine:

“Stanley McLeod, you need to call Green Tree and get your act together and make your payments on your mortgage and quit playing these games … Why don’t you have that helicopter pick you up and bring that payment to the office?”

Making such a message even more hard to believe is the fact that it was because Stanley could no longer work that contributed to the family’s debt problem. Disability payments were not enough to pay the bills. So the mortgage company hired Green Tree.

The collections company did not create Mr. McLeod’s heart disease. However, Green Tree is accused of calling on some days up to ten times. They were also contacting the McLeod’s neighbors. When they could reach Stanley, he would become so upset with the caller’s tone that he would begin to sweat just listening to them. He would also complain of chest pain after hanging up. His widow is certain the company’s demeanor and highly aggressive approach led to a rapid increase in stress and anxiety on an already strained heart.

Regulated by the U.S. Federal Trade Commission, debt collection efforts are often subject to scrutiny by those in debt. While the laws in place are meant to protect consumers, they are by no means tangible enough to be properly enforced within every debt collection office cubicle in the country. Many collection agents are short-term, hourly employees given a few days of training, a headset and computer-controlled call list. More over, the bonus structure for dollars collected creates a competitive work enviornment, which can easily lead to collection efforts that skirt the federal guidelines. No other industry receives more complaints than debt collection.

A representative for the company flatly denied the company’s attempts to seek restitution from the McLeods contributed to Stanley’s death.

“The collection activity did not lead to his death. The claim is meritless,” said Brian Corey of Green Tree Servicing. “We deny that the content, the number or the timing of the calls had anything to do with him dying in 2005.”

Scare tactics have long been an effective method by which to collect money owed. Heck, it’s the very strategy upon which the mafia is built. Now, that’s a reference used only to demonstrate that when typical collection efforts may not be effective, an inexperienced and frustrated collections agent may be tempted to resort to tactics not considered “above board.” And, it’s a comparison supported by industry analysts.

Billy Howard, the attorney representing Ms. McLeod, said his firm is also representing close to 500 individuals against companies that use, what he deems “Tony Soprano tactics.” Tony Soprano is a fictional mobster who glorified mob life in HBO’s series “The Sopranos.”

Howard states that most consumers, afraid of debt repercussions and stressed to the hilt, do not know which end is up financially, let alone the esoteric laws regarding debt collection. “Scare tactics work. They’ve worked for years. People are scared,” he said.

The McLeod trial will start in January. Happy New Year.

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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 Sunday, December 20, 2009 @ 2:45 pm

The full extent of the new credit card legislation will not kick in until February 22. And since its announcement, many of us have been experiencing the credit card companies’ efforts to remedy the government action.

For example, card companies are quickly pushing interest rates, doubling minimum payments, sneaking in fees and lowering credit limits, even for cardholders with solid credit histories.

Back in August, the first wave of reform took effect, requiring card issuers to provide additional notice of account changes, such as rate changes or fee hikes. In February, the second wave will impart on card companies the responsibility to limit interest rate increases on current balances. Next summer will see the final phases of the law involving reduced fees.

Truthfully, if you have thought about bankruptcy recently but are holding out hope that these new laws are going to fix your credit card debt problems, we have news for you: you need to call us. And quickly. Your bills are only going to continue to mount and could even get worse. Because the folks on the other side of your Visa, MasterCard and Discover statements still have ways to encourage you to spend and at the very least, know how to continue to make additional money off of your monthly balances.

While the new legislation will prevent credit card companies from jacking your interest rates on an existing balance, they will still be able to raise your rate after a late payment or other form of “agreement violation.” And, they can raise those rates by any amount they deem reasonable. Rest assured, their definition of “reasonable” is not the same as ours.

One of the loopholes in the new legislation (called the CARD act) is that it only addresses existing fees and rules. Card companies can create new fees at will. A representative with www.lowcards.com, a Web site devoted to helping consumers understand credit cards, recently stated, “Theoretically, they could create a fee for names that begin with ‘J.”

Annual fees, online access fees, inactivity charges—you name it, could become familiar numbers at the bottom of your monthly statement. Fifth Third Bank starting using a $19.00 inactivity fee if a card is not used for 12 months and Citibank is implementing fees for some customers who don’t spend more than $2,400 a year.

Credit card issuers will also be doubling minimum balance payments and in some cases, by even more. For a person carrying a $5,000 balance, that payment, typically at 2 percent, could be as much as $250, which amounts to 5 percent of their balance. For many, this could be the scariest component of a card company’s profit strategy, as most cardholders use the minimum payment as a benchmark for staying afloat.

Thankfully, Washington has recognized the practices underway in the credit card industry and proposed, under House Financial Services Committee Chair Barney Frank (who else?), the Consumer Financial Protection Agency. The purpose, among many others to be sure, of this regulatory entity would be to approve credit card fees.

Credit card companies might want to exercise caution as they proceed, however. This is the age of the vocal consumer. Viral ground swells of protest can flow quickly via the Internet, especially through social media pathways. A woman recently posted her disgust with Bank of America’s actions relative to a interest rate hike on YouTube. It resulted in her rate being reduced to its original amount.

Does that give you any ideas?

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Published Sunday, December 20, 2009 @ 12:31 pm

Wouldn’t it be easier sometimes to not have to shop for Christmas? It sure would be nice to just enjoy roasted chestnuts, old music and making popcorn strings.

But this is America, and we like to spend. In fact, many experts note that the holiday season is when many of us start our forays into bankruptcy-inducing debt. Or to put it another way, the credit card companies love December.

There is no question that the commercial aspect surrounding the holidays make it exceptionally difficult to not get caught up in the haze of bargain-basement BluRay players and trendy wind-up hamsters. It seems every year the gift list grows by a few more folks. New nieces and nephews, a step-son or two maybe.

If debt is already making you worry about having to pay for holiday presents, don’t be afraid to speak up. The holidays should be fun, not stressful. You may be surprised at just how many of your family members feel the same way about gift buying that you do.

So, have you wondered how much you could save by not buying gifts this year? Well, thankfully the people at Forbes.com put together a brief rundown of how you could probably better spend your debt-earned cash this year.

While spending is expected to be down this year, it will not match the 30 percent decline that happened between 2007 and 2008. According to Forbes, in 2008 we spent:

• $431 on family members
• $119.82 on ourselves
• $94.52 on friends
• $26.70 on co-workers
• $43.50 on miscellaneous items

Grand total? $750.68. Surely that’s money better spent on a Visa balance.

If you wanted to take the anti-holiday spending project to another degree, you could choose to not buy a Christmas tree this year, too. That will net you another $41.50 in savings. Understand, that is only the national average. Every corner stand in the Triangle has several $100.00 fir trees. Figure about $10 per foot.

Since Thanksgiving doesn’t teach us anything about gluttony, despite how loudly we declare to never eat another bite, the subsequent holiday parties and cookie tins continually take their toll. Especially on our checking accounts. An organization called Information Resource, Inc. conducted a poll that found 94 percent of Americans plan to limit spending on holiday food to under $500.00. For beer, wine and liquor, the results showed that 90 percent of us only plan on spending $200.00.

Hate traveling during the holidays? Who doesn’t? a 2008 Maritz poll found that people who make between $35,000-$250,000 a year will average $960.50 on holiday travel. That’s hard to even think about. Try Skype and a Web cam this year. You’re not exchanging gifts anyway, right?

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Published Saturday, December 12, 2009 @ 7:51 pm

Most of us never see the writing on the wall until conditions have gotten way beyond any conceivable point of return. We never realize how much weight we have gained until our baggy pants are no longer baggy. We also do not realize how fast and far we have managed to get ourselves into debt.

That mocha latte at Starbucks on the way to work adds up over time. The occasional muffin every other trip does too. A few new DVDs and CDs for your collection can’t hurt, right? When you buy a two or three of each a month they do; especially if you buy Blu-ray! Running down to the deli for lunch tends to add up as well. It’s nice to be able to give people nice gifts too; the look on their face can make it all worth it. In time, the lattes, muffins, and everything else tends to add up. Without knowing it people tend to spend a lot more than they realize.

So you like to live it up a little? You work hard; you deserve to play! Can’t be doing too much damage if you are making all your credit card, house, and car payments, right? That could not be further from the truth. Recent mortgages tend to have people pay heavily on the interest at first. So all that time you think you are building equity you really aren’t. As vehicles become more reliable they are starting to cost more, too. With dealerships willing to approve almost anyone (some at more extravagant terms than others) it can be real tempting to get a really nice new ride to go along with your new job.

Credit cards tend to really kill people. If you pay off the balance each month than your okay and don’t really need to be reading this blog. However, if you are like most of you tend to run a balance each month. Chances are you have a few credit cards that you do that with. It doesn’t take long for the interest and fees to add up on most credit cards. Before you know it those four dollar lattes and ten dollar CDs are costing much more than you paid.

