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 @ 2:04 pm

Political satirist P.J. O’Rourke once said, “Politicians are interested in people. Not that this is always a virtue. Fleas are interested in dogs.”

This quote could be said to ring true today as ever, since not yet a week after the Obama Administration pushed for more economic stimulus spending meant to benefit “the people,” Congress refuses to act, distracted by election-year anxiety about the deficit.

According to this weekend’s The Washington Post, “Congress has delivered only about a quarter of the $266 billion in “temporary recovery measures” the president sought in his February budget request and ignored much of the rest. There is unlikely to be another ‘recovery’ check for Social Security recipients. Come December, Obama’s “Making Work Pay” tax credit — the signature initiative he regularly touts as a tax cut for 95 percent of Americans — will probably be gone.”

Now, economists are warning that Congress’ election year deficit fears could plunge the nation into a second Recession.

Yes. That’s right. Another one of those. Specifically, while Congress is focused on as exploding federal budget deficit, it is thought that if Capital Hill doesn’t act—instead spending more on the economy—America may face another lengthy period of astronomical unemployment and, what’s worse, subsequent recessionary status.

One continuing strike against a vote in favor of stimulus spending in this election year is the fact that Americans appear on-board with some forms of fiscal conservatism. In fact, polls reveal most folks don’t believe the President’s first go at a stimulus package worked and continue to vacillate on whether job spending or paying down deficits is the greater priority.

Despite this, The Washington Post reports, “Administration officials are forging ahead, theorizing that voters would be even angrier if Washington skipped the additional spending and unemployment began to climb again. The White House is also trying to do a better job of selling the original $862 billion stimulus package, enacted last year, which has gotten high marks from many economists. ‘This is an environment in which there’s a great deal of jaundice about government and government spending,” White House senior adviser David Axelrod. ‘But it’s foolhardy to suggest that we should walk away from the things we need to do to continue recovery efforts as a way to deal with our fiscal problem.’”

Regardless of how you feel about the current politics of federal spending, Axelrod’s words ring true when considering ways to perpetuate your own personal financial bailout. In times of staggering unemployment, rising medical costs, and a crippled housing market full of underwater mortgages, it is more important that ever to do the things you need to do to continue your own economic recovery efforts and deal with your personal fiscal problems.

One way millions of Americans are moving forward with their own efforts to stimulate savings, security and a better financial future is through bankruptcy. No longer the forbidden fruit of the financial recovery world, bankruptcy has helped many an American avoid creditor hassles, foreclosures, eviction, loss of a vehicle or tools of a trade, and even divorce—all beginning with the acknowledgement that you need a long-term solution to your lingering financial woes.

So, are you one of the many beleaguered individuals attempting to take things into your own hands to address financial woes and take back their fiscal freedoms? Consider making a fresh start through bankruptcy. Knowing a qualified bankruptcy attorney can help any Recession-weary debtor to conquer their creditors and face their financial fears, yielding the right kinds of support, information and insights—at a low cost— to start anyone on their way to a more 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, August 12, 2010 @ 10:12 am

In this tough economy, it may seem like your creditors are an ever-present part of your life…showing up where and when you least expect, or need, them.  You’re not alone.  It turns out that millions of Americans have fallen behind on paying their bills, and an unfortunate result is that debt collection law firms are now heading to court in record numbers in order to collect.

In addition to this tough economy making past-due debtors out of many Americans, the rise in unprecedented debt collection cases is also being blamed on the wonder of automated debt collection.

According to a new The New York Times article by Andrew Martin, many debt collection law firms are now relying on “computer software to help prepare its cases. While many of the cases represent legitimate claims, critics say the lawsuits are too often based on inaccurate or incomplete information about the debtor or the amount owed.”

In response, state legislators and judges have attempted to rein in collection lawsuits, and on Monday, the Federal Trade Commission issued a formal report on the need for reform in debt collection litigation and arbitration, finding the current system for resolving disputes over consumer debts to be broken and in need of “significant reforms.” With debt collection topping its list of consumer complaints, the commission is proposing that states mandate collection services to provide more transparency in the debts owed, including the current debt balance, interest and fees; and discourage defaults by encouraging debtors to defend themselves in court.

Yet, while much of the FTC’s report appears to put the responsibility of limiting collection litigation on the debtor, Martin reports, “The litigation boom has been propelled by fundamental changes in the way debts are collected, particularly for credit cards. In recent years, credit card companies have increasingly sold off debt they have considered uncollectible to debt buyers, usually for 5 cents or less on the dollar.  The debt buyers, in turn, may try to collect the debt themselves using traditional practices like sending letters or making phone calls to a consumer to try to arrange a payment plan. Increasingly, they are choosing to sue instead.  Collection law firms are able to handle such large volumes of cases because computer software automates much of their work. Typically, a debt buyer sends a law firm an electronic database that contains various data about consumers, including name, home address, the outstanding balance, the date of default and whether interest is still accruing on the account.”

This automation can means more errors, abuses and more litigation; none of which is good for debtors already facing tough economic times and an endless array of economic challenges.

In this environment, it’s important to keep in mind that bankruptcy can be your best weapon against these kinds of debt collections. Bankruptcy can stop secured creditors cold, as well as unsecured creditors, the ones at the bottom of the proverbial food chain, who are more likely to be the ones contacting you via phone, sending you letters, and generally harassing you for cash, any cash, where and when they can.

If you too have been effected by the economy and are wondering how to reduce debt and get back on track, 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 beyond our own “Great Recession.”  The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-800-899-1414, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

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Published Friday, July 30, 2010 @ 8:38 am

Given the popularity of channels like HGTV and all of those televised extreme home makeovers , it’s more than apparent that America is a nation full of  “do-it-yourselfers:” people drawn to the idea of going it alone in order to get it done right—their way, the first time.

As a result, it’s not surprising that in this self-supported culture there are so many services available online and offline that, for a fee, offer any DIY inclined consumer the opportunity to file their own bankruptcy. In fact, in these tough financial times, DIY bankruptcy petition “farms” are becoming increasingly popular for cash-strapped debtors who know that they need bankruptcy protections but don’t believe that they can afford an actual bankruptcy attorney.  Using these services could spell trouble for your self-perpetuated petition and your already beleaguered budget.  Here’s why:

Lack of Adequate Information
When you begin a DIY project for the first time like installing a light or fixing a leaky faucet or even building a home addition, it’s often helpful to have someone there to do more than just sell you the materials. A little instruction can go a long way in making the project a success. The same is true in bankruptcy. Unfortunately, many DIY bankruptcy mills advertise self-serve bankruptcy forms that a debtor may purchase with no instruction manual on how to fill in the forms, much less get the most out of their bankruptcy petition. In the end, mistakes in the bankruptcy forms and filings can cost already insolvent debtors more time and money, including problems with keeping creditors at bay in the future, and possible criminal action if you have omitted an asset or mis-categorized a transaction.

Not Taking Earned Exemptions
In addition to confusion about forms and filings, a lack of instruction can lead to debtors missing out on much needed bankruptcy exemption—often the difference between saving your precious property or losing it to a circling creditor. When dealing with a bankruptcy trustee or creditor claims, a bankruptcy attorney’s experience can be invaluable in determining which of your remaining assets are exempt from their ongoing demands and how to properly claim exemptions.

No Protections From Creditor Attacks
If you’re trying to save your home or car, your bankruptcy petition can be that much more important. However, debtors that go it alone for DIY petitions, face an uphill battle in enacting and enforcing automatic stay protections that help end creditor harassment, foreclosures and repossessions. In the alternative, a personal  bankruptcy filing that is accurately filed as Chapter 7 or Chapter 13, and closely monitored by an experienced bankruptcy attorney can quickly and easily save real and personal property that would otherwise be at the mercy of a trustee anxious to pay off debt and creditors anxious to reclaim what they claim to be theirs.

As a result of the intricacies and nuances of a modern bankruptcy filing, it is essential to consult with a qualified attorney. In most cases, the up front fee for filing is minimal, as little as $338.00. Why go through the headache of doing this on your own? A qualified bankruptcy attorney is important during the bankruptcy process to help you navigate any uncertain waters and work in your best interests during the duration of your personal bankruptcy experience. The bankruptcy attorneys at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-800-899-1414, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

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Published Wednesday, July 28, 2010 @ 6:16 pm

It may come as no surprise that long-term unemployment has a greater effect on layoff victims compared with shorter spells of joblessness. What you may not know is that this impact has far-reaching implications for family, friends and feelings about oneself.

According to a new Pew Research Center survey, more than four in ten (44 $) of people out of work for six months or longer said unemployment had led to “major changes” in their lives, compared with 31 percent of people jobless for less than six months. Forty-three percent of long-term unemployed said they lost contact with close friends, and 38 percent said they lost some self-respect. “Few significant differences are evident between workers who were unemployed less than three months and those who were jobless for three to five months,” according to Pew. “But among those unemployed for six months or longer, experiences with emotional problems increased dramatically.”

Pew’s employment data illustrates how lengthy periods of joblessness –not unusual during these tough economic times—can “strain household budgets, test personal relationships, force changes in career plans and erode self- confidence.” The analysis includes the following trends:

Reduction in Finances
Not surprisingly, more than half of people surveyed (56%) who were unemployed six months or longer say their family income has declined during the recession, compared with 42% who were jobless less than three months and 26% of adults who have not been unemployed since the recession began nearly three years ago. Overall, the long-term unemployed are also more likely to say they are in worse shape financially now than before the recession.

Frayed Relationships With Friends and Family
Think high unemployment rates only affect the people who are unemployed? In truth, almost half (46%) of the long-term unemployed say being unemployed has put an increased strain on their relationship with family, compared with 39 percent of those who were out of work for less than three months. Even friendships have been affected as 43 percent of those unemployed more than six months say they have fallen out of touch with even close friends.

Bad Feelings
Nearly four- in-ten (38%) long-term unemployed report they have lost some self-respect while out of work, compared with 29% who were jobless for shorter periods of time. The long-term unemployed also are significantly more likely to say they sought professional help for depression or other emotional issues while out of work (24% vs. 10% for those unemployed less than three months).

Career Changes
More people appear to be thinking of jobs, even ones they’ve never had, as their unemployment continues. In addition to 43 percent of the long-term unemployed say the recession will have a “big impact” on their ability to achieve their long-term career goals, more than 70 percent of long-term unemployed say they changed their careers or job fields or seriously thought about doing so.

Job Dissatisfaction
For many in this current economic environment, new jobs pay less and have worse benefits than  old ones, with 29 percent of long-term unemployed saying their new job is worse than the one they lost, compared with only 16% of re-employed workers who had been jobless for less than six months.

Pessimistic for New Work
Pew reports that “among adults who are currently unemployed, those who have been jobless for six months or longer are significantly more pessimistic than the short-term unemployed about their chances of finding a job as good as the one they lost.”

