Charlotte, NC Bankruptcy Lawyer and Debt Settlement Legal Services

Archive for the ‘Debt Manangement’ Category

As the Baby Boomer workforce faces retirement, personal debt will be a problem for many. Baby Boomers have earned the moniker “Sandwich Generation” as they are the first generation to face significant financial obligations for the previous generation as well as the future generation. Medical bills and assisted care for aging parents and skyrocketing education expenses are just a few examples of costs that will force a growing number of Baby Boomers to carry more debt into retirement. This debt will drain further an already underfunded retirement savings and force many Boomers to work longer or accept a lower standard of living.

The recession and weak economy have further hindered Baby Boomers in their quest to retire and enjoy the fruits of their lifetime of labor. 401K account balances have dwindled and have mockingly referred to as “201K’s”. On top of this, Social Security and Medicare will be going through many changes, which may further complicate future plans for Baby Boomers.

While most financial guides advocate the best way to prepare for retirement is to “save more money”, this advice is not particularly helpful or feasible for many Baby Boomers, given the financial realities they face. Neither are the traditional principles of curtailing spending or increasing earnings. 

* Save More – If they could, they would. Baby Boomers are the most driven and successful generation in terms of goal attainment and focus; patronizing, irrelevant advice such as this is both unhelpful as well as irritating.

* Spend Less – This works only on discretionary spending and is not particularly applicable to health insurance, medicine and medical care spending which is significant and ongoing for Baby Boomers caring for aging parents.
* Earn More – With soaring unemployment, organizational downsizing and cost cutting, it is more and more difficult for Baby Boomers to find paycheck which will cover their expenses and financial obligations AND fund retirement.

Most Baby Boomers ascribe to traditional values of honoring financial obligations and payments to their creditors, resulting in a highly stressful juggling act. Adding to the stress of the situation is the self imposed isolation; most Baby Boomers are ashamed to acknowledge, discuss or seek help with their debt.

If you are a Baby Boomer and have nodded in agreement while reading this article, let me ask for a few more moments of your time. There is nothing dishonorable about obtaining advice and assistance to manage financial hardship. If you are the sole supporter of your family, seeking help is the smart and responsible decision rather than suffering alone, letting the stress of the situation wear you down both physically and mentally. Recall airline safety demonstrations- place your own emergency oxygen mask on first before assisting your dependents.

“I feel like I can breathe again”, many of my clients say after learning about the debt relief options available to them. Legitimate debt relief providers, such as licensed attorneys and non-profit organizations, can give the information, guidance and planning individuals in financial crisis need to end the spiral of mounting debt and move towards financial wellness. Baby Boomers, make happiness the main ingredient in the generational “sandwich” of your lives.

These days, you are more likely to see a unicorn than realize any previously held visions of equity in your real estate holdings. Home equity is the market value of a homeowner’s unencumbered interest in their real property—that is, the difference between the home’s fair market value and the outstanding balance of all liens on the property. The property’s equity increases as the debtor makes payments against the mortgage balance, and/or as the property value appreciates. In economics, home equity is sometimes called real property value.
Many homeowners are clinging to the fantasy that “equity” in their home will save them in times of financial hardship and applying for Home Equity Lines of Credit that will never materialize. The reality is that the current market value of the home is most likely less than what the homeowner owes on the home. The worst housing markets include Nevada, Arizona, Florida and California; in Nevada 70% of the homes are underwater with borrowers owing more than the current market value of the home. In Florida, things are not much brighter with 48% of homes “underwater”. One client I spoke with purchased a townhome in Miami for $375,000 in 2007. The current value today? Around $120,000 as the area is teeming with foreclosures and the unit across the street closed last month at $118,000.
CNNMONEY.COM Poll estimates that it will be 2015 before the typical homeowner who is now underwater will have some equity in his home. In the hardest hit housing markets it is projected that the rebound will not occur until the late 2020’s or early 2030’s. In the meantime, it’s time to get real and face the facts. Hand wringing and traveling down memory lane prior to the housing bust will only make a bad situation worse. I cannot stress the importance of the phrase “time is of the essence” for all Americans facing financial hardship. The fact is you can’t change this tough economy just as you can’t rely on a home equity loan to solve your current financial obligations. One of the things you can do is contact a licensed attorney or a legitimate non-profit consumer credit service such as NACA (National Association of Consumer Advocacy) to obtain guidance and advice on how to manage and settle your debt, develop a sound plan for the future and begin moving towards financial wellness.

The government is stepping up as debt collection scams rise. In recent news, Buffalo New York has been home to a number of unlawful debt collection practices, and authorities have arrested at least twelve people. Although the vast majority of collection agencies are legitimate and good for the economy, there have been a rising count of deceptive and illegal practices. Some debt collectors have been caught calling  debtors and saying that they are law enforcement. They have threatened to send debtors to prison, or even take child custody away from them.