Most people tend to believe that just because they are making their bills that they are doing okay. What they fail to realize is that just making the payment is the beginning of the end of your financial security. What if your car breaks down? What if you need surgery? What if you lose your job? Just paying the bills each month is a surefire way to leave you open to future financial difficulties.

If you’re struggling to keep your head above water and are starting to feel the pinch, it may be time to sit down with a bankruptcy attorney. The Law Offices of John T. Orcutt offer a free initial debt consultation. Call today to learn about your options. Don’t wait until it’s too late.

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Published Saturday, December 12, 2009 @ 11:25 am

Most people who have filed for bankruptcy understand the feelings of angst and dread that accompany the weeks and months before you make the decision to file.

Eventually, the walk to the mailbox becomes an exercise in personal bravery and the sound of the phone is like a bomb going off inside your psyche, sending shards of guilt-shrapnel into your chest. It can be a painful, daily challenge that can wreak as much physical damage as mental.

The feelings caused by severe debt, generate stress hormones in your body, similar to the “fight or flight response.” (Which is why you often become so angry at collection agents.) As the stress accumulates, it can actually cause damage to the heart, immune system, your memory and digestive tract.

A scientist-led phone poll determined that people who carry a higher level of debt-related stress have a much greater chance of suffering severe headaches and migraines than those with far lower levels of financial worry. The rate of difference was 44 percent.

Ulcers and increased nausea are also factors indicative of high-levels of debt related stress.

What can also lead to physical health problems is the way people eat when stressed. Fast food restaurants, where low prices meet high calorie counts, become proverbial therapy centers for the financially distraught. And, in the midst of a difficult, historic recession, the largest food chains are doing all they can to attract the budget conscience and food-weary, sending the value menu message across the airwaves, billboards and magazine stands of America as quick as you can say “Super-size it.”

But thankfully, it appears as if America isn’t getting the message. Analysts have found that fast food sales are sliding into the fryer as more of us stay at home, out of work and focused on family. In fact, grocery store chains are seeing increased profits because, as one industry analyst put it, people are “turning on their ovens again.”

Shopping for and planning meals is one of the best ways to ensure your health and save money in the midst of a financial crisis. The more time you take to consider what you are consuming, the more conscious you will be about it how it affects your system.

Nevertheless, the fast food giants will be working hard in the New Year to earn back your Kroger money, for example:

• McDonalds will be unrolling the Mac Snack Wrap, which is essentially a Big Mac in a tortilla. It will also push $1 Sausage McMuffins and 12-ounce coffee. (It should be noted that it’s about time we got back to the $1 cup of coffee.)
• Despite a lawsuit from franchise owners over the profit-depleting $1 double cheeseburger, Burger King will continue to sell it until further notice. It is also testing in some markets something called The Little Enormous Sandwich, a breakfast option with egg, sausage, cheese, hash browns and … wait for it … bacon. It’s also dishing out a $1 chicken sandwich and will go after it’s biggest rival’s EggMcMuffin with the $1 BK Breakfast Muffin.
• Oh, and Taco Bell, whose ignorance of the food pyramid is almost stunning, will unveil an 89-cent Beefy 5-Layer Burrito and then the Five Bucks Box with four food items and a medium drink. It also has several breakfast (Taco Bell in the morning!?) items for under a $1.

We can certainly understand the lure of a cheap meal when the money just isn’t there. But there is simply no dollar amount that can match the value of your well being, especially when your family needs you most. The combination of terrible food and debt-related stress will only lead to you filing for bankruptcy because of medical debt instead of just credit card debt.

Take care of yourself, physically and financially.

Brought to you by the North Carolina bankruptcy experts: The Law Offices of John T. Orcutt. Call 1-800-899-1414 to schedule your free initial debt consultation today. Offices in Raleigh, Wilson, Fayetteville and Durham.

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Published Friday, December 4, 2009 @ 12:15 pm

We’ve all heard that money problems are the leading cause of marital problems. If you’re reading this article, chances are you’re experiencing both problems. In this economy, with unemployment, foreclosures, and debt at record highs, you’d be hard-pressed to find couples who don’t fight about money!

Financial problems can wreak havoc on your marriage, leading to constant arguing, blame-laying, and even divorce. In fact, when the economy suffers, couples are far more likely to consider divorce as a solution to their problems.

Some couples might think this solution sounds reasonable, even tempting. No more fighting about—you guessed it—money. No more seething tension fueled by bills, debt, and money worries. No more arguments and accusations over who spends more, who earns less, or who should pay the bills.

But is divorce necessarily the solution when it’s your debt that’s to blame?

What if you could eliminate your debts and save the personal property you and your spouse have worked so hard to accumulate? What if you could stop fighting about money?

What if you filed bankruptcy?

Would the fighting end if you and your spouse got a clean slate? A fresh start? What if you got the chance to re-establish your financial goals, make new plans, and move forward with your life together? Imagine the marital peace that could result from financial peace of mind!

You do have options other than divorce. An experienced bankruptcy attorney can help you salvage your marriage and rebuild your life by reducing, restructuring, or eliminating the debt that’s at the center of your marriage problems. For those who qualify, a Chapter 7 bankruptcy filing can erase your credit card debt, your personal loans, and your medical bills. It can erase the cause of most of your marital problems!

Whether your financial problems are due to job loss, the downturn in the stock market, an increase in your adjustable rate mortgage, medical bills, or rising credit card rates and fees, you don’t have to let your financial problems ruin your marriage! Financial stress can quickly build to the breaking point. But if you could save your marriage, wouldn’t you?

Save your marriage. Save your home, your car, your property, your family. Call the Law Offices of John T. Orcutt at 1-800-899-1414 or visit www.billsbills.com.

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Published Wednesday, December 2, 2009 @ 4:07 pm

Are medical bills and health care costs making you sick? Join the crowd.

A recent study from the Commonwealth Fund found nearly two-thirds of American adults—an estimated 116 million people—are buckling under the weight of medical bills, going without much-needed care because of cost, are uninsured for a time, or remain underinsured.

As a result, more adults are not only experiencing cost-related delays in getting needed care, but are also struggling to pay unexpected or accumulating medical bills. Currently, forty-one percent of working-age adults, or 72 million people, reported a problem paying their medical bills or had accrued medical debt, up from 34 percent (58 million) in 2005.

Medical debt can take the wind out of anyone’s financial sails. And unfortunately, horror stories are common. Take for example a recent story regaled from the Austin-American Statesman of woman who reconnected with an old high school flame in middle age only to lose him to liver disease a short time later. Struggling to pay his medical bills, she eventually filed for bankruptcy, but not before she lost her home.

Medical bills are a leading cause of financial stress in this country; exacerbated by the fact that most people wait too long before they get help taking a serious inventory of their financial picture. In some cases you can restructure or even settle medical debt before it means losing your savings, your home and a hefty chunk of your financial viability; but you should move fast.

Once your medical bills go to a debt collection agency its much more difficult to negotiate a settlement. If you see that your medical bills are causing you to fall behind on payments for essentials like housing, food and emergency savings, it’s time to seek help from a professional debt counselor.

However, sometimes restructuring or settling medical debt can have a deleterious effect on debtor credit scores, also affecting your ability to obtain home loans or credit cards. An article in the Dallas Morning News shared the story of a man who suffered a heart attack during a lapse in his health insurance. Because of a gap in his insurance, the 59-year-old was hit with medical bills totaling more than $140,000—all of which went to collections when the man could not afford to pay. Eventually, the man was able to pay off his medical debt when the hospital reduced the bill; however, the medical debt’s impact on his credit remained. He paid his debt and his credit score still dropped significantly. Today, he’s having difficulty refinancing his home and is still on the hook for his surgery.

Might bankruptcy have been the better option? Possibly. With millions of Americans suffering from medical debt, much of that debt has gone to collections. Collections action on medical debt remains on a consumer’s credit report for 7 years and many lenders consider the medical debt when determining the consumer’s creditworthiness. And unlike the man from the previous story, most consumers are simply unable to repay medical debt as well as their other mounting financial obligations.

Bankruptcy has the effect of wiping out the obligations to repay unsecured debt, including medical debt, giving the debtor an opportunity for a stress-free financial fresh start. As an added bonus, a creditor might be more willing to lend to a debtor who have discharged his debt obligations in bankruptcy than to a debtor who is still obligated to pay thousands towards medical debt obligations.

For more information regarding the benefits of bankruptcy, visit The Law Offices of John T. Orcutt online.

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Published Sunday, November 15, 2009 @ 12:37 pm

Are you a married couple, but only one of you earns income and holds assets? Or maybe only one of you has acquired debt during your marriage? If you’re married and considering a bankruptcy, you might be wondering whether you and your spouse both have to file bankruptcy.