If you feel pessimistic about finding a job anytime soon, knowing a qualified bankruptcy attorney might be the first best step to 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 more 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 Friday, June 18, 2010 @ 8:28 am

The times they are a’ changing.’ But are they really getting better for the unemployed?

Back in the 1980s, laws like COBRA were enacted to protect laid-off workers from losing their precious health care immediately following their job loss. COBRA allowed, and currently allows, for unemployed Americans to keep their former employer-provided health care benefits for up to 18 months, assuming those same employees pay the full amount of their premiums along with additional administrative charges.

But fast forward to the recessionary 2000s, when family premiums average about $13,500—economically out of range for many, if not most, of the millions of today’s unemployed.

Taking into account the astronomical cost of health care, a 2009 stimulus bill, with subsequent expansions, tried to changed all that, providing a reprieve in the form 65 percent federal subsidy on health insurance for up to 15 months.  According to a recent article in The Huffington Post, “Workers laid off through May 31 [could] qualify for the benefit through their former employer. ‘It has been a significant program and it has helped many middle-class families to keep their health insurance at a time when maintaining health insurance was difficult because of the high rate of job loss,” said Alan Krueger, the Treasury Department’s chief economist. Official statistics on how many people were helped have yet to be compiled, but Krueger estimates that as many as one-third of eligible unemployed workers enrolled in subsidized coverage.’”

However, this good news is tempered by the fact that Congress is now allowing this emergency health care assistance for unemployed workers to officially expire on May 31, with little willingness to renew it despite pleas from President Obama. And with the unemployment rate still at staggering levels (at just under 10 percent) and with 15 million people looking for work, this post-recession withdrawal of health care assistance is being touted as premature at best.

According to the same The Huffington Post article, “on Saturday night, the White House released a letter Obama sent to congressional leaders of both parties asking for nearly $50 billion in emergency aid to state and local governments to fend off ‘massive layoffs of teachers, police and firefighters’ and to prevent a possible double-dip recession. ‘We are at a critical juncture on our nation’s patch to economic recovery,” the president warned. “It is essential that we continue to explore additional measures to spur job creation and build momentum toward recovery, even as we establish a path to long-term fiscal discipline. At this critical moment, we cannot afford to slide backwards just as our recovery is taking hold.’”

But for some, this experience hardly represents a recovery at all. And from teachers to police to factory workers, this latest economic setback is just one in a long line forcing people to make tough financial decisions. In Marietta, Ohio, for example, “boiler operator Neil Davis is facing the loss of his job as the coal-burning power plant he works at prepares to shut down for good. Davis, 33, has marketable skills but he’s unsure how quickly he’ll be able to find comparable work. His wife is a stay-at-home mom raising two elementary-age children. ‘Being able to have coverage at an affordable rate, we wouldn’t be afraid to take the kids to the doctor if they get sick,’ said Davis. “The economy might be getting better some place, but I don’t know where at.’”

For many, the quickest route to recovery comes from bankruptcy.  Instead of giving up health insurance, bankruptcy allows average Americans to surrender consumer and medical debts that have been keeping them down, while allowing them to devote the dollars they do have to the important work of keeping their families healthy—even if (and when) they’re out of work.

If you too have been effected by the employment crisis, knowing a qualified bankruptcy attorney can also help you to face your financial fears, yielding the right kinds of support, information and insights—at a low cost— for a viable and secure future beyond our own “Great Recession.”  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 Wednesday, June 16, 2010 @ 8:23 am

There is no shortage of bright, shiny signals alerting us that the world of technology is changing faster than we can measure. At one time, shopping on the Internet was considered a decision that could put your entire financial wherewithal at risk. Now, if a company doesn’t have an online shopping cart, it’s outdated. Cell phone cameras were thought of as intrusive, unnecessary accessories that no one is going to care to own. Today, a palm-sized phone has auto-zoom, manual focus and 5-megapixel imaging.

The latest sign of technology’s preponderance is the presence of Blockbuster video on the ever-crowded edge of corporate bankruptcy.

The once de-facto choice of entertainment for family movie nights and awkward first dates everywhere, the home-video stalwart has been muscled out of its marketplace by the Internet. Having already taken out Hollywood video, online movie services have successfully capitalized on America’s lust for convenience. As scary as it is to admit, we have now reached a point where leaving the house to return a movie has become too cumbersome. We are now officially a culture obsessed with remaining insular and micro-local. The more we can get without having to see the sun, the better.

Pardon the digression.

Many years ago, the movie industry launched a very major, very public tirade against film piracy. The ads touting the evils of stealing a studio’s work played as preamble before major releases and took up full color pages in entertainment publications. While there is no question that bootlegging and streaming direct from a studio server is indeed stealing, the legalities of the issue were not what concerned the studio. The amount of money piracy costs studios is only a fraction of what they claim it to be. Most pure cinema lovers would much rather pay $10 to see a film in its all glory on the big screen instead of paying $6 for a blurry, poorly filmed replica. And, until recently, the majority of Americans didn’t have the bandwidth or the screen quality (hello HD!) to make downloading a stolen film worthwhile. And those who could and then sell it were taking only fractions of cents on the whole from the box office.

Instead, the studios real concern was that they did not want to get beat to market. The threats of penalties and jail time simply provided a convenient way to delay their competition until things fell into place.

Today, some movies make it to the consumer market only weeks after theatrical release. Netflix, Blockbuster and iTunes all offer legitimate, direct downloads of movies for the same amount they once cost to physically pick from the shelf. Cable and satellite television service providers offer “on-demand” services that play a recent release with the push of a button and an easy add-on to your monthly bill.

At one time, Blockbuster and Hollywood video lived and died by the sale of VHS and DVD player manufacturing. After all, the entities were useless without one another. Walk into a Wal-Mart or Best Buy today and you’ll notice that Samsung, Sony and Panasonic are much more friendly with your local Internet service provider than your neighborhood video store, as more video players are connecting, via WiFi of course, to the Web to download movies directly to your television.

You see, there was really no concern with what piracy was costing the folks at Warner Brothers, Paramount and MGM. Ultimately, the pirate market was simply one they couldn’t control. But it’s not an issue anymore because technology has caught up to their plans. They now know how to make money on Web-based content.

Now, about those video cell phones …

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Published Wednesday, May 19, 2010 @ 8:20 am

In a move that, as The New York Times described it, “will affect most American corporations,” the Labor Department has announced its latest mandates for company compliance with plans to end wage violations, increase workplace safety and adhere to equal employment laws.

As The New York Times’ Steve Greenhouse reported, “The effort, aimed in part at reducing the incidence of employers not paying overtime and improperly classifying workers as independent contractors, will require them to document many of their decisions and share that information with their workers and the government. In announcing the department’s intentions on Thursday, Deputy Labor Secretary Seth Harris said his department wanted to foster a culture of compliance among employers to replace what he described as a ‘catch me if you can’ system in which too many companies violated employment laws.”

Within these broader strategies for corporate compliance is the potential for added protections for employees considering the benefits of bankruptcy.

The broader strokes of this literal “work-in-progress” are two-fold:

(1) Workplace Safety. New Labor Department rules would require employers to stop “planning” and start “doing,” by developing formal policies for eliminating safety and security hazards in the workplace and directly engaging in these plans in order to evaluate their effectiveness.

(2) Worker Classification. In this effort, the Labor Department is targeting companies who avoid paying workers their due overtime pay and improperly classifying employees to avoid providing proper benefits. In doing so, these changes will require these same companies to document these classifications, providing written explanations of the reasons behind that classification and sharing those explanations with workers and government agencies.

Like clockwork, business interest groups are fighting these Labor Department plans, arguing the new rules mean new burdens on already beleaguered employers without “necessarily improving compliance with labor laws.”  And with these proposed changes still in the development stages—giving big business another opportunity to attack the finalized plans—experts say it’s likely to be a year before the changes can be implemented.

Despite these challenges, as Greenhouse reports, “Department officials say they hope the plan will greatly reduce problems in industries with widespread wage violations, like restaurants and discount retailing, and those with widespread safety violations, like coal mining and construction.”

Labor Department Benefits and Bankruptcy. In addition to activating more transparent corporate compliance of internal safety practices and classification policies, this new plan may also extend to employment law protections, reinvigorating enforcement of workplace anti-discrimination policies aimed at protecting employees who have bad credit or are bankruptcy bound. Currently, federal bankruptcy law contains some provisions which prevent unfair treatment of employees who have filed for bankruptcy.

While some employers can run a credit check on prospective employees, under federal law, these same companies must actually get written permission from applicants in order to run their credit check. In the meantime, consumer advocacy groups are showing their support for legislative bans on these types of credit checks, pointing out that credit reports can also contain inaccurate information.

While credit checks are sometimes used in the hiring process, your decision to file bankruptcy should never affect your employment status with an employer.

Until these worker-friendly benefits are in place, consulting with a qualified bankruptcy attorney when facing concerns about your bankruptcy impacting your employment, could be your next, best step.

A qualified bankruptcy attorney can assist jobless and employed citizens with even the worst credit histories 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.

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Published Thursday, May 13, 2010 @ 3:20 pm

When you’re deep in debt, it may seem like your creditors are an ever-present part of your life…showing up where and when you least expect them. The calls and letters alone can leave your reeling, and feeling, used and abused.

As we’ve already seen in the first two parts of the four-part series, “Creating a Barrier to Bill Collectors,” unsecured creditors, the ones at the bottom of the financial food chain, are more likely to be the ones contacting you via phone, sending you letters, and generally harassing you for cash, any cash, where and when they can. We’ve already examined how many unsecured debt collecting strategies are simply veiled threats and how to actually use Federal law to stop the harassment altogether; and now it’s time to address the limits of when and where creditors can contact you.

So when can debt collectors contact you?

To temper their harassment, bill collectors must tell you that they’re calling from a collection agency. In addition, they must identify the original creditor and the amount you owe. Further, they must tell you that you have 30 days to dispute the debt.

While these are the things they can say, there are limits to when they can say it. As a general rule, debt collectors can only contact you at “reasonable times.” Namely, they can’t call you when they have reason to believe it’s inconvenient (read: not late at night or early in the morning); nor can they get in touch with you when they are aware than an attorney is representing you.

This deterrent is in place even when a bill collector calls during traditionally “convenient times.” For example, in a situation where a bill collector calls, you can tell the bill collector you’re busy. Upon hearing this, if the bill collector does not end the call, arguably they are in violation of the Fair Debt Collection Practices Act (FDCPA), a Federal law discussed in detail earlier in this series. The same is true if someone other than you answers the phone to tell the debt collector you’re asleep or otherwise indisposed. And, in general, bill collectors can’t call, write or visit you if you send them “cease and desist” letter asking them to stop communicating with you. While the letter doesn’t end your obligation to your creditor, this simple letter should do the trick to stop the collector’s abuse.  To ensure receipt, send it by certified mail, return receipt requested, and send a copy to your creditor.

