Charlotte, NC Bankruptcy Lawyer and Debt Settlement Legal Services

Archive for the ‘Debt Manangement’ Category

The Republicans, who took the house, several senate seats, and many governorships are now pushing the agenda favored by millions of Americans, hopeful that jobs will come back, while inlfation remains in check.

The Obama Administration, however is still threatening to make a real mess of things after bringing us what can be considered “failed” Obamacare, a “failed” stimulous package, and is now dead set on repurchasing up to $600 Billion (yes, Billion) in treasuries that will surely create out of control inflation.

Wall Street took a tumble over the past few days, and it seems general knowledge to everyone outside of Capitol Hill that this will cause inflationary pressures, and possibly a re-visiting of the “stagflation” of the 1970′s era, where high unemployment and astronomical inlfation crippled the economy.

The recipe for disaster couldn’s be worse, in fact.  the fiscal actions in the 70′s should have been a powerful lesson for all, yet remains unheeded.  Couple that with what many have called “The Great Recession”, and I simply think it will put the economy into an irrevocable downward spiral.

The Rebublicans seem to have a straightforward strategy to get back on course. 

1) Permanently extend the Bush era tax cuts to create stability and certainty;

2) Cut uruly government waste and spending, and “shrink” the beast of government;

3) Cut earmarks and pork-barrel spending initiatives, and the political pandering that goes along with it.

The strategy worked in the Reagan years, and was followed by many years of prosperity.  The world is somewhat more complicated in this age of globalization, with China’s actions in unfairly suppressing their currency to maintain a balance of trade that is only favorable to them.  China’s recent announcement of protectionist actions in halting exports of rare-earth minerals, the notice yesterday that clothing prices (exports from China) are expected to increase by 30%, and the weak-currency initiatives are making them quite the unruly trade partner on which we have now become highly dependent as a nation.

I remain convinced that we Americans are a resilient breed, capable of competing with any country in the world.  The answer isnt through building the largesse of government and expecting them to fix our problems.  Give the power back to the people through lower taxes and the freedom to act without oppressive government regulation.  Let the human spirity once again soar by giving the citizenry the right to succeed, the right to fail, and the right to enjoy the fruits of their labor without giving half of it to the government for wasteful programs, to give “hand-outs” to groups and causes we find objectionable and even reprehensible.  It’s about finding our roots again, and figuring out who we are as a country at large.  What we have become is a marginalized society, fearful of offending any group or person.  We have put aside our common sense and our right to live our lives as we deem fit. 

It happens every time in history where our individuality becomes marginalized, our faith is sidelined, and the legacy we pass on to our children is simply materialism, humanism, and a “live for now” mentality.

In short, I think the Rebublicans have the right recipe, or at least are going through the right motions.  We are soon to witness the results of whether these actions are more form than function, more changing of the laws than changing of the heart.  Only a change of heart and a refocusing on the collective conscience of this country will make us fruitful as a nation again.

In order to file for a complete discharge in chapter 7 bankruptcy, it is necessary to first pass a means test, which determines whether there is a presumption of abuse, or no presumed abuse.

The Means Test simply takes current income, subtracts certain out of pocket actual expenses including tax witholdings, health insurance costs, and term life insurance.

The test then uses certain median cost estimates for housing, food, utilities, automobiles, and other expenses to come up with a hybridized income statement, then compares this to the median family income with your number of dependents in your specific county or metropolitan area.

While the means test is valuable in determining whether you can likely file for protection under chapter 7 of the United States Bankruptcy Code, it’s not the only option available to fix financial issues. Other factors to consider in the solution is duration of the harship (whether it is expected to be long term, short term, or permanent in nature), the severity of the hardship (i.e. was the hardship caused by the main bread-winner’s loss of job or injury, or by a secondary bread winner losing a part time job), the total amount and structure of the debt, and the assets available to potentially repay the debt as is, or under various settlement strategies.