The answer: while you and your spouse do not both have to file bankruptcy, usually, if a bankruptcy is necessary for one spouse, both spouses will end up filing.

If, for instance, both you and your spouse are liable for a debt and only one of you files under Chapter 7, the creditor may later attempt to collect the debt from the non-filing spouse, even if he or she has no income or assets! In other words, the creditor will simply demand payment for the entire debt from the spouse who didn’t file. So in this case it makes sense for you both to file.

If, however, only one of you has incurred debt during your marriage, only the spouse with the debt needs to file bankruptcy. In states like North Carolina, which is not a “community” property” state, even if you are married—if you did not sign for the debt, you do not owe the debt, and you do not necessarily need to file bankruptcy.

What if you just got married and most of the debt belongs to just one of you? As long as you didn’t sign for your spouse’s premarital debt, only the spouse with the debt has to file bankruptcy.

And what about a Chapter 13? If you both qualify for a Chapter 13 and if you are both liable for any significant debts then you should file jointly under Chapter 13, even if only one of you has income!

Whether you’re considering Chapter 7 or Chapter 13—if you’re married and considering bankruptcy then both of you should consult with one of the attorneys at the Law Offices of John T. Orcutt to ensure that both of your best interests are carried out. Visit us at www.billsbills.com or call us at 1-800-899-1414.

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Published Wednesday, November 11, 2009 @ 8:49 am

You’ve seen the ads: a circus act of food court commodities are passed around by a mash-up of merchants to the frenetic marching music of patrons efficiently paying for their delicious delicacies with their handy-dandy Visa cards. Like a well-oiled, money-sharing machine, these well-choreographed consumers pay conveniently with a single swipe of credit, serving up little wait in their collective go-go-gadget gaits and emphasizing, with every single swipe, the efficiency and speed of making everyday purchases with a Visa check card over cash or checks. This plastic parade ends abruptly when a lone cash-carrier has the audacity to pull out his greenbacks for one show (and music) stopping dark ages transaction. The record scratches. The cashier looks cranky. And the message is clear: in a world where plastic rules, only a party pooper pays with cash.

More and more, life does take Visa. And Mastercard. And Discovery. And a whole host of other plastic pinch hitters ready to step up to bat when your bank account can’t. This point is not lost on more and more savvy small purchase institutions and organizations. From cabbies to Salvation Army kettles, more and more businesses are getting into the single swipe game, and whether it’s because of convenience or economic circumstances, Americans are taking the bait, at the expense of low credit card balances.

And for those Salvation Army kettles at least, these results are certainly panning out: national Salvation Army surveys show that people give more when they are allowed to donate with credit, sharing 750 percent more when paying with a card.

The science of our single swipe economy supports this trend. Following an examination of the brain and how people feel when they spend, Carnegie Mellon University professor George Loewenstein hypothesized that credit cards take away the pain of spending. From an article summing up Loewenstein’s work in Carnegie Mellon Today it was found that:

“[T]here’s a battle in the brain between immediate pleasure and immediate pain when we’re deciding what to buy. … The subjects in the MRI study weren’t thinking about what benefits they would gain at some later date if they chose not to purchase The Family Guy DVD set now. Rather, they were deciding based on how painful (or not) they thought paying for it would be right now.”

Combining the “feel-good” factor of plastic, the financially-strapped consumer population, and wide-acceptance of credit for cash, this looks like a recipe ripe for a consumer crisis that plays right into the hands of the credit card companies. So what should you do?

Try carrying cash-only.
Foregoing your credit cards for cash and carry—even for a few days—can make a huge impact in the psychology of your spending—bringing back the pain (and the gain) of using only what you have. While we remain disconnected from our spending with plastic, cash-only provides the necessary perspective that leads to healthy budgeting and better buying judgment.

Make room for fewer cards with lower limits.
When you do carry credit, only keep what you need for well-thought-out purchases and emergencies. With fewer cards and lower limits, you’ll rely more on cash, which could help head off budget-breaking impulse buys.

Plan through the pain
If the pain of past spending on plastic is getting you down, Chapter 7 bankruptcy is an option designed to quickly clear credit card debt. Click here for more information about how the bankruptcy experts at The Law Office of John T. Orcutt can help you out of your own personal credit crisis.

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Published Tuesday, November 10, 2009 @ 11:16 am

The number of people filing bankruptcy due to medical bills has been rising every year. A recent study in the American Journal of Medicine shows that more than 62% of people filing for bankruptcy do so at least partly because of medical bills they can’t pay. Many filers have insurance – often they’ve ‘capped out’ their insurance and the insurance company refuses to pay any more bills, leaving them tens or even hundreds of thousands of dollars in debt. In other cases, illness has forced people to lose or leave their jobs, meaning that not only do they have no money coming in to pay their bills, but their insurance coverage has often lapsed as well.

A bill recently introduced in Congress – by Carol Shea-Porter (D-NH) in the House and Sheldon Whitehouse (D-RI) in the Senate – hopes to make filing bankruptcy easier for people in this situation. People who owed either 10% of their income or $10,000, or who had been out of work for more than 4 weeks in the last year due to illness, would qualify as medical debtors. The bill would exempt these filers from the requirement to take credit counseling. More importantly, they would no longer be subject to the means test – all medical debtors would be allowed to file Chapter 7. And the homestead exemption – the amount of equity they could keep in their home after filing bankruptcy – would rise to $250,000 for medical debtors.

Will the Medical Fairness Act pass? It’s hard to say. To some extent, the debate seems to be falling along the same lines as the general health care debate: democrats for, republicans against. At a recent hearing in the Senate, Whitehouse brought in a number of debtors to make the emotional point that they lost everything, including in many cases their homes, due to unavoidable medical bills. Kerry Burns told the tragic story of her son, who died at the age of 4 after a long struggle with cystic fibrosis. She and her husband both took leaves from their jobs. They cashed in their 401K accounts, spent every penny in their bank accounts and had insurance– and all that wasn’t enough to pay their son’s medical bills, which came to over five million dollars.

Republican opponents, particularly Sen. Jeff Sessions (R-AL), seemed unmoved. Sessions seemed more concerned with the plight of the credit card companies, who will likely lose money if more people file Chapter 7. Sessions worried that people would qualify as medical debtors when the ‘real’ reason for their bankruptcy was due to overspending on their credit cards. He called experts who claimed that the study was flawed and the real role of medical bills in bankruptcy is much smaller. Others rebutted both arguments, pointing out that the number of medical debtors may be greater than the study shows, as many people put medical bills on their credit cards.

The Democrats have the votes in both the House and the Senate to pass this bill. But the credit card companies and the medical industrial complex spend an enormous amount of money on lobbyists to protect their interests. The Medical Bankruptcy Fairness Act is a common sense relief for people who’ve incurred enormous bills simply due to their medical problems. Whether or not it passes says more about politics than policy.

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Published Thursday, October 15, 2009 @ 6:06 am

Getting a pay day loan can be ever so tempting. You think to yourself, I only need a “bridge” until my next paycheck; this is a “short term” solution for a “short term” problem; this is an easy “fix”; I can get help without going through the humiliation of a credit check I’m bound to fail. These are the kinds of messages pay day loan companies relay in their advertising, which also goes a long way to generate the impression in you that these companies–unlike the large, impersonal banks who don’t seem to want your business–are run by people who just want to help you. Don’t fall for it–sometimes nostalgia is for the birds!

If you find yourself constantly relying on payday loans, your financial strategies need a drastic makeover―fast. There is no better example of throwing good money after bad; the first loan transaction with a payday loan company is a huge rip off, and every subsequent one is more of the same.

Payday loans rake in a lot of money even though they are lending to high risk customers. So how do payday loan companies make their money anyway? By counting on you to roll over that loan. The company knows, perhaps better than you, what is likely to happen. You are in financial trouble, obviously. You are short on cash, or you wouldn’t have requested the loan in the first place. So what’s going to change in your financial circumstances between now and your next paycheck? Probably nothing. The only difference will be that part of that paycheck will be gone before you get it. Chances are all too good that soon–even as soon as the very next paycheck–you will need to rely once more on a payday loan. Where does it end?

Let’s look at the math. Say something comes up and you unexpectedly need about $500. You can usually spare about $200 out of your paycheck for incidental expenses, so that leaves you with $300 to make up. So you decide you will borrow the $300. You go to a payday loan store and they ask you for a check, postdated for the date of your next paycheck, for $345. This means you are paying 15% interest for a loan that lasts two weeks, or in other words, the equivalent of a 391% APR! This is bad enough, but you’re probably thinking it’s a one time deal. The problem is that your next paycheck arrives, your expenses are the same as they ever where, only now you have a shortfall of $345. Remember in the original example you only had $200 to spare, so where does that extra $145 come from? Most probably another pay day loan.