The law also limits where creditors can come a’calling, including places that are inconvenient for your or might cause undue embarrassment. As a result, generally creditors are not allowed to address your debts at your workplace. This bar on embarrassing the debtor extends to third parties as well. With the exception of spouses, guardians and your trusted attorney, bill collectors cannot contact others about your debt; this treatment extends to your parents (if you’re not a minor), siblings, grandparents and extended family or friends.

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

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Published Sunday, May 9, 2010 @ 8:28 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, in the weeks following this tax season’s deadline, important financial news abounds for many cash-strapped citizens and the struggling states they live in.

Looking for good news amid the bad? Take a gander at the latest economic outlook and what it might mean for you.

Our Great Recession Continues (Or Not)
Last week, the Business Cycle Dating Committee of the National Bureau of Economic Research, a group responsible for determining official start and end dates for recessions based on analysis of financial indicators, announced that it cannot yet officially declare an end to the recession. The report indicates that, though many economic indicators have improved in recent months (including mortgage defaults, hiring and retail sales), it is still too soon to say whether or not the recession has come to a close. But the news isn’t all bad….In contrast, one member of the committee disagreed with the  final decision, issuing a memo citing the following two indicators as primary reasons why he believes the recession has already ended, including the fact that Real Gross Domestic Product (GDP), the measure of our country’s overall economic output in a given year, has reportedly improved since June of 2009; and that Real Gross Domestic Income (GDI) has also apparently improved.

To corroborate this evidence, The Huffington Post reported this week, that 70% of those recently surveyed by The National Association for Business Economics believe real Gross Domestic Product (GDP) will “grow by more than two percent this year, up from 61 percent who said the same in January. Twenty-four percent are predicting real GDP will grow by more than 3 percent in 2010, up from 14 percent earlier this year. ‘Industry demand moved higher compared to results in the January 2010 report, pointing to stronger growth in 2010,’ said William Strauss, a senior economist at the Federal Reserve Bank of Chicago. ‘After more than two years of job losses, job creation increased in the first quarter of 2010, suggesting a better outlook for hiring over the next six months.’ The NABE forecast…shows fewer jobs are being shed, more are being created and more companies are making money.”

Hiring Up, and Congress Extends Unemployment Benefits
Similarly, HuffPost revealed that recent hiring growth is said to be at its fastest pace in 10 months.  “American employers in March added 162,000 jobs, the most in three years. Wages and salaries also are improving. Respondents reporting higher pay more than doubled to 26 percent, while those reporting a decline in wages slipped to 6 percent from 7 percent in January. The net reading for wages and salaries – planned increases minus planned cuts – was 20, the highest reading since January 2008. Higher salaries would bode well for the recovery, since consumer spending accounts for as much as 70 percent of U.S. economic activity.”
Despite the increase in hiring, unemployment remains close to 10 percent, meaning that millions of American families may not feel the recession’s end for a while. But everything’s not lost for families suffering from extended joblessness. According to the New York Times the Senate has voted 60 – 40 in favor of extending unemployment benefits. Were it to pass both houses of Congress, the measure would apparently cost approximately $18 billion—a hefty stumbling block for fiscally-conservative Senate Republicans.

Tax Time 2010 Was One of the Best It’s Been

According to Newsweek, we’ll “look back on April 15, 2010, as the day we got of cheaply.”  Due to a staggering national budget deficit and an aging American populace living off (and depleting) Social Security, all signs point to tax increases on the horizon—another good news/bad news scenario that should have us enjoying the “good times,” while we can.

If the financial news from your household is less than good, it may be time to turn to bankruptcy. If you, and your family, have been effected by the economy and are wondering how to get back on track, 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 beyond our own “Great Recession.”  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 Tuesday, May 4, 2010 @ 8:22 am

In this tough economy, it may seem like your creditors are an ever-present part of your life…showing up where and when you least expect, or need, them. But creditors with real teeth (i.e., car lenders, mortgage holders, and landlords) don’t need to make harassing calls or threaten you in order to get what they want. They can just take your stuff: cars in default, homes in foreclosure, rentals in eviction. While bankruptcy can stop secured creditors cold, in the alternative, unsecured creditors, the ones at the bottom of the proverbial food chain, are more likely to be the ones contacting you via phone, sending you letters, and generally harassing you for cash, any cash, where and when they can.

So what are you to do when these sneaky solicitors become too much?

In this four-part series, “Creating a Barrier to Bill Collectors,” we’ll debunk unsecured debt collecting strategies, explain how to use Federal law to stop the harassment, explore the limits of when creditors can contact you, and finally, show you how bankruptcy can solve everything.

We’ll start with a basic understanding of how much (or little) creditors can actually hurt you.

Unlike home, car and other secured lenders, unsecured creditors and their hired goons, the collection services, only have vague threats “to take further action” if you do not pay your bills. These actions could include, canceling your account, reporting you to credit unions, or threatening to get a judgment against you.

In actuality, (and the more likely scenario in this tough economy where defaults are the norm, not the exception), your creditor may already have canceled your account, already reported you to a credit bureau and is likely telling you they’re considering legal action. None of this is necessarily bad news or should cause you to worry.  There are worse things than having an unsecured account, like a credit card, canceled—especially one that you couldn’t afford to pay in the first place. Once your account is canceled, your interest rates don’t rise and you can begin the work of paying down your bill or getting the debt expunged with bankruptcy. Assuming they’ve already reported you to the credit agencies, that removes one more piece of leverage for getting you to pay. And, finally, keep in mind that debt collectors may threaten lawsuits, but are always looking for the cheapest way out…and that’s to harass you for your money, not hiring a lawyer. So, don’t give in, or give up.

What debt collectors can’t do is report your delinquency to your employer or otherwise publish your debt to the public; nor can they take your property prior to suing and obtaining a judgment against you.  Regardless, the process of gaining a judgment is complex, time-consuming and costly, leaving many lenders using traditional, aggressive tactics to try and get back at you and your money.

In short, it’s better to give bill collectors nothing than even a small amount that will keep them coming back for more. You can always square your debts directly with your creditor or consider your other options; coming up in this series we’ll discuss how to use federal law to keep bill collectors at bay, the ways to call collectors on their intrusive practices, and using bankruptcy to not only erase unsecured debts, but also the hassles of debt collection.

If you too have been effected by the economy and are wondering how to reduce debt and get back on track, 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 beyond our own “Great Recession.”  The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-800-899-1414, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

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Published Friday, April 23, 2010 @ 1:05 pm

Since the Great Recession began in 2007, small businesses across the country have been squeezed.  Exacerbated by the flagging economy, small business owners everywhere are not only facing high employee health care costs and lagging consumer and commercial spending, but also fewer credit options. And while loans have always been the lifeblood of the small business, all across our great nation, mom and pop endeavors with even the most solid credit histories face tremendous obstacles in qualifying for much-needed capital. And because small business accounts for some 65% of employment in a nation already facing off-the-charts job losses, any squeeze on small firms is a serious matter—with last year’s disconcerting lending figures illustrating just how serious—for the long haul.

As The Huffington Post reports in their recent article, “Small Business in Debt Rescued by Loyal Customers,” the small businesses situated in the tiny town of Point Lookout, on Long Island, are no exception. “Like many small towns, Point Lookout is served by family-run businesses that struggle to compete with chain stores and suppliers. In the recession this struggle becomes even harder. Point Lookout’s Merola’s grocery store found itself deeply in debt and on the brink of bankruptcy, despite being beloved by town residents.”

HuffPost refers to a recent The New York Times article featuring one such town resident named Dana Conklin, who stepped in to save the struggling grocery store. Conklin, a loyal Merola customer and Point Lookout native, “suggested a one-time fund-raising drive so that customers could help pay the bills and keep the store going until business picked up in the spring and summer. And one by one, customers trooped in with checks or mailed them in — at last notice, more than 150 of them covering almost half of the store’s $100,000 debt to the supplier.”

While these altruistic acts show the unique importance of small business in tiny hamlets like Point Lookout, NY, many small businesses haven’t been so lucky, with many “overhauling their practices to get a leg up in the recession.” For the family-run Merola grocery store, that means operating “smater and tougher — probably fewer jobs for local kids, employees paying for part of their health care, and the market aggressively seeking new niches, like, say, delivering food to people on the beach.”Regardless of changes the business itself makes, as The Huffington Post rightly points out, “customer loyalty and commitment will be an invaluable asset in the fight.”

And based on last year’s anemic lending figures and the continuing trend of evaporating loans for small business, many mom and pop endeavors are also seeking shelter through the benefits of bankruptcy. The truth remains, if you are no longer able to sustain or expand your business in your current financial situation, filing for bankruptcy may be your best bet. And, in this case, the best move a beleaguered small business owner can make is to consult an experienced bankruptcy attorney who specializes in small business cases. Skilled bankruptcy attorneys like those at The Law Offices of John T. Orcutt can get to work early, navigate any uncertain waters of bankruptcy court and work in your best interests during the duration of your small business bankruptcy. The attorneys at The Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-800-899-1414, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

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Published Wednesday, March 31, 2010 @ 7:52 am

If the NHL’s Phoenix Coyotes can bounce back from bankruptcy, anyone can. Well, any sports franchise, that is.

After more than a year of backdoor dealings, personal vendettas and one of the most back-and-forth bankruptcy fiascoes to burden a modern major sports franchise, the Phoenix Coyotes have made the playoffs for the first time since 2002.

Managerially broken and in the financial penalty box for the majority of its existence in Arizona, few gave the desert-based ice hockey team much of a chance to rebound into relevancy, especially after the way its bankruptcy proceedings transpired. Most believed the team would eventually fold or be moved to a more hockey-friendly market.

The hassles all started after the team’s owner tried to enter the team into bankruptcy in an attempt to create the ideal sales position for Canadian billionaire, Jim Balsillie, who is intent on having a third team in Ontario. It became quite obvious that the two were cohorts in the deal; one wanted to rid himself of a financial boat anchor and the other wanted to set sail back east. However, league rules state that a team’s ownership entity cannot file bankruptcy without board approval. So league officials stepped into the bankruptcy proceedings. That’s when things became a real mess.

Prior to the filing, the team was struggling with poor attendance and even worse performance. To put it mildly, it didn’t look good for the NHL’s most risky large-market experiment. Add to that the NHL Board of Commissioner’s general dislike for Balsillie and the Coyotes looked doomed.

After a number of court battles, the league itself won the bid of ownership out of bankruptcy court just before the start of this season. The league installed a new head coach after one-time part owner and coach, Wayne Gretzky, did not have interest in returning to the bench.

Needless to say, the puck has slid in favor of professional hockey’s desert dogs. New coach Dave Tippitt has taken one of the league’s smallest payrolls with little offensive prowess and created a tough-minded testament to the importance of a stout defense. Last year’s young and generally inexperienced shifts were bolstered by solid mid-season veteran pick-ups and a commitment to not letting the other team establish an offensive rhythm.