In short, there are many considerations. I find in most cases that after we talk through the issues and get to the heart of the harship, the final strategy becomes a cooperative process with the client. Teaching the basics goes a long way here– If a client is informed and aware through a cooperative process and good communications, they can alert the lawyer to the specifics of certain situations. If the process is simply one-sided, it is never quite as effective.

An effective result is one that takes the financial goals into consideration, while balancing it with the need for the family’s emotional health and well being. This is arrived at through good communications and a full exploration of each client, their family situation, employment situation, and attitudes and desires in the process. A good result becomes self-evident, and the ends are peace of mind and financial stability, so long as the result is in line with the goals at the beginning– said another way, there is peace when we travel the road and get to where we set out to get to in the beginning.

For most American families just struggling to get by these days, the storm of the past two years seems to be never ending. Many Americans are simply fed up– Fed up with big government, fed up with stimulus packages that haven’t seemed to trickle down to the people, and fed up with the spin on the news that takes every little seed of economic news, whether good or bad, and somehow manufactures a stock market rally.

It’s no wonder why many Americans are absolutely disgusted, demoralized, and becoming hopeless as the economic woes drag on. To exemplify the state of the economy and the mindset of the people is the headline in Sunday’s newspaper which highlighted Carolinian’s viewpoints: at least 60 percent of Carolinians in the survey expect the current economic trends, unemployment issues, and the like to drag on for at least five more years. The national trends, with few exceptions, reflect the local view of the economic future.

So what is there to do? It all starts with a good game plan. While every situation is different, it requires some skill to wade through economically troubling times. Furthermore, it requires an overall plan that you and your attorney agree to. This isnt a time to waiver and second-guess. It’s a time to decide upon a strategy and stick to it to maximize your chances of preserving assets and working you and your family out of the storm.

Just as in any storm, charting a course of action and having a steady hand at the helm are essentials to avoid panic, second-guessing, and rash decision making. Take advantage of free consultations and the advice of an attorney skilled in this are to get the best advice available.

Whether the best solution is debt management, settling your debts, chapter 7 or chapter 13 bankrutpcy, determining your risk for levies resulting from a judgment, or taking a wait and see approach, it is imperative that you get good advice and follow it.

Reality Check: There’s no “I” in Bankruptcy
The fact is that filing for Chapter 7 Bankruptcy is less about the person and more about the process. Let me say it a different way- there is no “I” in Chapter 7 Bankruptcy. Here are some examples of opening statements that have no relevance in the realm of personal bankruptcy.
1) “I want to…..”
2) “I think that ….”
3) “I feel that….”
4) “I don’t agree ….”
As a culture, Americans have become accustomed to services or items centered on their personal desires. Easy example? I-pod- the music and media that you want, when you want it, in the size that you prefer with lots of accessories to customize the product even more to each individual’s preferences. In the arena of bankruptcy, your personal opinions, preferences and beliefs have very little relevance or impact on the process at hand. And speaking from experience, clinging to those opinions, preferences and belief systems can escalate your financial troubles from bad to worse. Just because you think that the antique car you inherited from your Uncle Bob is exempt from personal property because it was a gift doesn’t necessarily make it so. Failure to list any asset can result in your petition for bankruptcy protection being rejected by the bankruptcy trustee, expose you to implications of perjury, and waste precious time and money that are hard to come by these days.
Here is another real life example. “I want to file for bankruptcy.” Just because you want to file to have your debts discharged and start over fresh, doesn’t mean that you can. There is a detailed test called the “means test” which will determine if you are eligible to file for bankruptcy. That’s right folks, just like you have to pass a credit check to apply for a mortgage or credit card, you also have to pass the “means test” to be eligible to file for bankruptcy. So regardless of what you think or your friends all tell you, there are certain criteria you must satisfy in order to file for bankruptcy. In many cases, our clients pass the means test and the bankruptcy makes financial sense, so we proceed. In other cases, we have to explore different avenues. With the last round of bankruptcy code overhauls, there are lots of things to consider.
The economy continues to creep along at an alarmingly slow rate, forcing many Americans into financial crisis. My advice to anyone who has given even a passing thought about filing bankruptcy. Get the facts from a licensed attorney or legitimate non-profit agency. Many bankruptcy attorneys offer complimentary consultations, verify the credentials of the firm or attorney with the NC State Bar Association and the Better Business Bureau, then take advantage of this opportunity to find out if bankruptcy is a viable option for your personal situation. DO NOT employ any debt settlement firms until you get advice. There has been more fraud than it’s worth in dealing with out of state debt settlement companies that promise the moon and the stars.
Sometimes in life, there are policies and processes bigger than us. Unfortunately, bankruptcy is one of them and legal guidance will significantly increase the likelihood of successfully navigating through the process. Make sure you get advice from a licensed attorney on whether you can file, whether you should file, or whether there are better options out there based on your own unique set of circumstances. A well-rounded professional may have some fresh ideas and good insight. Resolving the financial woes you are facing is a cooperative process. Fully disclose everything to your attorney. Participate and listen to the recommendations, and don’t commit anything to your creditors until you have a roadmap in place—then simply stick to the strategy.