Luckily for residents of North Carolina, pay day loan companies formerly operating in the state were shut down thanks to the efforts of the state’s Department of Justice. Now “alternative” lenders must operate under state rules, or look to other states for vulnerable customers. However, the danger is still present. Online payday lenders are increasingly available, and can suck your finances dry before you know it. If you are even considering a payday loan or payday advance, filing for bankruptcy protection may be a better option–a lasting, transformative step that can truly form that bridge between the problems of today and the financial security of your future.

In North Carolina, contact the Law Offices of John T. Orcutt and get debt free today. Call 1-800-899-1414 today or visit www.billsbills.com for more information.

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

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

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

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

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

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

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

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

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

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Published Thursday, September 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, August 11, 2009 @ 6:00 pm

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

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

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

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

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

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

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

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

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

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Published Saturday, August 8, 2009 @ 8:47 am

We hear plenty about the dangers of gambling addictions. Perhaps this is because the compulsion to gamble doesn’t make sense to a lot of people, and it is always easier to vilify from a distance.  Or maybe it’s that gambling addictions seem dangerous because a gambler could lose everything in an instant.

By comparison, indulging in little purchases here and there seems rather tame. But even little purchases add up, and when you get a rush from spending, chances are you’ll spend more money and spend more frequently to continue to experience that comfort. Just like someone addicted to gambling, you could lose everything; it may not happen in an instant, but little warning signs ignored for years will add up and catch up eventually.

Compulsive spending and shopping addiction are very serious problems that don’t get as much attention as they ought to. As a result, there are likely many out there suffering in silence. If you suspect you are a compulsive spender, that bad news is that you may be right–but at least you’ve recognized that there is a problem that you want out of your life. Admitting you have a problem is, as they say, the first step. If you think you may have a problem with your spending, take a moment to run through some of the items that frequently appear on compulsive spending checklists:

Is pressure from debt affecting your home life? Is it affecting you on the job?

If you are constantly having fights with your loved ones over your spending, or if you find yourself unable to work because of worrying over your debts, these are classic warning signs of trouble.

Is debt changing how you perceive yourself? How others perceive you?

If you are constantly getting down on yourself over your debt, or if you are afraid for people to find out about your spending, these too are warning signs of trouble. Sometimes people with spending problems justify their behavior by telling themselves that they deserve the things they are acquiring because they are better than other people. If you catch yourself in this kind of rationalization, take it as a warning sign.

Do you play fast and loose when it comes to creditors?

If you’ve ever provided false information in order to obtain credit, or made totally unrealistic promises to your creditors, these may indicate a problem with compulsive spending.

Does spending or taking on debt feel better than it ought to?

Sure, everyone enjoys getting something new, and if you really need a loan and it comes through, it’s natural to experience relief. However, if you live for the thrill of spending, or if getting a loan makes you feel like everything is guaranteed to work out no matter what, your relationship to debt may be a poor one.

Does debt affect your health?

If you can’t sleep, if you drink or use drugs to avoid thinking about debt, your spending could have serious, lasting effects on your health, and that’s nothing to gamble with.

Luckily, more and more awareness of this problem is starting to reach the public. Organizations like Debtor’s Anonymous (www.debtorsanonymous.org) are out there to help people dealing with spending addiction.

If you have been struggling with spending addiction problems for years, you may find yourself drowning in credit card debt. If this is the case, keep in mind that bankruptcy can help you take care of your debts for good. Second chances are rare in life, but bankruptcy can provide that for you. If you have a problem, it’s time to take decisive action, and to get your life back on track.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Published Friday, July 17, 2009 @ 6:12 am

A Chapter 13 bankruptcy plan is a powerful financial strategy that allows you to systematically repay creditors under a court-approved schedule. It gives the thousands who file bankruptcy under this chapter every year a sense of empowerment, enabling them to satisfy debts and remain financially viable.

Nevertheless, it’s very possible that even with your new start, you can falter along the way. It is not uncommon for an emergency, whether related to health, employment or family, to derail you from the monthly payment plan. If that happens, you do have plan modification options, which include deferring a payment, lowering your monthly payment, requesting a hardship discharge or converting to a Chapter 7 bankruptcy.

Please note that if you are facing a situation like this, contact your attorney as soon as possible. There is a list of legal parameters that coincide with altering your Chapter 13 plan. It’s important to discuss your situation and let your attorney determine the best strategy to deal with it.

First, understand that if you miss a payment to the trustee, the court can dismiss the case, allowing creditors to begin contacting you again. And, you may not be able to file again within 180 days. However, some courts may rule that the inability to make payments does not constitute an intentional attempt to avoid a court order. But it varies, which is why you’ll need the consistent oversight of a bankruptcy attorney.

You can ask the trustee for a suspension of payments. They are often amenable to this in the face of sudden unemployment or medical emergencies. The payments you miss during the suspension are not forgiven, they are simply added on later. However, since a Chapter 13 can’t last for more than 60 months, the suspension may cause you to have to modify the plan.

In a Chapter 13 modification, you will typically see a reduction in near-term payments but an increase as the plan continues. A judge is going to examine your case carefully and make a decision based on what he or she sees as a reasonable amount for the next term of payments. The court will take a renewed look at your income vs. expenses to determine if a modification is in your best interests. A modification also brings up the issue of value of non-exempt property, which was assigned when the first plan was approved. If the value increases, your new payments may very well have to reflect that.

A “hardship discharge” stops the Chapter 13 plan completely and eliminates the remainder of your scheduled payments. This sort of action will require some handiwork on the part of your attorney and you must prove in court that your inability to make payments is out of your control, a modification plan is not feasible and that you have made payments on nonexempt property based on their value on the date of the original petition. Generally speaking, you will need to prove some catastrophic circumstance, such as a massive personal injury, or some other uncontrollable event that has made it impossible for you to continue your Chapter 13 plan.

When a hardship discharge will not work, you can attempt a conversion to a Chapter 7 bankruptcy. One advantage to conversion is that debt incurred after you filed your Chapter 13 can be discharged, which is not possible in a hardship discharge. You need to be wary of how this may look to the court, however. If you attempted to file Chapter 7 first and failed the means test, a judge may see your attempt at conversion as a way to circumvent the law. As you can imagine, most judges will not be very sympathetic to this tactic.

If you’re having trouble with your Chapter 13 plan payment, it’s crucial that you discuss your situation with an attorney as soon as possible to avoid a dismissal. Don’t wait until it’s too late.

From the Law Offices of John T. Orcutt. Helping thousands of North Carolina families every year get back on their feet. Call 1-800-899-1414 to find out how bankruptcy can help you.

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Published Monday, July 13, 2009 @ 1:05 pm

Sometimes debt collection can have a humorous side. Usually, it shows itself when the collection is happening to someone else. Schadenfreude aside, here are some collection agent slip-ups that AOL gathered from a number of their users. See if you can’t relate to some of their situations.

• A family who runs a retail business was disputing an invoice that showed they owed double their original order for supplies. Turns out, a sales rep had inadvertently doubled their order. The timing was terrible, as the rep soon after left on maternity leave and the company stated only she could repair the mistake. Regardless, the company sent the bill to collections while the family had thought it was being held for later reconciliation. When a collections agent reached the family’s seven-year-old daughter, the agent told her, in no uncertain terms, …”Because of your daddy, you are not going to be able to live in your house anymore, or have Thanksgiving with your family.” Nice.
• Collections activity was started on a couple whose car payment was only 10 days past due. When the family couldn’t be reached, the agency repeatedly called their daughter in-law, leaving messages with her to call about the late car payment.
• This is a good one relative to credit reports: One AOL user had a credit score of 750. When his wife entered graduate school, their debt to credit ratio increased. Once they reached about 45% after her graduation (when you can begin reducing it), American Express dissolved their $25,000 credit line, which had a zero balance. Thus, their percentage of credit to debt jumped to 60%, thus lowering their credit score substantially. Other creditors soon fell in line and their score dropped yet again.
• Another AOL customer received a phone call about a credit card bill that was delinquent 15 years ago for $300. At that time, the credit card company charged it off, citing it would be a mark on her credit. She accepted that. Well more than a decade later, they’re back, asking for $600 or it will be back on her credit report.
• Beware of “official documents.” One user included a story about a collections company that sent paperwork meant to look as if it was coming from an official city court office. Upon smartly following-up, she learned the court knew nothing of the action against her and had no record of her for anything.
• Here’s one surely driven by the commission structure collection agencies offer their employees for what they collect over the phone: When a woman was late with a credit card payment by more than a month, she admitted her mistake to the phone representative, saying she would hang up and pay it online immediately. The rep responded harshly, saying it could only be paid over the phone. Politely disagreeing, woman proceeded with paying online. This did not sit well with the phone rep, who promptly assigned the woman’s phone number to the collector’s auto-dial system which called every 15 minutes for the next two days.
• This sounds like a Hitchcock tale. When a woman’s ex-husband’s insurance company was slow to pay some medical claims, a collections agency began harassing her because they could not find her husband. Despite not seeing him in eight years, they began to wait outside her house to serve him with papers. One day, while roofing her house, she spotted someone behind a hedgerow with binoculars. The police had no problem putting a stop to the situation.