Now with a dense crowd of loyal fans eager to part with their recession-weakened paychecks howling for victory, the Phoenix Coyotes are more than just another feel good sports story—they’re a darn good hockey club.

Tony Gallagher, sports writer for The Province, a newspaper in British Columbia, believes Tippitt should be considered for league coaching awards, writing that Tippitt’s work ” … should not only earn him coach-of-the-year honours, but may well go down as one of the best single-year coaching jobs of all time.”

However, Tippitt is quick to wave off any real differences between he and the Great One, who captained the team during its formative years. He simply believes the change in focus from young and aggressive to experienced and stout behind the blue line is what’s making the difference.

“This notion that I’m great and Wayne isn’t a good coach is wrong,” says Tippett. “They were just too young last year.”

Whatever the reason for Gretzky’s team not winning, it was probably a good thing he didn’t return. Sometimes, all it takes to return a team to winning is a complete reset. And just like in the financial personal lives of millions of Americans, it seems bankruptcy was the ideal way to start over.

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Published Monday, March 29, 2010 @ 7:47 am

Dear Consumers,

Just kidding.

Yours,
LifeLock

To follow up on a recent post about the overzealous marketing of credit report monitoring services, we bring you the latest in what can now be called a disturbing trend in financial fear-marketing.

LifeLock , the company that boasted their monthly fee-based privacy system could thwart even the Impossible Missions Force from seizing your identity or accessing your credit is now on the hook for $12 million to the Federal Trade Commission (FTC) for … wait for it … misleading consumers about the nature of its products.

You can’t make this stuff up.

From the Law Offices of John T. Orcutt. Call today for a free and confidential debt consolidation. 1-800-899-1414.

Not long ago, LifeLock had mobile billboards plastered with its CEO’s social security number parading through major metropolitan areas and were blistering radio and television channels with endless pronouncements about the strength of their identity monitoring products. The ads were extremely effective.

The company managed to positively boost its product without literally telling you to run under the bed and hide from all the identity thieves lurking inside your computer and around your trash cans. The understated importance of the CEO’s claim made one think, “Man, I better do something or I’ll be a victim.” Life insurance salesmen were taking copious notes.

The company is also settling with more than 30 states, including North Carolina. In a written statement, FTC Chairman Jon Leibowitz summarized the issue, “While LifeLock promised consumers complete protection against all types of identity theft, in truth, the protection it actually provided left enough holes that you could drive a truck through it.”

Ouch.

The settlement contains language that orders the company to immediately cease making claims that its service can absolutely prevent identity theft and make customer information useless to identity thieves.

The company also has to agree to—this is toughest part of the settlement—protect its customers’ information. Apparently, the FTC investigation uncovered that once under the watch of LifeLock employees, the privacy of customer information was neglected.

According to the FTC, the most misleading component of the company’s marketing plan was the claim it can stop all forms of identity theft. The truth is that it can only prevent a very specific type of theft that is found in a minority of cases.

Very much like keeping track of your credit, you can monitor fraud quite easily on your own. If you have credit cards, you can arrange a number of alerts that pertain to spending habits and frequency. Your bank can do the same for your debit card as well.

This post is not meant to minimize the impact of identity theft. It is certainly a very painful and common type of crime that has lead many people to bankruptcy court. And in many cases, even the most diligent purveyors of their finances have been become victim. However, it is unfortunate that today, in the age of the Great Recession, we have to be as equally watchful of the those who come to us with help, regardless of how often they are put in front of us as heroes.

The LifeLock case has rendered the company’s advertising plan somewhat mute. In response, you may have noticed a few other industry players fighting for the competitive space. LifeLock did right by their investors by placing a very positive spin on the settlement, calling it a step forward for consumers.

Todd Davis, LifeLock CEO, remained front and center in the case, saying, “We welcome federal and state efforts to regulate our industry, because doing so helps to protect consumers from the risks of identity theft.”

Mr. Davis, who else should we be worried about?

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Published Friday, March 19, 2010 @ 7:09 am

This time of year, America is officially springing forward with most U.S. citizens trading an hour’s worth of sleep for more evening sunshine to enjoy after work. Yet, Daylight’s Savings Time 2010 means more than additional playtime for you in the daylight hours; it also means it’s primetime for planning a much-needed Spring Break and/or, in many cases, a much-deserved Summer vacation.

If you’ve recently filed for bankruptcy or simply made a New Year’s resolution to overcome your personal credit crunch, you may be wondering how you can possibly enjoy a little rest and relaxation on a vacation without the crutch of credit cards.

While it may sound hard to believe, it’s actually relatively easy to travel without credit with many hotels, motels, airlines and car rental agencies offering “creditless options,” for consumers on a budget.

Planning Ahead to Get Away Credit-Free
While most hotels or rentals will accept debit cards, the true key to traveling credit-free is to plan ahead…and now’s the perfect time.  Make reservations 10-30 days before you plan to travel in order to guarantee you won’t need your credit card to get started with your getaway. This extra time will allow you to research the correct vendors for your credit-less adventure.

Reserving Your Room Without Credit
As you’re probably aware, these days hotels and motels expect you to guarantee your reservations with a credit or debit car. However, what is less well-known is that most hotels have policies regarding credit-less travel that allow consumers like you to circumvent the normal credit-dependent details. In general, these policies can range from prepaying the entire stay (ensuring you aren’t living beyond your vacation means) to simply prepaying your deposit (normally one-night’s stay).  In addition to the benefits of not using high-interest cards to reserve your stay, your pre-pay allows you to travel without carrying a ton of cash. Cash stand-ins like Travelers Checks can also reduce the possibility of losing your hat while enjoying your vacation. To find out the policies of your favorite hotels or those in your intended destination, start by dialing the hotel’s toll-free 800 number and inquiring about their “credit-less policy.” While some hotels have company-wide policies, others decide on a hotel-by-hotel basis.

Renting A Car Without Your Card
In some cases, rental car agencies don’t accept debit cards. However, like hotels and motels, almost all rental companies have policies for credit-less reservations. According to author and financial consultant Paula Langguth Ryan, Alamo Rental Car is an especially consumer-friendly choice when attempting to rent a car without a credit card.  In her book, Bounce Back From Bankruptcy, Paula explains that Alamo built there business on creditless travel and continues this trend by avoiding applications or making arrangements ahead of time, while also allowing you to pay directly with cash. In return for making creditless travel so hassle-free, you must make arrangements a minimum of 24-hours ahead of time, pay a deposit, and provide copies of bills and pay stubs to verify your ability to pay—a small price to pay to avoid the interest of credit and the hassles of contracts.

Catching a Flight without Breaking the Bank
Today, it’s normally routine to purchase tickets using debit cards. Some companies, like US Airways, will also accept payment over the phone using an electronic check transfer, requiring you to not only have the funds beforehand, but also having your checkbook handy when purchasing your flight. Another no or low hassle way to pay your way with the cash you have (either using green backs or debit cards), is to use a local travel agent.

In short, planning your vacation need not be financially painful; you merely need to pick your hotel and car rental and ask for options with “creditless travel;” book your plane tickets through debit, electronic check transfers, or both through the airline or a travel agent; and pack any cash you do take in the form of traveler’s checks—assuring a safe, hassle-free and financial freeing vacation!

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

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

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

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

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

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

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

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

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

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

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Published Monday, March 1, 2010 @ 11:15 am

Overworked? Underpaid? Join the Club: The Middle Class

This week, a money-themed CBS Sunday Morning featured Cary, North Carolina’s SAS, a business software company–featuring subsidized on-site daycare, gyms, and health care–as an example of a corporate aberration in the these tough economic times. As CBS reporter Jim Axelrod pointed out in his cover story “The Great American Paycheck Squeeze,” the reality is, “for more and more Americans in these recessionary times, SAS might as well be Disney World. The fact is, most workers feel overworked, under-appreciated and–most of all–under-paid.”

What’s your work experience in this decade of decline? Overworked? Underpaid? Or just happy to be here? Regardless, it’s a tough time to be almost anyone in the work force.

“We’re living through one of the worst times for wage growth ever,” Larry Mishel, an economist with the Economic Policy Institute, a non-partisan, non-profit Washington think tank told CBS. “From 2002 to 2007, the hourly compensation of a typical college graduate or a typical high school graduate went up zero – didn’t grow at all.”

Mishel says for most American workers, wages haven’t been keeping up with productivity for some 40 years.

“If you’re in manufacturing, there’s pressure from overseas,” he said. “We’ve weakened the ability to have and keep a union, we’ve introduced privatization, we have a much lower minimum wage, in many industries, we’ve deregulated them.”

And then enter this decade’s Great Recession, marked by rising foreclosure rates, escalating health care costs, recent credit card company schemes and unprecedented unemployment.
“We’ve seen the steepest and longest rise in unemployment since the Great Depression,” Mishel told CBS’s Axelrod. “This has a tremendous downward pressure on wages. Employers have all the leverage; they don’t have to give you more money to get you accept a job.

“In a Great Recession, you don’t have songs that say, ‘Take this job and shove it!’” Mishel said.

Specifically, the economist points to the fact that from the 1940s until around 1970, “as workers became more productive, their salaries grew accordingly. But around 1970, things changed, and for the next four decades, as productivity skyrocketed 70%, hourly wages hardly budged, rising a mere four percent.”

And what happened to all of those profits?  Mishel points to the upper echelon of business leadership. “Between 1989 and 2007, before the Great Recession, of all the income growth that was generated, the bottom 90 percent [of Americans] got only 15 percent of it. The upper one percent got 55 percent. And the upper tenth of the upper one percent, the one out of 1,000 households, got about a third of all the income growth.”

In other words, a third of all income growth went to one tenth of one percent of people, leaving the middle class with little to show for all of the country’s purported economic growth.

“We know that CEOs in large companies make 270 times that of a typical worker,” Mishel said. “It used to be around 20 times, 30 times, back in the ’60s and ’70s. Now the fact is, you don’t have to pay someone that much to get out of bed and go to work and be productive.”

The economist also challenged anyone who says we’re actually better off now than 40 years ago. “It’s really a low threshold to say families are a little better off than 30 years ago, when the pie grew by 70%,” Mishel said. “They should be far better off.”

Which brings us back to the story of SAS, and what co-founder and CEO Jim Goodnight is trying to do: redefine the concept of “fair wage.”

“You know, I always use the phrase, ’95 percent of my assets drive out the front gate every night, and it’s my job to bring ‘em back,’” Goodnight said to CBS.

And for anyone trying to grow a business in this economy, Goodnight’s view is that these fringe benefits are just “the smart thing to do.”

“The point of the benefits is to keep people,” said Goodnight. “And if you keep people and make your people happy, they’re going to make your customers happy. And if your customers are happy, they’re going to make the company happy. So, it’s sort of a triangle there that you have to always keep in mind.”