A recent civil case imposed a $675,000 penalty on a debt collection business, for illegal and deceptive practices. This includes harassing and lying to consumers, cashing in on post dated checks early, and disclosing their debt to third parties. These tactics came by deceptive claims from agents saying they were lawyers or other figures of authority.

Refusing to let consumers know the address or phone number of the “business”,  these bill collectors even went as far as to contact individuals who did not owe any money at all and attempted to collect from them. Despite claims that it was individual workers acting fraudulently, the Federal Trade Commission went after the business owners and won a case that imposed the biggest penalty ever for debt collection agencies.

To skirt the issue of being a victim to fraudulent collection agencies, it is imperative that you know your rights.  A collection company cannot have you thrown in jail, seize certain assets, or garnish wages in most instances.  They can’t get you fired from your occupation, and cannot make any kind of public disclosures concerning the debt. If you are a victim of these unethical practices, contact a licensed attorney to discuss the rights and privileges afforded to you under the law.

Turn on the TV and chances are you will see a commercial advertising “free, no cost debt relief”, encouraging people to call a 1-800 number or email. Also featured is an illegible cluster of fine print at the bottom or end of the ads. The most recent addition to these commercials is a voice over stating that “this program soon will not be available in your area”. If you are in financial hardship, saw this type of ad and were considering subscribing to the service, walk away.   Actually– run away.

 Here are a few things you may not know.

1)      Just because a website has .org behind it does not mean it is a legitimate non-profit.

2)      If the organization is not located in NC, they cannot legally provide debt settlement services. Only licensed NC Attorneys and non-profit organizations can do so, and for good reason—When considering your options, a well versed professional is capable of discerning an appropriate strategy given both legal and financial considerations.   

3)      The NC Attorney General is actively prosecuting fraudulent debt service providers, including “out of state” law firms.

4)      Many debt service predators require their fee to be satisfied before engaging in any work on your behalf.

5)      Some make their money by gathering and selling your personal information.

For many Americans facing financial hardship, time is of the essence. Wasting time and money with an imposter debt relief firm is a costly error that they cannot afford to make;   It will compound, rather than solve your debt problems.   Many people I encounter share their horror stories where they send thousands dollars to an illegitimate “debt solution” for many months, only to discover that not one penny of debt settled was settled, several uniformed sheriff’s deputies appeared on their  doorstep, and collectors rang the home phone incessantly as a part of the experience.   In this scenario, just a few more months and bankruptcy would have been the foregone conclusion.   The way any legitimate service is offered means having some reasonably early success with settlements and achieving peace in the household.   The goal is to get all of our clients back on the path to financial wellness as soon as possible, and to help the family on the road to recovery.

If you are in need of debt relief or bankruptcy services, verify that they are licensed with the NC State Bar . Check with the Better Business Bureau. Look for a local number and address, not a 800-number and a PO Box.  A little research is well worth it as you will quickly be able to identify the “devil in disguise” and avoid falling prey to his predatory scams.

Creditors Gone Wild:

Having Debt is not a Free Pass for Debt Collectors to Abuse You

Collectors must be careful to abide by the Federal and State procedures that apply due to the fact that people’s financial problems have the capacity to be a sensitive issue. The Federal Trade Commission says that a collector must positively identify the person who owes money before they can announce that the purpose of the call is to collect debt. The bill collector will then issue a statement, sometimes known as a “mini-Miranda” that lets the customer know that they are in fact a debt collector. Collectors also must follow the state laws that say how they must proceed. A lot of companies utilize electronic systems now to help bill collectors remember all of the laws and regulations regarding each call.

No matter what organization that they employed by, the goals of bill collectors are the same. First, they’re called upon to locate businesses or people that are in debt, and let them know that they are late. Typically this will be over the phone, but sometimes they mail out letters. When debtors (people in debt) move without leaving a forwarding address, bill collectors might check with telephone companies, the post office, credit bureaus and former neighbors to get the new address. This practice is called “skip tracing.” They’ll use computer systems to automatically track when people or companies change their addresses or contact information on any of their open accounts.

The information above explains the process and tools that collectors implement, what is unknown to many Americans is that often debt collectors are on a commission basis, meaning they do not get paid until the debt is paid. This payment structure can lead some debt collectors to engage in abusive and unethical practices in attempts to get the debtor to “pay up”. Examples include leaving messages with a third party at the debtor’s workplace, threatening calls with foul language or a barrage of calls at all hours intended to harass the individual into paying that particular debt collector first.

Americans with debt and financial hardship are typically already suffering from stress, unfavorable credit scores, pay cuts, layoffs and other aspects of this declining economy. While credit collectors are performing a contracted service, they do not have the right to engage in abusive practices and harassment. Violation of the Fair Debt Collect Practices Act is a reason to take a collector to court. In 2009 there were over 8000 consumer lawsuits filed against collection companies, that number is expected to grow in 2010. Know your rights and do not fall victim to the scare tactics of collection agencies. Seeking counsel and direction from a licensed attorney can accomplish 2 things: identify the most favorable debt resolution strategy for your personal situation as well as protecting your privacy and rights.