Do you have any stories like this? Speak with a bankruptcy attorney today. Bankruptcy can stop the collection calls and you may be entitled to damages for harassing creditor conduct.

In North Carolina, call the Law Offices of John T. Orcutt to set up your free initial debt consultation and find out for yourself how to stop the creditors for good. 1-800-899-1414.

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

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

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

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

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

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

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Published Wednesday, July 8, 2009 @ 2:14 pm

Even though it completely runs in opposition to the intended goal, many states allow creditors to seize your wages should you not be able to pay a debt. The contradiction is easy to see: how can you pay your debts if your income is diminished?

Evidence is now on the table that bankruptcies are filed at a much higher rate in every state that empowers creditors to reach into your paycheck directly to get their money. The impact stems from the fact that if a creditor seizes funds directly under such a state law, they limit a person’s ability to pay other creditors as well. So while one company may get paid back, all the others to which money is owed have substantially less chance of being paid. Simply put, garnishing wages only serves to severely weaken an individual’s economic wherewithal.

The news of the connection between wage garnishment and bankruptcy stems from a three-year study by the Associated Press, which tracked millions of bankruptcy records across all states by using an “Economic Stress Map.”

Thankfully, North Carolina prohibits the practice (except in extreme cases of child support neglect and tax delinquency) and as result, the Tar Heel state has only a third of the bankruptcy filings as Tennessee. South Carolina, Pennsylvania, Florida and Texas are other states that do not allow or limit a creditor’s rights to take money directly from your paycheck. However, in North Carolina, your wages may be garnished for such debts as student loans, child support, or back taxes. If your wages are being garnished for any reason, it’s important to realize that bankruptcy can put an immediate stop to the garnishment, and put you back on the track to financial freedom.

Although most courts limit the amount of money that can be seized, for just about everyone facing financial problems of that magnitude, the slightest reduction in monthly income can create serious turmoil. More over, it can quickly lead to increased stress in an individual relative to their money woes, leaving them to feel powerless and invaded.

Making matters worse are reports that the level of aggression relative to wage garnishment is on the rise in the states that allow it. Basically, creditors are seeing more competition for money that’s owed and as a result, want to be first in line. The approval to garnish wages is often the winning strategy.

A woman in Alabama had been in a relatively sound financial position until debts incurred from assisting a former roommate came back to haunt her. Able to afford her mortgage and recently paying off thousands in credit card debt, she was suddenly over-burdened as a result of her roommates inability to pay. Once the wage garnishments started, she couldn’t adequately handle any of her debt and filed bankruptcy to protect herself.

Thankfully, North Carolina is one of the five states where judges rarely allow wage garnishment. However, this won’t stop a creditor from suing you and attempting to collect in other ways, such as attempting to levy a bank account, or worse, attempting to sell your house through a sheriff’s execution sale. If you are facing overly aggressive bill collectors, contact a bankruptcy attorney today. Bankruptcy will stop the bill collector calls, stop a lawsuit, and put you back on your feet in these tough economic times. Call a bankruptcy attorney today.

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

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Published Wednesday, July 1, 2009 @ 8:05 am

Credit card balances, medical bills, mortgages and student loans make up a lot of America’s debt. In this recession-plagued economy, relief from any one of those financial obligations can be a tremendous benefit.

The White House has championed a bill to curb credit card company billing tactics and its mortgage modification program is expanding despite some early setbacks. And, the health care debate is reaching crescendo with the hope for many that an affordable, if not fully-supported, government medical plan will soon take shape.

Student loans, however, have not been subject to the broader economic sweep-up strategy that Washington has employed to fix the economy. That is, until now.

As of July 1, those holding federal student loans may be eligible for a program orchestrated by the Department of Education (DOE) that will cap monthly student loan payments based on the debtor’s income. A more aggressive component of the program calls for the dismissal of all student loan money that has been outstanding for more than 25 years.

The Department of Education is employing a job incentive, as well. In some cases, it will completely waive a person’s debt, after 10 years, in exchange for work in the public sector. Many of the most standard student loan arrangements call for a 10-year payoff. However, since so many young professionals struggle to find work after college, or at least work that will also cover student loan payments, the vast majority of student loans extend well beyond that ten year window.

A person’s ability to qualify for the effort, loosely called “income-based repayment” or IBR, will be determined by income and loan size. A calculator has been set up at its Web site, www.ibrinfo.org.

Ultimately, the IBR plan is part of the DOE’s College Cost Reduction and Access Act that was signed in 2007. Given current national economic conditions, the timing was right for its larger unveiling. It is meant to cover Federal Family Education Loans and any direct loan from the Stafford and graduate PLUS programs. And, any type of federal loan issued by a private lender is also subject to the reduction plan.

For most people who take advantage of an IBR plan, they should expect to see student loan payments be reduced to at least 10 percent of their income. However, anyone making more than $16,000 annually may see the loans reach 15% of their income. Anyone making less than $16,000 will not have to make monthly payments. The government is assuming that at least 1 million people will enroll.

Keep in mind that even though any reduction in monthly expenditures initially sounds great, there are drawbacks. Extending the period of the loan, which this program does, accrues more interest and could ultimately increase its overall cost. And if you realize a salary increase after being below the $16,000 benchmark, you’ll be responsible for the payments. It’s important for anyone considering enrollment to understand how a sudden new monthly payment impacts the capacity to cover other bills.

If your college loans are a large part of your monthly debt-load, than this program may provide you a little breathing room. Combined with a well planned bankruptcy to discharge your other unsecured debt, you’ll be well on your way to building your financial future. Struggling with student loans and other debt? Call the Law Offices of John T. Orcutt to set up a free initial consultation. Call 1-800-899-1414 today.

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Published Sunday, June 28, 2009 @ 8:45 pm

Planning for your retirement early is extremely important, yet appreciating this point can be difficult for people who aren’t looking to retire soon. It’s even harder to remember the importance of planning for retirement when it remains years or even decades off…all while the harsh realities of the economy are here today. Credit card companies compound the problem, advertising instant gratification while minimizing focus on long term financial stability. As the credit markets tighten, it’s tough to resist cutting back on retirement contributions. For those with a significant nest egg, it’s very tempting to cash out now and rebuild later.

Unfortunately, many of us approach bankruptcy as a last resort, an option to be avoided at all costs in the interest of our future financial soundness. In order to avoid bankruptcy, we make serious mistakes that betray the security of our financial futures. Those kinds of mistakes are precisely what this blog is intended to highlight and discourage. Before you make a mistake you may regret years if not decades from now, just to avoid declaring bankruptcy, make sure you have the facts straight. One classic mistake people make in a misguided effort to avoid declaring bankruptcy is dipping into― yep, you guessed where this is going― their retirement funds.

But it’s your money, so why is spending it such a bad idea, especially if it may save you a lot of trouble or help you avoid bankruptcy? An important clue can be found in the status of retirement funds in bankruptcy law. Did you know that in most states, your creditors cannot touch your retirement unless your actions enable them to do so? 401lks, IRAs, 529 plans- all protected by state and federal exemptions Even your rollovers are protected. Generally, a creditor will only be able to call in money from your retirement funds if you withdraw the money or take out a loan and fail to repay. For this reason, it is very important to avoid taking withdrawing any money from your retirement. Bankruptcy protection can’t protect you unless you allow it to!

What if you have high credit card debt, and you are thinking about borrowing against your retirement in order to chip away at those payments? This is exactly the kind of move you want to avoid and exactly the kind of situation where you need to think of bankruptcy as the next step, and not a last resort. Bankruptcy protection can allow you to discharge unsecured debts like credit card debt while keeping your retirement funds safe for the time they’re meant to be used: retirement. You may also be creating a whole new host of problems for yourself by borrowing against your 401k, even if you are able to address some issues in the short term.

What if you borrow against your retirement but then can’t repay it on time? You will likely face some serious tax consequences; remember, recent tax liabilities are one area where bankruptcy protection won’t be able to help you. Or what if you borrow against your retirement funds, but then you lose your job? You may be responsible for repaying the loan almost immediately, and this will naturally be difficult if you are out of work. As these scenarios illustrate, dipping into the well of retirement funds can be more trouble than it’s worth. Bottom line, if you’re thinking about withdrawing from your retirement to deal with your debt, it’s time to call a bankruptcy attorney. Protect your financial future, file bankruptcy now!