So, if you’re reading this and wishing you too could work for SAS, take heart. Even in these tough economic times, the company is hiring. But apply now . . . not surprisingly last year SAS received nearly 40,000 resumes.

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Published Saturday, February 13, 2010 @ 8:08 am

In this era of extreme homeowner hardship, mounting medical bills, and surging unemployment, most people use their credit cards—for better or for worse—just to get by. But, as everyone knows, there’s a price to pay for playing with plastic, including, over recent years, soaring interest rates, diminishing card disclosures, and a general lack of lender and credit card company transparency.

Well, now a hint of positive consumer news is just on the horizon. In addition to a few provisions enacted in August 2009 signifying a new era of consumer protection law, as of February 22, 2010, even more sweeping changes are set to occur in an effort to right several of the most basic wrongs credit card companies have increasingly imposed upon card holders.

The all-new Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act), signed into law by President Obama on May 22, 2009, is poised to protect consumers from unexpected and massive changes to their credit card terms—terms that have previously led to financial hardship for an overwhelming amount of American families.

As of February 22, 2010, major changes include:

Death to the “Default Clause”
Credit card issuers will be unable to increase interest rates on existing credit card balances unless you, as borrower, are a minimum of 60 days late on your card account. This provision eliminates the universal “default clause” whereby card companies could simply your increase interest rates and fees based on defaults on other debts.

Clear and Present Disclosure &  Standard Promotional Periods
Credit card companies must provide clear disclosure of account terms before you open a credit card account. Additionally, if the account is pitched with a promotional interest rate period, that rate must last a minimum of six months.

Interest Rates Remain In Check
Issuers cannot raise interest rates on your new credit cards during the first year of your account, unless the you are 60 days late on a credit card payment.

Overcoming Over Limit Fees
Credit card issuers cannot charge over-limit fees without your prior consent to accept and process over-limit transactions. If your consent is obtained, the card issuer cannot then charge more than one over-limit fee per billing cycle. Also, the issuer may not charge an over-limit fee if interest charges or fees are the reason the account is over its limit.

Packing Up Those Penalties
Credit card issuers must not charge penalties for receipt of payments by mail, phone, electronic transfer, or any other method, unless the payment is processed through an expedited service processor.

Avoids Taking Advantage of Younger Borrowers
These new rules make it much more difficult for credit card companies to target and issue cards to borrowers under age 21 without a co-signer, unless it is shown that the borrower has sufficient income to repay the card amount.

Atone for the Holidays
If an account due date falls on a weekend or holiday, the credit card company is forbidden from penalizing payments that are received on the following business day. In addition, any account payments received by 5 PM must be credited to the same day.

Down with Double Billing
Some credit card companies have used the previous month’s balance to calculate interest charges for the current month. These provisions forbid this type of “double-cycle billing.”

Payment Where Payment is Due
Card companies are required to apply any payment above your minimum amount due to your highest interest balance first.

Subprime Bargain
At the time the account is opened, subprime credit cards will have fee limits totaling 25% or less of the credit limit.

Disclosure Is In Demand
Credit card issuers must provide a written explanation of how long it will take to pay off your card’s existing balance and the total cost in interest fees if you pay only the minimum amount due, as well as the total cost in interest to pay off the balance within 3 years.

Terms You Can Live By
Credit card companies must also make account terms and cardholder agreements available to you online.

While provisions like these mark a major victory for consumer protection, this major overhaul is causing some unpredicted aftereffects, including demanding credit approval checks, a reduction in credit card limits, and, in some cases, the sudden closure of these cards by your cardholder.

Despite any good news, if credit card debt and demands have still got you down, an experienced bankruptcy attorney can be a useful resource. Visit the website of The Law Offices of John T. Orcutt for the latest advice and up-to-date information for creating a better financial future.

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Published Sunday, January 31, 2010 @ 6:04 pm

I’ve never known a person who believed that declaring bankruptcy was an easy solution to their problems. I have never heard anyone suggest that bankruptcy should be used as a tool to intentionally shaft creditors out of spite, or to gain power. Nor have I come across anyone who garnered some sort of perverse pleasure in leaving legitimate creditors, be they large companies or individuals, to twist in the wind.

What I have seen is honest, hardworking people from all walks of life: young, middle aged, or nearing retirement age, who stay trapped and buried under a mountain of debt out of a sense of honor and duty to repay it, even with very little prospect for doing so. These people cannot progress in their lives. Their families are strained, their health is often compromised. They have no choices in their lives because of the debt and they are, in effect, slaves to it. Many may slave for years.

These are people who believe declaring bankruptcy is morally wrong. Who do everything in their power to pay their bills and take care of their families.

Until one day, something happens to make it impossible for them to continue to serve the debt. Sometimes a new crisis occurs, such as the loss of a job, a health problem, an elderly parent needing help, a natural disaster, or other calamity. In some cases, that event is the creditor’s demanding higher interest rates, fees, or minimum payment amounts, despite a person’s diligence and timeliness in making their monthly payment, which pushes the debtor to the breaking point.

Any number of things could become the “straw that breaks the camel’s back” which eventually lands the debtor in a bankruptcy attorney’s office feeling defeated and humiliated.

How did bankruptcy become an issue of morality? Well, most US citizens are Christian or have hailed from a Christian, or other strong religious tradition, which teaches a high regard honesty and integrity in one’s dealings with others. The Psalm 37:21 seems to make a pretty blunt case against the morality of the bankruptcy option: “The wicked borroweth, and payeth not again” (Psalm 37:21). Pretty strong deterrent for the faithful, wouldn’t you say?

But what of the idea of being enslaved by debt? Is this any more morally correct? Especially when creditors have had free reign to pile on additional fees and ever increasing interest rates for so long.

Returning to scriptural reference, the writers of the Old Testament recognized and warned against the imbalance of power between a creditor who has it, and debtor, who doesn’t. Deuteronomy 15:1-11 enacted what is essentially the first bankruptcy law. It states that at the end of every seven years, debtors must cancel debts. In 1800, Congress used this as the basis for the first bankruptcy statutes when it said that a person can file bankruptcy every seven years.

Modern bankruptcy laws propose to alleviate the imbalance of power between the debtor and creditor by sheltering debtors and their families through a series of protections, including the discharge of debts and the ability to exempt certain property from creditors.

Bankruptcy does not forgive debt. It grants a discharge to the honest but unfortunate debtor. There is a significant moral difference. A discharge simply prevents a creditor from enforcing the debt against the debtor, as in a forceful taking of the debtor’s property. There is no proscription against a debtor repaying a debt that has been discharged in bankruptcy if he becomes able to do so later.

It is unfortunate that the issue of debt forgiveness is still morally suspect. This brings about difficult policy as well as personal conflicts that are not easily resolved. Scripture does make it clear that a creditor, who is likely in a more powerful position than his debtor, should do everything possible to keep from embarrassing or crippling his debtor, including forgiving the debt. For those uncomfortable about resolving issues scripturally, the question could be settled another way, by asking: as a society, what benefit do we receive when large segments of the population are enslaved to smaller, but more powerful ones?

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Published Monday, January 4, 2010 @ 7:58 am

Did you find yourself standing around at the stroke of midnight on New Year’s night, hard pressed to think of something, anything, that, in the current economy, you could resolve to do when all you currently think about is money? Whether you were in Times Square or a tiny gathering, you probably weren’t alone. Millions of Americans facing foreclosure of their homes, looming unemployment, mounting consumer and health care debt, and other tenuous financial situations during this still unfolding financial downturn are also struggling to start anew despite facing insolvency. Well, in addition to shedding those pounds and quitting those unhealthy vices, get ready to start your latest (and greatest) resolution with four steps to get yourself on the road to financial fitness in 2010.

Act Now and Assess Your Finances
Figuring out your financial future is sometimes as easy as understanding where you stand today in your day-to-day fiscal life. Are you currently unemployed or feel as though you could lose your job soon? As such, do you have enough money for you debts and everyday expenses?  Are you a homeowner facing foreclosure? Do you have substantial healthcare bills or an ongoing medical condition? Do you have multiple credit card balances or mounting business expenses? Have you recently filed for bankruptcy? What other financial circumstances are you facing? The answers to these questions and others can supply the necessary starting points for charting your next solvent steps.

Put Together a Financial Plan
Financial planning doesn’t necessarily mean hiring someone else to assess your portfolio. It can start by simply tracking your personal spending for a month, while keeping in mind your desire to pay down any debt (consumer, mortgage, or otherwise), reduce expenses, increase your income or discharge debt in bankruptcy.  Once you establish a system you’re comfortable with, you can more closely keep track of your current financial situation, including how much money you may be wasting on unnecessary items and interest and how much savings you can accumulate under a new, leaner budget.

Save Up for the Unexpected
If you’re facing unemployment, increased interest on credit cards or mortgages, or high medical costs, personal savings can provide a much-needed security blanket for tough economic times. To avoid hefty hardships from expected bills, start with a target savings of at least three months of income.  This necessary nest egg can be a lifesaver in these uncertain economic times and provide much-needed peace of mind.

Consider a Clean Slate Through Bankruptcy
Once your plan is in place, you may come to the conclusion that that you don’t have enough money to cover your many monthly expenses, pay mounting debts or save for your financial future. At that point, you may want to consider bankruptcy. A bankruptcy filing can discharge debt and allow you to save for your next steps, including a new home, your child’s college fund, and a pleasant retirement.  In fact, every year bankruptcy attorneys meet with hundreds of people in financial distress.  Each time those who have encountered misfortune, bad judgment, or business failure walk into law offices feeling hopeless and at the end of their rope, perceiving no alternatives to their continuing fiscal problems.  Almost every time, however, it seems more and more when these same clients leave these offices, they feel hope, relief and even, resolved, often for the first time in months or years—resolved that the bankruptcy laws and system offers them the possibility of a new start— at a tolerable cost—and with it a financially viable and secure future. In short, on a personal level, bankruptcy relief ends worry and stress of living on the financial brink…a resolution we can all appreciate.

If you’re bankruptcy bound, learn more by visiting The Law Offices of John T. Orcutt’s “Things to See and Hear” information.

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Published Wednesday, December 23, 2009 @ 5:49 pm

Even in these tough economic times, everyone wants their family and friends to have a nice holiday—full of fun, frivolity and festive giving. And, even if you find yourself among the millions considering bankruptcy in the New Year, you may believe, now more than ever, that it’s open [holiday] season to shop for pricey presents using problem credit cards. In fact, many Americans do charge up expensive tabs in the months preceding the Christmas season when anticipating a bankruptcy—hoping to secure some great gifts prior to wiping away these same debts, along with many others, in January or February.

