Charlotte, NC Bankruptcy Lawyer and Debt Settlement Legal Services

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.

Remember when it was encouraged to borrow more and acquire additional credit cards? Consumers were told that having credit card debt was actually a “plus” as the monthly payments they made demonstrated the willingness to pay as well as established a history of responsible, timeliness. Almost everyone was approved for some type of extended credit by which they could indulge themselves with purchases outside of their immediate financial means. When individuals exceeded their credit limits, typically a simple phone call was all that was required to have the issue resolved and the limit increased. Sometimes, the credit card company would automatically increase the limit as a “courtesy” to the client. Other courtesies extended by credit card companies to their card holders included “skip a payment” coupons and special checks to make use of their credit lines with retailers or service suppliers that did not accept credit cards.
Just like the tech bubble and the housing bubble, the unlimited credit bubble has burst. Suddenly, consumers are feeling the pain of getting too close to their credit card limits as well as the burn of owing to Citibank, Chase, Capital One, Bank of America, American Express, etc, etc, etc….. Debt to Income formulas have overrun the credit card landscape and the results for consumers include massive interest rate increases, over the limit fees, jumps in minimum payments, sudden drop in credit limits and drastic dings to their credit score. Here is an example to illustrate what is happening to many Americans.
Meet Jane. Jane has 7 credit cards with balances on all of them. Jane has been making the minimum payments plus extra whenever she can. Jane’s salary is $50,000 a year, plus bonus, yet her credit card companies have extended to her lines of credit totaling $98,000. On a few of the cards Jane is very close to the credit limit. Jane has two credit cards with several thousand available in credit that she keeps as her “emergency” credit cards. Due to the increased cost of living, Jane has used her credit cards more heavily for daily expenses than in past years.
Jane was planning on paying off some of her credit cards when she receives her annual bonus. Unfortunately for Jane, she learns at a town hall meeting that due to the weak economy and drop in production, there will be no annual bonuses as well as no merit or cost of living salary increases for 2010. Jane is disappointed but tries to be positive and is thankful that she still has a job while so many Americans are unemployed.
Then Jane’s car breaks down. After dealing with the ordeal of getting the car towed to the dealership, calling her employer to let them know she will not be in until later, Jane is presented with a large repair bill. She attempts to pay using her “emergency” credit cards only to discover that the credit limits have been decreased. As Jane must have a can to get back to work, she is forced to write a check. This unexpected expense now puts Jane in the situation where she does not have enough cash to pay her mortgage on time this month and cannot make the minimum payments on her credit cards.
Next month, Jane opens her mail to find that the several credit cards have escalated the interest on her cards to 30% and applied several penalty fees, her minimum payments have doubled in some cases. Jane calls customer service to find out why her credit limits were decreased as well as why her interest rates were increased. She is told that her debt to income level is too high. Jane tries her best to make the new minimum payments, cut back on spending and look for a part time job to supplement her income. Due to the increased interest rates, her debt continues to grow faster and faster, her monthly payments make no difference. Jane attempts to refinance her home but is told that her debt is too high and her credit score has been severely impacted by the late payments and level of debt.
Does Jane’s story ring any bells for you? Many Americans are currently walking in Jane’s shoes and frustrated by the new rules and realities. Clearly, this is not a situation that an individual can solve by themselves. If you are facing similar financial hardship due to reduction in income and soaring unsecured debt, seek the guidance of a licensed attorney or legitimate non-profit credit counselor so that you can change your current path and get back on track towards financial wellness.

I consider myself one of the “small people” that the leader of BP condescended to “ care about”. Raised with 6 other children on a teacher’s income, as a boy, I trimmed hedges and mowed lawns to buy tennis shoes. Later on, I worked fulltime, attended business school and law school in the evenings, and repaired everything from cars to dishwashers with whatever I could find in my garage. So from one small person to another, here is my best advice.
Don’t Wait!!
The cost of waiting is too high. There have been over 50,000 payment claims filed and only 26,500 paid. Passively waiting is the kiss of death and can thrust you and your family into financial crisis, spiraling credit card debt and even bankruptcy. Don’t wait for the date to come, start following up ahead of time and keep detailed records of calls, names, dates, etc.. Consult an Expert.
Not a relative or a friend of a neighbor who once knew someone in a similar situation 20 years ago. Seek out a licensed and credentialed resource (see below) that is knowledgeable about the current legislation and changes to direct you & establish a plan of action. Once the plan is in place, follow it. Ask questions when you are unclear and ask for everything in writing.