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.

Raleigh bankruptcy. Wilson bankruptcy. Apex bankruptcy. Durham bankruptcy. Fayetteville bankruptcy. Sanford bankruptcy.

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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 Tuesday, June 9, 2009 @ 11:10 am

As you are probably well aware, bankruptcy is an important decision that should not be taken lightly. If you are eligible to file but hesitate to do so, you stand to lose more than you may guess. Dithering too long can ruin the strategic advantage of timing; deciding not to file at all could cause you to lose everything.

Take for example your car: if your car is securing a debt and you decide not to file for bankruptcy, a creditor may proceed with repossessing your vehicle. You may think you’re ready to lose your car should it come down to repossession, but consider this: the proceeds from the sale of the car undoubtedly will not cover the entire secured debt. This means you’ve lost your car―and you still owe the difference between the auction sale price and outstanding loan! Bankruptcy allows you to control the situation, by allowing you to safely surrender the vehicle without risking a costly deficiency claim after the car is sold. If you want to keep the car, Chapter 13 allows you to catch up with missed payments, putting you in a better position to keep the car while eliminating the risk of a deficiency claim if you decide later that you can’t afford the payments.

If you stand to lose your home, the steps a mortgage company can take won’t be as dramatic as waking up one day and finding your car gone. Sure, a foreclosure takes more time, usually at least three months. Still, the possibility of keeping your home is one of the excellent benefits of filing for bankruptcy protection. A solid Chapter 13 plan can catch up your missed payments and stop a foreclosing lender in its tracks.

The sitting duck strategy is pretty terrible for most every kind of debt. There are some debts that a bankruptcy won’t discharge, so you may think that declaring bankruptcy won’t help you anyway, so why bother. But letting a bad situation spin out of control while you take no action is a recipe for disaster. Take student loans for example, Congress has abolished the statute of limitation for student loans, so you can’t just wait those out. If you are delinquent long enough on your student loans, the government could garnish your wages without even going to court. By eliminating other dischargeable debt in your bankruptcy, you can be back on track to start repaying your non-dischargeable student loans.

If you owe money for support obligations, your state may have a program to revoke professional licenses, or worse, a divorce court could even send you to jail. You’ll also end up in the slammer if you were ordered to pay money as a result of a criminal proceedings. So now you may be thinking, these all sound pretty scary, but a bankruptcy won’t discharge them, so what’s the point? Remember that declaring bankruptcy can help you discharge some kinds of debts, freeing money up to pay those not eligible for discharge. This is a heck of a lot better than waiting around for the worst to arrive. If you are in trouble, don’t wait: call a bankruptcy attorney and get to work.

With offices in Raleigh, Durham, Wilson and Fayetteville, the Law Offices of John T. Orcutt can help you get a handle on your debt. Call today to set up your free initial consultation: 1-800-899-1414.

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Published Thursday, June 4, 2009 @ 11:33 am

A psychology professors at Maastricht University in the Netherlands published a study about what it takes to find true happiness. Or at least, the psychological make-up of happiness. As it turns out, yes, money does have something to do with our level of happiness. But so does uncertainty.

In a recent New York Times column on the professors’ work by Daniel Gilbert, author of “Stumbling on Happiness,” it was published that indeed, money can buy happiness. Although, not to the extent most people believe. It doesn’t take private jets and multiple homes on palm-lined beaches for us to be content. It does take shelter and food, though, along with a sense of security. Not physical security really, but mental security, a sense of comfort.

In their studies on happiness, the psychologists found that people were less anxious about a bad thing happening to them (in this case, a healthy jolt of electricity) if they knew it was going to happen. The study involved telling some people that in a series of 20 shocks, three of them would be quite strong and would come at random times. The other group was told exactly when the stronger shocks would occur. It was the latter group that, according to heart rate and other physical monitoring, was less nervous about being electrocuted.

Let’s apply this university study to your financial situation. When you are in debt, serious debt, the fear of the next emergency that will require money you don’t have, the fear of the phone ringing with a collection agent on the other end or the fear of not knowing if you’ll be able to pay your mortgage, becomes a major contributor to your unhappiness. After a while, that fear of not knowing what lies ahead turns a financial situation into an emotional one. And when we’re distraught, our spending decisions can get even worse.

When you make the decision to file bankruptcy, you become the second group in the study. You know what lies ahead of you now. Sure, parts of the process may be uncomfortable at times, but for probably the first time in a long time, you can see through all the financial uncertainty. You can pick up the phone with hope that it’s going to be a friend or family member. You will be able to ask questions to your bankruptcy attorney about your home and investments. Bankruptcy can provide you clarity when the clouds of debt have blocked your future.

Even though the study showed that yes, material things can create happiness, it also showed that we need a great deal more, too. When it comes to knowing something bad is going to occur, the study showed that we absorb the event and then move on. We are less apt to point fingers or hold on to bitterness or claim the victim. The same can be said for bankruptcy. Once you make the decision, you’ll feel that weight lift. It will be tremendous.

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Published Sunday, May 31, 2009 @ 9:03 pm

“Identity theft won’t happen to me, I don’t buy anything off of the Internet.”

Sounds familiar, right?

Well, last year, there were millions of Americans who said that and turned out to be dead wrong.

Identity thieves do not need to access your computer hard drive to run up debt in your name. Many of them just need an unattended garbage can, an over-trusting relative on your end of the phone or just the United State Postal Service. Whether it happens electronically, through the mail or in the county dump, identity theft is all about getting access to your money. And when your money is in the hands of someone else, so is your credit.

Thousands and thousands of identity theft victims have found themselves facing the decision to declare bankruptcy as a way to start fresh after identity theft has cost them too much to handle. In fact, many victims of identity theft discover that the perpetrators have filed bankruptcy for them when the official notices show up in the mail, which further hampers the victim’s ability to pursue the case and creates greater legal distance between themselves and the crime.

Identity thieves are filing bankruptcy in their victims’ names at an alarming rate. Apparently, the lure of the “automatic stay” is what prompts them to take their crime to the next level. The automatic stay is an injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against a debtor the moment a bankruptcy petition is filed. When the individual filing bankruptcy, in this case, the victim of fraud, fails to appear for the bankruptcy hearing, the case is then dismissed. However, the bankruptcy filing remains on the victim’s credit report.

Those to whom this has happened will only find out about the bankruptcy when they, under innocent pretenses, apply for a loan or other form of credit. This not only significantly harms the credit and financial wherewithal of the victim but severely damages the positive intentions of a legitimate bankruptcy process, associating it with crime and wrongdoing.

A large number of bankruptcy cases are associated with identity theft. Some examples include:

• Filing for bankruptcy under the name or identification (SSN#) of another person. This often entails ex-spouses, estranged family members or former business partners.
• Getting into debt under a false name, filing for bankruptcy and then discharging the debt.
• Transferring the deed, or ownership, of property to another and then filing for bankruptcy with that person’s name to avoid foreclosure. In today’s discouraging housing market, this is becoming more common.
• Putting property under the name of a random person who is in the middle of a pending bankruptcy case, which will stop the foreclosure on the criminal’s property once the victim is recognized as an owner.
• Using a created or existing social security number to petition for bankruptcy.

This type of identity theft, like all forms, can be severely damaging to a person’s credit and in many cases, can lead to the victim having to file a legitimate bankruptcy. In today’s information age, and even more so in an economy that can perpetuate desperation, it is more critical than ever that we all monitor our credit and finances as closely as possible.

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Published Thursday, May 28, 2009 @ 12:31 pm

As if we didn’t have enough things to worry about, it seems like every day another TV commercial, pop-up ad or credit card offer is telling you to worry about your credit score and pay someone to look at it.  Unfortunately, these messages, while pesky, are partly right; credit scores are now an important tool in the arsenal of an informed consumer.  Based on the way these offers are phrased, anyone might think that simply looking at your credit score is going to somehow fix it. Your credit score is information–important information, it’s true. But once you have it, what will you do with it?

If you’re considering bankruptcy, chances are your credit score is hurting. You’ve probably heard that your credit score will be negatively affected by declaring bankruptcy, and this may be holding you back from taking an important step to solving your debt problem. In the long term, bankruptcy will actually help your credit score–but before you can understand why, there are some facts you should know about credit scores.