However, it’s never been more important to avoid a holiday spending binge when seeking this fresh financial start. While prudence alone should speak to some of the reasons to avoid abusing bankruptcy for seasonal gains, the Bankruptcy Code itself addresses the issue of this type of credit card debt as well. Section 523(a)(2) exempts from discharge, any debt that was obtained if an individual made material and false representations about his financial condition (i.e. lies on the credit application). Section 523(a)(2)(C) provides that:

1. consumer debts owed to a single creditor and aggregating more than $500 for luxury goods or services (luxury goods defined as goods or services reasonably not necessary for the support or maintenance of the debtor or a dependent of the debtor) incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and

2. cash advances aggregating more than $750 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable;

Section 523(a)(2)(a) excepts from discharge money, property or services incurred by false pretenses, a false representation, or actual fraud (i.e. incurring debt that you knew or should have known that you would not be able to repay).

In layman’s terms, this translates into a stern warning against unnecessary, binge spending in the months leading up to your bankruptcy. As a result, if you do decide to charge up hundreds or thousands of dollars in charges in November or December and then try to discharge that debt in January or February, credit card lenders have three viable arguments they can use to object to discharging your debt in a bankruptcy case. This type of “discharge litigation” not only risks hefty exemptions from your debt relief, but it is also costly to defend, adding more expensive fuel to the insolvency fire.

What can be even more expensive is how these holiday spending sprees can create potential delays in your bankruptcy filing. Often, a bankruptcy attorney will advise clients in the New Year who reveal large Christmas credit card statements, to wait four to six months at a minimum before filing for bankruptcy—during which time you must continue to make regular payments on your new, larger holiday balances.

If you are already in debt, credit card or otherwise, or facing a loss of income, it’s essential to fight the urge to use plastic to purchase that big screen television, new game console, latest toy or anything else you can’t afford. And, if you’re bankruptcy bound, but must spend during this holiday season, as an alternative to credit, try carrying cash, checks or debit cards. As a result of using the money you actually have, you may make more thoughtful purchases and spend less this season, and, in the end, spend less time digging yourself out of post-holiday season debt and its inevitable barriers to bankruptcy.

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Published Monday, November 30, 2009 @ 11:03 am

The USA Today recently published an article about the changing face of bankruptcy. In other posts, we have noted that we are going through a “middle class recession.” Well, the evidence for both concepts continues to pile up, as the number of people who either currently, or before bankruptcy, brought home well over six figures in salary before filing continues to increase.

A woman interviewed in the USA Today was making $275,000 a year before investing savings into a new business just before the recession really tipped. Credit card bills suddenly went from manageable to frightening and as sales slowed, so did her confidence that things were going to get better. Eventually, she filed for court protection from her creditors.

This was not a woman who took advantage of a bank’s leniency to run up material goods charges she had no intention of repaying. This was an entrepreneur who didn’t see the recession coming, just as surprised as the thousands of highly paid, well-educated financial experts who worked in the heart of Wall Street every day.

A new study recently published proves bankruptcy is ultimately the domain of the middle-class. The study, completed by two Harvard professors and one from Ohio University, states that even before the current downturn, those who have had to file bankruptcy are largely college educated and own homes.

A book to be published based on the report cites that in every month in 2007, 100,000 middle-class families filed bankruptcy. And, those families were financially more troubled than those who filed in 2001.

Washington is just now recognizing the trend, as the head of the TARP program (which administered and manages bailout money), Elizabeth Warren (one of the Harvard professors behind the report) stated. “The bankruptcy filings are a warning about the risks now facing middle-class Americans. No longer can they count on a college education, a good job and home ownership to protect them from financial collapse.”Warren also pointed out that time honored strategies for wealth-building are no longer holding up. Home ownership, steady investing and the support of a college degree are not enough to guarantee financial stability.

Now that the real estate market has demonstrated volatility few realized was possible, a once relied-upon nest egg is often crushed under the weight of a falling market. Add in something like a sudden medical emergency–even if insured–and few people would be able to handle the economic burden.

A couple in Long Island, for example, used equity in a home they owned for 29 years to take care of some mounting financial issues. Health problems soon emerged and work hours were cut back. Diane Spano had to have a kidney transplant and soon after lost her job because the drug treatment center where she worked closed. Her husband, with a back problem, was down to minimal hours at a local post office. Soon after taking out a home equity loan to keep them afloat, they realized the additional monthly expense was just too much. They filed for Chapter 7 bankruptcy to find the help they needed. Both of them were 66-years-old.

We discuss the stigmas of bankruptcy because all too often, we realize that they become primary reasons why people hesitate to file. “What will our friends and family think? Are we failures?” No, your not. And chances are, they’re in the same boat. But you’re smart enough to not let it sink.

If you are in North Carolina, contact the Law Offices of John T. Orcutt today for a free initial debt consultation. We know every client’s situation is unique and we will take the time to carefully address all of your bankruptcy concerns. Call today. 1-800-899-1414.

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Published Tuesday, November 24, 2009 @ 8:40 am

Most people believe that their credit rating will be ruined for the next 8-10 years if they file for bankruptcy. This could not be further from the truth.
Bankruptcy is not a shiny gold star on your credit report, that is for sure, but it is far from a death toll on your credit. In reality, your credit rating is already pretty darn low from all the missed and/ or late payments you have been piling up prior to filing. While I highly doubt any creditors will actually see things this way, filing is actually you showing that you do want to improve and do better for the near and foreseeable future.

Yes, your credit rating will take a hit. Yes, your interest rates will be a bit higher than the norm for a few years, but you are not in a credit purgatory. Once you have filed, you will find that there will be ample opportunity for you to rebuild your credit rating. Do not be surprised if you are flooded with credit card companies offering to help you rebuild your credit. Car dealerships will jump on this bandwagon as well wanting to give you a loan regardless of the fact that you just went through bankruptcy proceedings.

They do so not out of the kindness of their hearts, but out of the greed in them instead. Car dealerships and credit card companies know full well that you have no other option than to take the outrage offer they give you in order to rebuild. You need them; they do not need you. They take advantage of this by hiking up the interest rates and killing you with annual fees.

It can be tempting here to fall back into old habits. If you have yet to get back on solid financial ground than you would probably be better off doing nothing. It takes activity to rebuild your credit rating, but at least you are not doing anymore damage. If you have student loans that are as yet unpaid either start or continue making those payments once your case is discharged. Making installment payments like with a student loan can help rebuild your credit as well.

Bankruptcy is a scary option to consider when you have already been undergoing some tough financial times. The stigma that it carries is enough to keep some people from filing. For others it is the perceived damage that will be incurred on their credit rating. What they fail to realize is that the damage has already been done. Filing bankruptcy cannot do much more than the last year or years of lackluster financial mismanagement have already done.

In fact, bankruptcy will actually be the first step in getting your credit rating back where it needs to be.

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Published Sunday, November 22, 2009 @ 12:37 pm

Does anyone else find it just a little ironic that the two most commonly used bankruptcy options are lucky number 7 and the unlucky number 13? You have to wonder just a little bit if that is fates way of trying to send you a little message…

There are actually six different types of bankruptcy which a person or corporation can file: 7, 9, 11, 12, 13, and 15. More often than not most people will just be looking at filing for either 7 or 13. The tricky part can be in figuring out which one is right for you.

The figuring out part is what you pay your lawyer for, but for something like this you are better off having enough knowledge to be considered dangerous- meaning you know enough to pose the right questions to your lawyer and understand what he or she is saying.

Both Chapter 7 and 13 allow you to get rid of your unsecured debt, meaning all those credit cards you have been living off of will be history. A Chapter 7 is a more immediate bankruptcy discharge, while a Chapter 13 will take a few years to complete The trick there is figuring out whether or not you make more or less than the state average income for a family of the same size. If your income is substantially above the median income, you may have some trouble qualifying for a Chapter 7. If, however, your income is more modest, and you simply need to unload your unsecured debt, Chapter 7 might be the best option.

If you do not qualify for 7, Chapter 13 may still be a great option. A Chapter 13 allows you to get caught up on missed mortgage payments, which can help you stay in your home. It also allows you cram down on undersecured car loans, substantially lowering your monthly living expenses. If you have more equity than can be protected under state exemption laws, Chapter 13 lets you keep the non-exempt property (not possible in a Chapter 7). If high income disqualifies you for a Chapter 7, your disposable monthly income will be determined by the bankruptcy code. After crunching the numbers to see how much money you have left after expenses, the court will decide how much you have left to go towards unsecured creditors. Keep in mind, the majority of Chapter 13 filings do not require any repayment of unsecured debt.

It all depends on your unique situation. If you are like I was and drowning in debt without much of anything to show for than Chapter 7 will be the thing for you. Starting over is probably what you need anyway. If you are still treading water, trying to keep up with your secured debt, than you may want to consider filing Chapter 13. This will get you back on track with your mortgage, and may bring your car payments down. A Chapter 13 also gives you breathing room from debts that won’t go away, such as non-dischargeable student loans, putting them on hold until you complete your plan period.

Talk to an experienced bankruptcy attorney today to discuss your options. In North Carolina, contact the Law Offices of John T. Orcutt at 1-800-899-1414. Always a free first consultation

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Published Thursday, November 5, 2009 @ 10:33 am

Bankruptcy is often filled with as many financial ups and downs as it is emotional ones. A fear of an uncertain future, the unfortunate stigmas about having to file, and the very real dose of reality can certainly be downers.. There is no shame in feeling depressed about your financial struggles. Trust us, you are not the only person feeling that way.

Much like contacting an attorney and filing bankruptcy will eventually relieve your financial troubles, there are a lot of things you can do to stop the emotional setbacks you might face during or after the process.

Experts on happiness, or psychologists really, encourage people to find and explore “their passion.” Sounds corny, sure, but give it a shot. A meditation specialist in Woodacre, CA inspires in her clients a sense of calm by asking them to become aware of the “right now.” By this she means honestly taking the time to assess where you are and what is happening around you. Do you have a roof over your head? (Almost all bankruptcy filers can keep their home.) Do you have loved ones nearby? Is your dog happy to see you? You know, the little things.

This theory is further supported by a university specialist in Wisconsin, Lori Hilt, who adds, “When we get caught up in cycles of brooding and worrying, our minds are stuck in the past or the future.” So focus on the now in order to move forward.

Humor also adds a great deal of levity to emotionally overwhelmed people. Try a night out at a local comedy club or just rent some great stand-up routines on DVD. (If you can’t laugh at Bill Cosby: Himself, one of the cleanest, consistently funny comedy shows ever filmed, then there may be no cure.) And if you can, seek out that old friend that always made you laugh. Tell them about your troubles, let them help you make light of it. It always helps to learn how to laugh at yourself.

Another great way to relieve stress and stay happy is to exercise. We’ve covered this in previous posts but it simply can’t be repeated enough. Science has shown biological changes in people’s emotional states as a result of physical activity. But don’t just walk the stairs or park farther away from the office door—actually get out and spike that heart rate. You’ll be shocked at the effects.