Below are the websites and contact numbers for the Bar Associations and some suggested guides for Gulf Disaster Victims seeking Legal Assistance.

www.floridabar.org
www.lsba.org
www.msbar.org

Call the Florida Bar toll free
1.866.854.5050
Call the Louisiana Bar toll free
1.800.421.5722
Call the Mississippi Bar
1.601.948.4471

Helpful Guides:

Mass Disaster: A Victim’s Guide
A Consumer Guide to Client Rights
Guide to Find Lawyer

Remember to verify the lawyer’s credentials before agreeing to representation or handing over any payments. Look for address, Bar number, area of expertise & eligibility to practice law in that state.

While watching the ongoing coverage of the BP Oil Spill in the Gulf, Americans residing in areas outside of the Gulf may naively assume that only those individuals residing and working in the affected geographical areas will be financially impacted. Not true. Many American wallets across the country will be pinched and feel the painful costs in the aftermath of the oil spill.
A simple explanation of the Butterfly Effect metaphor; the concept is based in chaos theory and refers to the far reaching “ripple effects” that are created from the changes which occur once a butterfly flaps its wings. This theory is studied at length in both semi-classical and quantum physics. The Butterfly Effect also appears in popular culture, typically in time travel fiction and films such as drama, “The Butterfly Effect”, starring Ashton Kutcher.
Picture a giant green and yellow BP butterfly covered in dollar sign tattoos., flapping its wings furiously. Here is a preliminary list of who will be affected financially from complete to partial loss of income, reduction in spending or use of services, organizational cost cutting and finally increased cost of goods and services. This is by no means a full compilation, more like the tip of the iceberg.

1) Residents of the Gulf employed by fishing industry
2) Residents of the Gulf employed by hospitality and tourism industry
3) Small Businesses Owners in the Gulf such as diners, gas stations, and franchises
4) Residents of the Gulf employed by small businesses
5) Shareholders who rely upon BP stock dividends as part of their annual income.
6) BP employees
7) Vendors & Sub-contractors doing business with BP
Banks doing business with all of the previously listed
9) Insurance Companies, their employees and shareholders
10) Individuals and Businesses faced with higher insurance premiums
11) Individuals and Businesses who purchase gas and seafood products….
Due to spatial constraints, I end the list and trust that the point is made; the damage is not limited by geographical proximity. BP has set up a $20 billion trust for reparations, as of Day 65, over 51,000 lost wage claims were filed but only approximately 26,500 claim payments were actually issued by BP. Therefore, it is safe to assume that the other claimants are in some degree of financial crisis, with escalating credit card dependency and diminishing cash reserves. Chapter 7 or Chapter 13 Bankruptcy may be the only option for some individuals. Remember though, these are the people that are covered by BP’s $20 billion dollar trust fund, what about everyone else?

President Obama Outperforms in Blame Game & Fantasy Fiction During Presidential Address
Like many Americans, I am outraged by the Presidential Address on June 15 from the Oval Office regarding the BP oil spill which in effect was no more than another episode of the Smoke and Mirrors Show starring Mr. Obama.
While millions have been impacted and suffer as a result of BP’s poor handling of the oil spill, now in its 58th day, Mr. Obama had the gall to attempt to fictionalize the very real crisis in the Gulf of Mexico into “Cap & Trade” legislation. Really, Mr. Obama, the millions of people in the Gulf don’t give a flying rip about your ill-timed politicking, posturing and storytelling. What they DO care about is restoring their businesses, the threat to our natural resources this spill continues to cause, and the impact on a major food source for this country and damage to the fisheries, tourism, and all of the related industries that will be impacted by this disaster. Around 10% of this nation’s GDP comes from that Gulf and surrounding areas, which this country simply cannot afford to lose at this juncture. The perfect storm has come upon us: financial meltdown, high unemployment, and now a hit to 10% of the total GDP of this country. This hit can reasonably be calculated to represent a 70% hit to the regional economies in Alabama, Mississippi, Florida, and Louisiana. With a worse than expected 2010 hurricane season, God himself only knows what is to come for residents and businesses in the Gulf, and the ripple effect it will have in an already devastated economy.
Factual Assessment of the Presidential Address:
1. Obama attempts to repackage and camouflage what amounts to a very slow move to action.