A credit score is essentially a report card on your debt history. Much like a report card, it will not encapsulate you, but companies will use it as short-hand to evaluate your “creditworthiness”– how risky it will be to lend to you. Credit bureaus (companies that collect information about consumers) calculate your score based on information from your debt history. The exact formula they use is a trade secret, but the factors in rough order of importance are:

• Your payment history: missed payments is the top factor 
• Your outstanding debts: the ratio of your debt to your credit card maximums as well as the total amount you owe
• How long you’ve had credit: the longer, the better
• New credit: can hurt you
• Types of credit you already have: certain kinds of credit are more favored than others

Thus, if you are falling behind on payments, you are doing serious damage to your credit score, and companies will be less willing to lend to you, or impose more stringent rules on the debt (for example, higher interest rates).  If you have too many credit accounts, or owe too much on each account relative to the limit, this will also weigh heavily against your score. When you apply for new credit, you generally will authorize the creditor to access your report; if you have too many inquiries, this can also reflect badly on your score.

Americans are entitled to one free credit report every 12 months, but that is different from a credit score–usually the companies that provide the free credit report will offer to sell you the score for a fee. Watch out for this hook; looking at a credit report is important because it may reveal that the companies have incorrect information about you, but you many not gain much more from looking at your credit score. The report is free once a year, but the score will cost you. You’re also entitled to a free report (but not a score) within 60 days of being denied credit or favorable credit terms.

The good news is that a credit score is not set in stone–in fact, it changes all the time. The bad news is that if you’re missing payments or opening new credit to pay for old credit, a good score can quickly become a bad score. The lower your score dips, the higher your interest rates will climb–even on accounts you already have! Thus, the more your debt problems increase the more money you’re paying out in interest, which long term is a terrible bet. Because scores change, bankruptcy can help your credit score in the long term by allowing you to cut off the debt default cycle.

If your debt is unmanageable now, your score is already beyond your ability to repair. Bankruptcy will help by wiping the slate clean and allowing you to rebuild your credit from the ground up. It will take time and effort on your part, but properly rebuilding your credit after a bankruptcy can be the key to future financial success. Contact a local bankruptcy attorney today and find out the truth about bankruptcy and your credit score. Serving North Carolina residents, the Law Offices of John T. Orcutt have convenient offices in Raleigh, Durham, Fayetteville and Wilson.

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Published Thursday, May 21, 2009 @ 8:00 am

The much talked about credit card reform bill passed the Senate on May 19 and with it comes at least a semblance of resolution to what has impacted so many American’s financial wherewithal over the last several years. In a previous post on this topic, we mentioned that credit card companies currently perform, and will now ramp up, extensive consumer psychology research to find out what drives our spending habits. More specifically, they’ll be using the information to find out just what kind of credit risk we pose to them when it comes to dishing out more credit and how apt we are to pay it back.

The whole process started not long ago, sometime in the mid 1980s, when some lending industry backed number crunchers figured out that the real profit can be made off of the folks who didn’t pay their whole balance each month. Before that, credit cards were somewhat mundane and simply not a major profit center for the banks.

As credit cards grew during the early 1990s, the influence of Madison Avenue advertising creatives entered the picture, more than doubling the industry’s income from fees alone. Credit card companies were mailing billions (yes, with a “b”) of offers to cul-de-sacs across the country.

Despite the power of a Super Bowl commercial, true credit card user psychology has been traced to an executive of a Canadian department store, who spent years analyzing the products bought and locations where his store issued credit card was used. For example, he determined that people who bought birdseed and products to protect hardwood floor finishes from furniture were more apt to pay a credit card on time because those items proved they care for things not belonging to them (birds) and want to preserve their own investments (floors/condition of their home).

On the flip side, he proved that customers who used the store’s card to by a booming car exhaust system were subject to miss credit card payments. He even connected spenders to what restaurants and drinking establishments they frequented. Those that spent at the “roughest” bars were in the same category as those who purchased obnoxious mufflers.

As a result of this gentleman’s research, former credit card executives in America became consultants to banks and other lenders, pitching the Canadian’s research as solid gold profit. And they were right.

Fast forward to today, when a shattered economy and record credit card debt has data-mining shrinks telling lenders how best to extend credit. If they notice late-night log-ins, then that person is losing sleep from stress and may be on the verge of a financial crash. What about spending in the middle of the day? Clearly that person is not working and has no way to pay for what they’re buying. That means an interest rate should go up to get as much as possible before they can’t pay anymore.

Collection companies employ the same tactics and offer training in negotiations and conversational sales so they can better relate to whatever situation was the cause of your debt. Divorce? How are the kids? Medical bills? They wish you the best. But all the well-wishes and empathy is nothing more than a commission tactic, because definitive research has proven that cardholders will pay first the companies who seem to care.

While we all want to have the pride that comes with taking care of our own problems, it’s important to understand that you don’t always create your financial problems. But don’t worry, the credit card companies understand what happened. Now how much do you think you can pay this month?

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

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

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

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

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

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

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

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

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Published Tuesday, May 19, 2009 @ 10:46 am

Recent credit card legislation may prove to be a big relief for many Americans who have trouble keeping up with the rapid interest rate changes, hidden fees and aggressive collection efforts. Or not.

Many industry watchdogs believe the bill, currently alive in both a Senate and House edition, will not meet its original expectations. Citizens who have been watching the bill’s progress with hopes of instant relief may want to start paying even closer attention. It should be noted that true debt relief will rarely come as the result of government action alone and that in the end, the best solution for a reprieve from the pressures of mounting debt is to seek legal advice from a reputable bankruptcy attorney.

One of the facets of the bill that will benefit burdened card holders is the reinstatement of grace periods. As you may know, credit card companies have become overly serious about their due dates. Granted, a deadline is a deadline, however, many companies apply late fees even if your bill arrives on time but spends a few days being processed through their bureaucracy.

This tactic alone creates a chain reaction of profit for the creditor. In order to avoid a steep penalty, you may be forced to send in any amount, maybe even less than the minimum payment. Thus, your debt perpetuates, as very little of that small payment goes to the principle. However, if you had another couple of days you can afford to send in more and actually make a dent in the amount owed. Credit card companies understand this psychology and are very skilled at leveraging it.

Both versions of the bill have grace period language that ranges from 30 to 60 days.

Card holders can also expect some help from time periods applied to interest rate increases. If you miss a payment and your rate jumps, the reform bill says that the rate must remain intact for only a few months. If you pay on time for six months (as the current version of both versions state), then your rate must return to the original, lower percentage. And, if you are able to pay more than the minimum amount owed, the credit card company must apply the overage to whatever charges are subject to the higher interest rate, such as cash advances. Previously, they would apply overages as they saw fit.

The problems with the legislation start with its timing. To no surprise, credit card companies are mounting the argument that they will not be able to implement changes until well into 2010. Actually, the government is not helping matters much, as they also agree that most changes won’t take effect until 2010.

Additionally, and almost sickeningly, credit card companies are currently increasing fees across the board to get as much money as possible before the government action comes bearing down on them. And the reform bill is powerless to prevent it. Card lenders are also hurrying to get underway with standard-setting consumer research studies to learn as much as possible about everyone who holds and applies for a credit card. That data will surely be used to create new, even more cleverly-positioned marketing pitches down the road that will surely find a way to circumvent the results of the reform actions.

Lastly, they will simply start to deny people credit and raise rates on those that do qualify, which will do nothing but delay the recovery in consumer spending. Anything to make a buck.

But hey, membership has its privileges, right?

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Published Monday, May 11, 2009 @ 9:48 am

If you’re getting regular calls from collection agencies, chances are, you’re already in over your head with unmanageable debts, your credit rating has already been marred, and things will just continue to get worse unless you find a way to cut yourself loose. Bankruptcy is the best solution. The moment you file your bankruptcy petition, the calls will stop. The only kind of creditors who use bill collectors are unsecured creditors, like credit card companies, and those creditors are forbidden by law from continuing their collection activities while your bankruptcy case is pending. Even more importantly, by filing bankruptcy, you’ll be on your way back to financial freedom, because when the case is done most – and possibly all – of your bad debts will be gone, forever.

Maybe you’re still on the fence about bankruptcy. Or, maybe you’ve made your decision, but the petition has not yet been filed, and you are still receiving threatening calls from the collectors. In either case, it’s important to know your rights under federal law so that you can reduce some of the hassle of dealing with bill collectors.

The federal Fair Debt Collection Practices Act (FDCPA) prohibits bill collectors from using abusive and harassing collection practices. Under the FDCPA, bill collectors can’t: (1) call you before 8:00 a.m. or after 9:00 p.m., or at any unreasonable time or place, without your permission; (2) use a false name in communicating with you; (3) make your debt public (though they can contact your spouse, guardian, or attorney about your debt, or other people to get your contact information); (4) threaten to take any action against you that they have no legal right to take and no true intention of taking; or (5) use any other harassing, abusive, oppressive, or deceptive tactics.