Remember when you were a kid and all you wanted was that great new toy coming out for Christmas? For so many of us, it was all that mattered. Come Easter though, we’d be lucky to even find that toy in the house, at least with all of its parts intact. The point is, material goods really only bring fleeting happiness. So strive to work at other avenues toward happiness. Join a book club, a bowling team or a hiking group. Be more polite to people and seek solace in the karma they send back your way. Hold open doors, say good morning and do favors. Basically, learn to recognize positive feelings in and around you and remember them. Quite literally, sometimes we need to teach ourselves how to be happy.

In the end, staying positive in tight times is about taking control of your money problems. Don’t let them control you, seek help by calling us by and being the aggressor. Take a stand against stress caused by finances. It’s your life; keep living it.

Excerpt Much like contacting an attorney and filing bankruptcy will eventually heal your financial troubles, there are a lot of things you can do to stop the emotional setbacks you might face during or after the process.

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Published Friday, August 21, 2009 @ 5:49 pm

The last installment of the hugely successful Terminator franchise was widely regarded as anemic―except at the box office , where it grossed a healthy $370 million. That’s a pretty good return on the film, and it hasn’t even been released to DVD yet. So with that kind of success, you’d think the franchise owners would be laughing all the way to the bank, right? Well, not quite. This is another case that perfectly illustrates how complicated finances can be―and how bankruptcy protection is an important strategic tool for individuals and business owners, even apparently successful ones . The L.A. Times reported that franchise rights owners Victor Kubicek and Derek Anderson have filed for Chapter 11 bankruptcy protection for three of their companies. The two producers filed with the Los Angeles Bankruptcy Court on the same day they filed lawsuits against their largest investor and a former employee of the company.

Kubicek and Anderson’s company, Halcyon Co., has only produced one film―Terminator Salvation―but they are no strangers to legal disputes. Their current troubles involve a debt owed to a California hedge fund, Pacificor, which financed their purchase of the Terminator franchise rights. The hedge fund initially loaned the pair $30 million, then followed up with two more loans totaling a further $9 million. Halcyon Co. has reportedly paid in $15 million of the total $39 million owed, but they are having trouble paying up the remaining $24 million in capital…and that’s before counting the interest that has accrued on the loan. In their lawsuit filing, the two producers allege that Pacificor put an illegal lien on another one of their companies, Dominion Holdings. It’s through this company that Kubicek and Anderson receive payment as producers of the film, payments which are reported to be the greater of $5 million or 5% of revenue. According to Halcyon’s attorney, the allegedly illegal liens on Dominion Holdings compromised the liquidity of Halcyon and caused the pair’s current struggle to make payments. Citing between $50 and $100 million in both assets and debts, Kubicek and Anderson’s attorney nevertheless express confidence that the company would make it through the bankruptcy filing and emerge from the process with a sound business able to meet all of its legal obligations.

Some media sources jumped the gun and reported Halcyon’s list of creditors as a star-studded event, but a Halcyon spokesperson has since stated that many of those reported were not in fact creditors. Previously reported erroneously as creditors were, among others, Christian Bale, Arnold Schwarzenegger, Warner Bros, Universal Studios, and the law firm Latham & Watkins. The pair does in fact owe on some hefty bills from several other top industry law firms, including Greenberg Traurig, Glasser, Weil, Fink, Jacobs Howerd & Shapiro, and O’Melveny Myers.

Even as news of these developments breaks, Kubicek and Anderson are reportedly working in the beginning stages of a fifth installment of the Terminator franchise, which adds another layer to the already complex legal battle between Halcyon and Pacificor. The hedge fund’s loans were secured with the franchise rights as collateral, which means that if the pair cannot meet their payment obligations, Pacificor could end up owning the franchise rights. Kubicek and Anderson would not be able to produce a fifth film, which could spell the end of a franchise that began in 1984 with the first Terminator film (starring a certain governor you may be familiar with.) Meanwhile, McG, the director of the fourth film, has told some media sources that he is actually planning a trilogy, of which Terminator Salvation was only the first installment. So what will happen with the now 25 year old franchise? For now we’ll have to wait until the bankruptcy court settles the company’s Chapter 11 filing to see whether Kubicek or Anderson will utter another “I’ll be back.”

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Published Friday, August 21, 2009 @ 10:04 am

It’s official: Making Home Affordable isn’t owning up to its namesake.

After months of simmering frustration with the federal program designed to financially encourage lenders to be more cooperative with economically-challenged mortgage holders, it seems that the national media has finally created an outlet for the hundreds of thousands of Americans trying to sort it all out.

The success of a program like Making Home Affordable, and the general willingness of banks to assist consumers in adjusting their mortgages, is so critical because recent reports have indicated that avoiding foreclosure is one of the primary reasons people file bankruptcy. In most cases, a Chapter 13 will allow a person to stay in their home by catching up on missed mortgage payments.

Unfortunately, the disconnect between banks and the federal government is proving too vast to properly serve the folks who need mortgage modification the most. With unemployment still high and more people purging retirement funds to stay afloat, a well-executed mortgage adjustment could provide a beacon of hope. However, the tales of consumer woe in regard to sorting through the phone trees, paperwork, subsections, addenda and misinformed customer service agents are becoming more evident everyday.

An article on MSNBC.com brought to light the trials of a California couple working with Wells Fargo to adjust their mortgage after moving to North Carolina. After several run-arounds about missing and out-of-date forms, their application was eventually rejected partly because, according to the bank, they spend too much money on food.

Try as the government might to deny it, the Making Home Affordable program and the related entanglements twisting within the operations of cooperating banks is nothing more than a perfect example of a bureaucracy trying to do too much too fast. The race to help was started before the route was planned and the participants have found themselves well off track. For every one person helped there a hundred fighting a system designed to make their lives better.

We want to see people get the help they need. That being said, an unfortunate byproduct of the delays and setbacks is that people are waiting longer to make the most beneficial financial decisions. If a mortgage could be modified within a reasonable timeframe, the money saved could be put toward other debts. Once the process is started, applicants begin to base their hope for financial reprieve on the approval of their mortgage modification. When they realize months later that it may not happen, it’s already too late.

One of the scariest reports predicts that by 2011, close to 50% of all homeowners in the United States will owe more on their home than the market says its worth. Other reports show that over 13 percent of mortgage holders are behind on payments or in foreclosure.

Foreclosures are the proverbial boat anchor to an economy trying to shake itself loose from the muck. Their burden is just too much to allow any sort of meaningful recovery and now it looks like the primary federal program designed to pull us free is only dragging us deeper.

If there was ever a time for one last push to initiate the “cramdown bill,” it’s now. If you are behind on your mortgage, speak to a bankruptcy attorney early. Chapter 13 bankruptcy is the only sure way to force your lender to accept a repayment plan. Call today. In North Carolina, call the Law Offices of John T. Orcutt at 1-800-899-1414.

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Published Friday, July 31, 2009 @ 2:46 pm

The Tribune Company, which owns the iconic Chicago newspaper of the same name, has almost completed the process of relinquishing ownership of another Chicago icon. To the tune of $900 million, the Chicago Cubs, famously consistent losers and one of baseball’s most beloved clubs, is being purchased by Tom Ricketts, who had won exclusive negotiating rights as early as January of 2009. The Ricketts family founded the company that eventually became the discount brokerage TD Ameritrade. The Tribune Company’s sale of the team comes as no surprise, as Tribune Company owner and CEO Sam Zell had announced his intention to sell the team since he acquired Tribune Company in December 2007. The Tribune Company owned the team for 28 years; in 1981, it purchased the team and Wrigley Field from the Wrigley family for $20 million.

The Tribune Company filed for Chapter 11 bankruptcy in December 2008, after sustaining third quarter losses of $124 billion. Struggling with more than $13 billion in debt and only $7.6 billion in assets,Tribune Company is expected to emerge from Chapter 11 bankruptcy by the end of 2009. The sale of the Cubs was expected to help Tribune Company complete the process. Most of the Tribune Company’s enormous debt was incurred when Sam Zell led the effort to take the company private in 2007.

The company’s financial quagmire was compounded by the widespread troubles of the print media industry. As the medium competes with others in a time when readers have a huge range of news options, advertising revenues for the industry are in a free fall. Tribune Company’s Chicago Tribune is the 8th largest newspaper in the United States by circulation, trailing another Tribune Company holding, the Los Angeles Times. In addition to the sale of the Cubs, Tribune Company has announced or undertaken the sale of the L.A. Times building in Los Angeles, the Tribune Tower in Chicago and Newsday.

The sale of the Cubs has been considered to be in the final stages for some time, merely pending approval from Major League Baseball. Because the Cubs are an MLB franchise, other MLB owners have veto power over the sale. Before the sale could be completed, it needed approval from 23 of the 30 club owners. As many as 10 other buyers, all offering $1 billion, have been in the running since Zell listed the club and Wrigley field for sale.

In mid-July, several sources reported that the company was considering filing a separate bankruptcy for the Cubs. In order for the bankruptcy to go through, the Tribune Company would have to work out an agreement with the buyers, with Tribune’s creditors approving the sale before the deal went before a judge. This is known as a prepackaged bankruptcy. Many were startled to hear this news, given the popularity of the Chicago Cubs, but the bankruptcy would not necessarily result from financial difficulties faced by the team. Instead, the bankruptcy was characterized as a legal maneuver. A bankruptcy sale would give the new owners clear title, and would not need to be revisited once the judge had given his approval. According to one Bloomberg source, it was believed that Zell had used to team as collateral for some of the company’s debt.  A bankruptcy filing for the Chicago Cubs would not interfere with the day to day operations of the club.

The Cubs have won 11 of 14 games since the All-Star break and currently hold first place in the NL Central. Holy Cow!

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Published Friday, July 24, 2009 @ 8:54 am

In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act was passed, according to the lending industry, to curb the serial filings of perceived “bankruptcy abusers”. The Act’s passage gave rise to the bankruptcy means test, time limitations between filings and higher filing fees. It also complicated the petition process, making the hiring of an experienced attorney a necessity.

As a result of the Act, heavily lobbied by the credit industry and its lobbyists, bankruptcies declined quickly. The year prior to the Act’s passing, there were 6,339 bankruptcy petitions filed during a typical business day. In 2006, the number sharply decreased to 2,372 per day. This year, as America struggles to cope with an economic downturn some say is surpassed by only The Great Depression, personal bankruptcy filings have bounced back to almost 5,600 per day.

The quick jump in the last 18 months demonstrates the severity of the financial morass in which we are all wallowing. The American Bankruptcy Institute (ABI), a 12,000-member organization that provides non-partisan research and education on financial insolvency for professionals, the government and the public, cites that in many areas of the country, per-capita bankruptcy rates have tripled since 2007. More to the point, the ABI’s research shows that bankruptcy remains a last resort for the majority of those who file and that it is not something people tread into lightly.

A professor of law at the Illinois College of Law and a national expert on bankruptcy, supports the ABI’s findings, stating, “… bankruptcy is not really the problem. It’s a symptom.” The ABI predicts that by the end of 2009, 1.4 million people will have filed bankruptcy.