Just one letter can mask the truth as evidenced in the title of this article. Home Loan Modification has really turned out to be “modi-fiction”, a manufactured term that has very little basis in truth. If you take the “n” out of declining unemployment and substitute “mb” you will have the truth; unemployment is climbing and growing even as you read this article. Regardless of how many presidential press conferences (aka Story Time with Obama) are conducted- the facts still remain the same. Americans are unemployed, losing their homes and getting lost in a sea of double speak and confusing policy.
Fact #1- Of all of the Americans that should qualify for home loan modification, only 11% of those individuals actually do receive financial relief in the form of reduction in interest rates or principal. Many Americans get lost in the application and review process which can take up to 9 months. How many individuals in financial crisis have up to 9 months of liquid assets to stay afloat during this wait? God forbid that your employment status should change during the waiting period. If your application doesn’t immediately enter the Twilight Zone, expect to go back to the end of the line and start the process over.
Fact #2- It is extremely difficult to borrow money today, in some cases impossible as certain loan programs have either gone completely into extinction or as so limited that 1 out of 20 million people could qualify for them. Stated income programs previously allowed potential homeowners to simply “state” rather than prove their income with tax returns- this method was most often used by self employed individuals (1099). Of course there was a cost for this act of good faith, typically a higher interest rate. Today, if you are self employed or an independent contractor, you are more likely to grow wings and fly than to qualify to successfully apply for a mortgage. You would have to submit the previous 2 years of tax returns which demonstrate enough “reported” income to qualify for the mortgage.
Fact #3- Refinancing your current mortgage has about the same success rate as trying to win the lottery. Do not be fooled by the stories out there of homeowners refinancing their mortgages and saving themselves thousands of dollars. You probably do not know anyone who has done so and neither do I. Ask the next ten people that cross you path, they won’t be able to name anyone either. The truth is since the housing bubble burst, most homes are worth significantly less than what is owed on then. Plus the banks will no longer lend 100% of appraised value, so unless you have 50% or more cash equity in your home, refinancing is not an option. Save the $399 application/ appraisal fee that the lender charges before telling you that they cannot refinance your home. I can personally name 6 people off the top of my head who have wasted the $399- you probably can as well.
Fact #4- Unemployment figures for the last 6 months have been watered down and misrepresented due to the massive wave of hiring for the US Census. This temporary assignment will end soon and thousands of Americans will re-enter the ranks of unemployment, driving the figures back up. If there are 6 degrees of separation between you and any given person in America, and neither of us nor the people we know can think of a single business that is hiring, then logically we can conclude that there is not a big wave of hiring happening anytime soon.
Now that you have removed the rose colored glasses and taken a good hard look at reality, it is time to take action. Do not bury your head in the sand and hope that things will get better or take a swim down the river of denial and pretend that everything is fine. If you are in financial crisis or facing mounting credit card debt, everything is not fine and your situation can go from bad to worse quickly if you ignore it. The only way your financial situation will get better is if you take action and get help. Seek out a licensed bankruptcy/ debt settlement attorney or a legitimate non-profit agency to help you get back on the path to financial wellness and stability.