The FDCPA also provides that a bill collector must stop communications with you upon your written request. Just send a letter simply stating that, under the FDCPA, 15 USC § 1692c(c), you request the collector cease communications with you regarding the account at issue. It’s best to send the letter certified mail, and to send copies to the original creditor and the Federal Trade Commission. Once the bill collector receives this notice, it can only contact you to advise that collection efforts have ceased or that the collector or the original creditor willing be taking a specific action against you, such as filing a lawsuit.

If a bill collector violates any of these rules, you have the right to sue and collect damages. It is important to note that the FDCPA only applies to third party collection agencies; it does not apply to original creditors. However, most states have companion laws that extend to original creditors, prohibiting them from engaging in the same sorts of collection activities. For example, the North Carolina Debt Collection Act applies to all collectors, including the original creditor. You can find out more about the laws in your state by contacting your state attorney general’s office or consumer protection agency.

While the FDCPA and similar state laws are certainly important in curbing abusive collection tactics, if you’re a regular target of bill collectors, these laws will only treat the symptoms of a much larger problem: unmanageable debts. The problem won’t go away, but will continue to spiral out of control until you take action to cut yourself loose from the bad debts — once and for all. Bankruptcy is the answer. It will treat the problem and give you the fresh start you need to take back control over your life. Contact the Law Offices of John T. Orcutt today, with offices in Raleigh, Durham, Wilson and Fayetteville.

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Published Wednesday, April 22, 2009 @ 1:48 pm

One of the worst aspects of having debt troubles are the calls from bill collectors. Who doesn’t dread those mean phone calls after you miss a couple of payments?

Recognizing the damage that bill collectors can inflict on people in debt and their families precisely when they are most vulnerable,  Congress passed the Fair Debt Collection Practices Act (FDCPA) in 1977. Many consumers are unaware of their rights under this act and bill collectors count on this fact to maximize their intimidation tactics.  Bill collectors will make you feel like a criminal when in fact, because of their dirty tricks and bully tactics, they are the ones breaking the law.

First, you should know the difference between creditors and bill collectors. Creditors are the people you owe money to, while bill collectors are people your creditors hire to bully you into paying. Your creditors can continue to call you, but under FDCPA , a third party hired by a creditor to collect debt must comply with the federal law. This includes attorneys hired by a creditor to collect the debt; if a debt attorney contacts you and tries to intimidate you, make sure to tell him that you understand your rights under FDCPA. Hopefully he’ll know that if he messes up, you may have grounds to sue him!

What Bill Collectors Can Do:

Bill collectors CAN report negative information to the credit bureau, close your account, or sue you to get a judgment. Once a judgment is obtained, the collector can then force a sheriff’s sale of any non-exempt property you own, such as your car or home.

Bill collectors may contact your spouse or your guardians; they may call your parents only if you are a minor; they may also contact your lawyer, as well as any other creditors you owe.

What Bill Collectors Cannot Do:

Bill collectors CANNOT call your employer, your neighbors, or any other third party, publish your name or information about your debt in anyway, or threaten legal action that they can’t or don’t intend to follow through. They cannot contact you in any place where such contact may cause you trouble or embarrassment: for example, at work. They can’t call you at unreasonable hours. In fact, bill collectors can’t call you at all once you write them a cease-and -desist letter. Bill collectors cannot threaten to seize your assets or to have you arrested. They cannot ask for more money than you actually owe, except under very narrow circumstances and with legal authorization. They must respond to a request for confirmation of the debt in writing. They cannot threaten your safety, threaten you with any of the forbidden conduct, or use abusive or profane language.

In addition to FDCPA, your state probably has a law addressing abusive bill collectors. These laws may offer you further protections, so you should make a point to look them up before dealing with any bill collectors.

Always tell bill collectors that you understand your rights under FDCPA and that you will report any misconduct to the Federal Trade Commission.  If there is misconduct, don’t hesitate to file a complaint in writing to the FTC. Check out the FTC website for instructions on filing a complaint.

If bill collectors are wreaking havoc on your peace of mind, it may be time to consider a lasting solution like bankruptcy. Bankruptcy will stop the phone calls, stop the lawsuits, and give you some much needed breathing room during these tough economic times. Get a handle on the bill collectors and call a Bankruptcy attorney today!

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Published Monday, April 13, 2009 @ 12:28 pm

Life happens. If you’re like many of us, you’re going to encounter your share of financial ups and downs. You’re treading water, financially, making enough to get by but not enough to get ahead. And then, wham, something extraordinary happens to upset the financial balance in your life, and you find yourself rapidly piling up debt.

Maybe you had a run of bad luck at your job, didn’t get the bonus you were expecting, or maybe you didn’t get the tax refund you were counting on to ‘catch-up’. You end up using high interest credit or paycheck advance services to cover your current bills, hoping something will come along to make it up on the other end.

However, in today’s economy, many people like you don’t have something coming in at the other end. In fact, many folks find out that the money shuffle simply leaves them further and further behind, piling up debt on credit cards and at high-interest payday loan stores, in a cycle that seems impossible to break. You can feel your financial health slipping away, and there doesn’t seem to be anything you can do stop the skid.

You’re like most people when it comes to the term ‘bankruptcy’. It seems final, like a defeat, a loss, tossing in the towel. Many people would only consider going bankrupt as a last resort, after there’s nothing left. However, you may be surprised to learn how much a properly executed bankruptcy can give you in terms of a new start in your personal financial life. It’s a great chance to break the debt cycle and start clean, for you and your family.

With the advice of a good bankruptcy attorney, you’ll find that you can negotiate these troubled waters successfully and wipe your debt slate clean, leaving you ready to resume your life, provide for your family and prepare to start your next financial venture on a solid foundation.

Take a look at these simple examples and see if they happen in your life day to day. If they do, a professional bankruptcy attorney may be able to help you get that clean break you deserve, backed by the strength of our federal bankruptcy laws.

Do you:

• Live paycheck to paycheck?
• Have multiple credit cards?
• Move money around from account to account to cover debt?
• Pay only your minimum amount due?
• Pay debt out of savings since your earnings are exhausted?

If you can say yes to the statements above, or similar conditions, you may be a candidate for bankruptcy.

Bankruptcy remains a viable option. Discussing your situation with a qualified bankruptcy attorney will help you make that decision wisely and in a timely manner. Remember, you aren’t alone and bankruptcy law is there to help people in your situation get that fresh start that we all deserve.

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Published Monday, April 13, 2009 @ 7:02 am

We have all seen the loan offers in the mail, the banner ads online and even the commercials that air on late-night television. Even though we all scoff initially, knowing what’s in store if we call, your outlook changes quickly when the realization hits that you too are saddled with mounting debt.

But easy-to-get loans with high interest rates and hidden fees are not the solution to your debt problems. All too often, the opportunity to get that money so quickly, certain you will not be the one who gets snagged by the fine print, is sometimes too appealing an opportunity to pass up.

Predatory lending has become one of the most common contributors to America’s debt problems. By targeting individuals, like yourself, who are already beginning to feel that stomach pit grow in unison with the number of bills that land on the kitchen table every week, fast money lenders have been able to expand their presence substantially, popping up on corners across the country like common neighborhood diners.

But it’s not just the street corner franchises that are taking advantage of those seeking financial relief, it’s also our banks. Our trusted, professional financial institutions that help us with mortgages, checking accounts,CDs and small business loans. There was a time when a man in a suit with an outstretched hand and warm smile was a symbol of trust and goodwill. And while many, many banks remain filled with welcoming, customer-oriented financial experts, a stigma of mistrust has filtered into the banking industry. Unfortunately, some of it is well-deserved.

It is critical then, especially for those seeking relief from their financial challenges, that you avoid the hard money lenders at all costs. Watch for signs of predatory lending like unreasonable fees that can be worked into the monthly payment. Since they are broken up into small pieces and only add a few dollars per month on to your payment, they seem reasonable. Be careful though, because over the life of the loan, these fees can end up totaling more than 10% of the loan cost.

Prepayment penalties (yes, a penalty for paying early) can be substantial in a predatory lending situation. With a high-interest loan, you are always best served to pay as much as you can as often as you can. However, less than professional lenders will charge you a fee for doing so–yet another example of why getting a loan to pay off other loans is a bad idea.

If you see signs of or are given sales pitches for added products, like insurance plans, you can be fairly confident it is not a good alternative. The costs for these products will be gladly added on to your loan payment each month, further hampering your ability to pay it back.

Be extremely cautious of any loan that offers “mandatory arbitration.” This means that you are not allowed to seek court assistance to pay back the loan if your financial situation worsens. This can be a very complicated matter and will simply augment your stress and frustration.

The truth is, getting more debt to pay off debt is not the answer for anyone with serious financial concerns. The most beneficial remedy for relieving serious and chronic financial pain is to file bankruptcy. If you are at the point where payday lenders, car title loans and street corner financiers seem like your best solution, then it’s time to start fresh. Don’t repeat the cycle; seek real help, not more debt.

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