Lawless also points out that bankruptcies lag behind market conditions. In other words, the filings today represent conditions from the fall of 2008 and winter of 2009. As unemployment continues to climb and the financial setbacks refuse to ease this summer, bankruptcy courts will remain busy throughout 2010. Needless to say, Mr. Lawless is not optimistic about the immediate economic future of the country.

The 2005 act is still having an impact, however, as many experts agree that had it not been passed, today’s bankruptcy filings would be above that of the modern annual record of 2,000,000 established in 2005 just before the act became law. It should be noted that the years leading up that record were not the most productive for the United States either, providing additional indication that today’s bankruptcy filings are not solely rooted in irresponsible spending and too much credit.

If you’re feeling the effects of the current recession, bankruptcy can help safeguard your family’s financial future. Call a bankruptcy attorney today. In North Carolina, call 1-800-899-1414 to set up a free initial debt consultation.

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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 Wednesday, July 15, 2009 @ 12:18 pm

The Associated Press is reporting that banks will soon start employing variable interest rate strategies on most credit cards. This means that the days of the fixed rate card are numbered.

It should come as no surprise to you, our loyal readers, that is in response to the federal government’s crackdown on sudden interest rate hikes, vague terminology relative to fees and an industry-wide, consumer-unfriendly marketing approach. The new laws, which will take affect next year, are part of a sweeping legislative effort to help stabilize Americans’ increasing debt load.

The two largest issuers of credit cards in the country, Chase and Bank of America, are on the record stating that most fixed-rate cards will be switching to variable in August. Discover Card has already enacted some of the changes. It will not take long for the rest of the industry to follow in lockstep.

While industry representatives see the step as a helpful one for cardholders, most consumer-advocates are leery. A variable rate may at times offer a lower interest incentive to card users but there is little doubt that an increase will catch many cardholders off guard.

By all means, it is critical for an individual to self-govern in terms of card usage. However, the industry has come under fire for employing complex tactics that require consumers to monitor countless agreement terms every month. A variable rate, which will be based on the fluctuations of the prime rate, simply means there is one more plate in need of spinning. And with more than 230 million card holders between Chase and Bank of America, a lot of porcelain is bound to be broken.

The banks are stating that the variable rate strategy will help them off-set the growing cost of issuing credit. Traditionally, fixed rate cards were reserved for the best customers. However, they rarely remain fixed, as banks adjust them suddenly if they feel a user becomes a higher risk. As it turns out, this happened to hundreds of thousands of customers as the recession stole jobs and cut income. Therefore, the credit card companies bumped rates endlessly, driving people into debt and contributing to the nation’s number of bankruptcy filings.

Now, fixed rate cards are going to be quite rare and banks will have to actually use good judgment when issuing such a credit card to a customer. One bank official in Charlotte, on behalf of Bank of America, said that the new legislation will “… limit our ability to re-price based on risk.”

Isn’t that the point?

The current low prime rate is also contributing to the banks’ decision because they believe a variable rate attracts more users of credit. There are certainly plenty of arguments about the critical nature of new credit in business lending but the consumer banking world should exercise extreme caution if trying to use credit as a means to stimulate spending. We’re simply no where near even the edge of the recession woods yet.

Of course, that’s never stopped the credit card industry before.

If you’re struggling with credit card debt, it’s time to think about bankruptcy. In North Carolina, contact the Law Offices of John T. Orcutt for your free initial debt consultation. 1-800-899-1414.

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

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Published Tuesday, July 14, 2009 @ 11:51 pm

There comes a time when you realize bankruptcy is your best option. That moment is not always the easiest to determine but look for it right around the time you decide it’s safe to ride out the financial monsoon. Chances are, if you are chest-deep in the flood waters and still think you can swim to safety, it’s time you hope for a life raft.

It is quite easy for those within your social circle to paint a picture of social disenfranchisement and shame when you tell them that bankruptcy has become a reality. But ignore it. Do you seriously want to further endanger the well-being of your family because of something a not-very-understanding friend believes?

Today, the bankruptcy decision is often rooted in a far broader swath of rationale than it once was. Medical bills, layoffs, mortgage rates and student loans are affecting the middle class like a bad flu. It is no longer 1950. It is monumentally more difficult to support a family of four on a single-salary auto shop job or teacher’s take-home. Houses cost more. Dependable transportation probably requires financing and few companies offer solid health plans. The bottom line is that a reasonably comfortable lifestyle demands a good amount of money. In this economy, that’s not easy to come by.

Industry analysis shows that most families put off filing for bankruptcy much longer than they should. The constant struggles to stay afloat and avoid the stigma do rarely more than simply delay the inevitable while substantially augmenting household stress levels. At that point, the entire family circle is at risk of a meltdown. Additionally, many families lose assets along the way that could have been used to kick-start things after bankruptcy. Thus, it is critical to recognize your situation and own up to it. Perpetual denials of the benefits of bankruptcy only negate the law’s very purpose, which is to stop the feeling of uneasiness, the lack of productivity,and downward slide of your self-confidence. And, it’s about starting over.

Remember too, that bankruptcy is about preservation. It uses the legal system to empower you from losing everything. It can be a powerful tool to keep those essential items, like your home and auto, while shedding your unsecured debt. This puts you in a better financial position to stay current with your mortgage and your car payment.

Maybe you’re recently unemployed. Bankruptcy can put a freeze on the debt collection calls, and let you focus on what is most important: Finding a job and keeping food on the table.

Don’t let this be a time to cash in your retirement. Almost all experts agree that using retirement accounts to pay small amounts on large bills is foolish. Your IRA and 401k are completely protected under bankruptcy law. Don’t waste your future financial security just to make a monthly credit card payment.

Remember, file bankruptcy when you still have something left to protect. Like your family. And your sanity. It’s simply not worth waiting until the bow of the ship is in the water to fire a flare.

In North Carolina, contact the Law Offices of John T. Orcutt to discuss your bankruptcy options. 1-800-899-1414. Free initial debt consultation with offices in Raleigh, Durham, Fayetteville and Wilson.

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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 @ 2:48 pm

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Published 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 Sunday, June 7, 2009 @ 12:37 pm

Despite being marked as the peak of the recent “boom years”, 2005 is on record as the year in which the most bankruptcies were recorded. Despite heavy job growth and a supposedly great economy, two million Americans sought financial relief from the court system. This year, it looks as if about 1.5 million people will file bankruptcy. While that number may surprise some, it is considerably lower than might be anticipated given the present economic conditions.

In 2005, new laws were passed which aimed to make it much more difficult for individuals to seek bankruptcy protection. It was sold as a way to prevent people from abusing its benefits. However, one need only look at the type of organizations behind the bill’s lobbying…the credit card companies…to know that we were all being sold a bill of goods.

Arguably, the legislative actions of 2005 to “avoid the abuse”, may actually have made things worse.

Before 2005, credit card companies nationwide recognized bankruptcy trends and…in pushing through the 2005 bankruptcy bill…they did all they could to prevent the numbers from continuing to climb. Never being willing to leave well enough alone, never willing to pass up on the needs of “greed”, and confident with the passage of the bill that they had crippled the bankruptcy laws sufficient to make it difficult, if not impossible, for people to file bankruptcy, they timed the introduction of a series of new, aggressive strategies designed to increase profits, around the passage of the new bankruptcy bill. These strategies included and involved massive advertising campaigns to lure more people into debt, introductory interest rates that suddenly spike, new rules for service charges, and increased late fees.

Obviously, with the passage of the 2005 bankruptcy bill, the mindset of the credit card industry had to have been: “Oh boy…we have them where we want them now”. Essentially, they thought…and acted as if… everything they needed to record monumental profits was in place, starting with the 2005 bankruptcy bill, a bill packaged up and delivered with a big red bow by our U.S. Congress.

Historically, bankruptcy had always carried with it the scarlet letter of financial failure. Few people sought protection simply to avoid paying bills; it was a challenging and unfortunately, socially awkward label to adhere to one’s self. The truth be known…not much has changed. Not really. Most people still shrink at the thought of filing bankruptcy, regardless of what the credit industry would want you to believe. So to preach to Capitol Hill, in support of the 2005 bill, that bankruptcy laws were being abused was anything but the full truth.

Still in all, it seems, the creditors got what they wanted: less filings, at least for a period of time, a chance to put more families in debt, and a chance to keep more families in debt. It must have smelled like profit…all the way to the bank.

Oops. As it turns out, it now seems that the higher levels of debt and increased population of those in debt has done a lot more than just hurt those who carry that debt; it’s load has been transferred to our entire economy. With an economy in trouble and with people losing jobs, the default rate on credit cards has soared. Now, banks making a fortune on credit card interest and penalties are all of a sudden looking face to face at a default rate high enough to portend massive losses. The bigger they are, the harder they fall. What goes around comes around. And, but for the misguided efforts to keep these banks from failing, these banks would surely suffer the full measure of what their unbridled greed deserves.

In retrospect, one could argue that if bankruptcy laws remained intact as they were before 2005, the credit card industry would have had less incentive to get more people in debt and, in turn, a lot fewer people would be contributing to the collective national economic downfall we are experiencing today.

For the present, filings continue to climb and threaten to reach new historic highs, in no small part due to our Congress blind to a credit card industry allowed to run rampant over, use and abuse our population.

The lack of available credit is not helping and only goes to show how bad things really are. Without more avenues by which to re-finance, move debt around or consolidate loans, once considered by most as financially savvy methods of dealing with debt…if handled properly…, many of your options and alternatives have disappeared completely…arguably leaving you with only 3 options, and 3 options only: Don’t pay, file bankruptcy or die.

For most people, not being able to pay is no option and dying is unthinkable; explaining why more and more folks are turning to their only viable option remaining, bankruptcy.

The month of May saw 6,020 new bankruptcy cases each day. In April, the number was 5,854. Now, with a continuing tide of commercial bankruptcies, personal filings may see another surge before the end of the year. To no surprise, Michigan’s auto industry failures have driven the rate to new levels and Nevada’s housing crisis is also responsible for a high number of bankruptcies.

Despite all the stats and figures and trends, this news may not be all bad. In the long run, for the majority of those filing bankruptcy, the lessons learned and chance to start anew can only contribute to a healthier overall national economy.

And hopefully, one of the big lessons from all this will be that regulation is a good thing. Continuing to let greedy credit card companies victimize our population and put themselves and our overall economy at serious risk is simply unacceptable.

Need to explore bankruptcy as an solution? In North Carolina, keep the Law Offices of John T. Orcutt in mind. Offering services in 28 counties of North Carolina out of 4 offices located in Raleigh, Durham, Wilson and Fayetteville, we offer a totally FREE and confidential consultation. During normal business hours, just call toll free to 1-800-899-1414, or visit our website at www.billsbills.com.

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