2. He is still blaming George Bush for everything negative that happens under his watch. The Bush administration may have been just as culpable as the Clinton and Obama administrations in not better-enforcing safety on deepwater rigs, but Mr. Bush & Co. had nothing at all to do with Obama’s extremely poor and delayed response. You could just see the frustration boiling Bobby Jindal’s blood, as it did the blood of many Americans.

3. Complete lack of leadership and focus in time of crisis. The focus of the President on restitution payments parallels a doctor focusing on pain management options rather than addressing the cancer. Payments don’t mean a hill of beans until that geyser is plugged and the oil contained.

4. Obama equates his election to ascension onto the throne. Believe me; I truly agree BP should have to pay for the damage they have caused. However, the absolute arrogance of “King Obama” to demand payment from BP is a farce; it’s unconstitutional and has no place in a democracy. Furthermore, to have the FEDERAL GOVERNMENT, especially the Obama administration handle a dime of any money scares the living daylights out of me. His cronies will all have their snouts buried in that $20 Billion trough they want to create. The shoving and fighting for a better place in line to the trough is likely to be all the action we will see.

5. The moratorium on offshore drilling, coupled with his argument for green energy. All Americans should be terrified that the leader of our country overlooks the unarguable facts that:
(1) Americans don’t have wings and therefore need gasoline powered vehicles to get to work
(2) WE ARE IN A RECESSION and cannot afford any gas hikes.

6. BP’s agreement to escrow $20 billion is being “spun” by the Obama-biased press. The fact of the matter is that BP agreed to $5 billion per year for four years. It’s a far cry from a $20 billion lump-sum paid up front. In the first year, $5 billion is not likely to pay for all the cleanup and consequential damages to fishermen, fisheries, hotels & tourism, and the other “ripples” that are sure to be felt in the economy. And make no mistake about it: BP was politically “muscled” into this agreement. Obama & Co. have absolutely no constitutional basis whatsoever for requiring BP to pay this money. BP simply complied and did “the right thing”, as they said they would do. The real rub will now come from shareholder lawsuits against BP over this rather large payment and commitment for future payments. After all, BP is liable under law for only $75 million in damages. To think that BP can commit to such a large funding that is above and beyond what is legally due will surely result in a flurry of lawsuits from shareholders to stop the payments. This is where the law meets politics, and the rights of the BP shareholders conflict with the rights of the oil spill victims. We shouldn’t be fooled into thinking this will be a nice little $20 billion dollar package, all tied up in a nice red bow. It’s more like Pandora’s box on steroids.
7. Mr. Obama’s “independent third party” to administer the funds is hardly “independent”. Mr. Feinberg is Mr. Obama’s pay czar. To think that Feinberg & Co. aren’t making a tidy sum, and the democrats aren’t going to try to use the money to leverage votes in this upcoming election season is purely naïve. It wouldn’t surprise me at all to find out a few months from now that the money still hasn’t timely reached those in need in the gulf region. Sounds like a repeat of the bank bailout all over again. If any “small people” actually received benefit from the bailout funds, please let me know. I have yet to find a single law abiding American that benefited in the slightest of ways. I truly hope that this isn’t going to turn into the equivalent of fat bonuses for the Washington insiders, or parlayed into political pork. Mr. Obama’s war cry during his campaign was to have a completely transparent government- Mr. Obama, this is your chance to prove yourself.

For actual facts and real information regarding the effects and current realities of the Gulf Oil Spill, please stay tuned as I will be publishing a special edition of my legal blog dedicated exclusively to the crisis and the ramifications. Final words to Mr. Obama, start showing and stop telling as Americans are tired of your empty rhetoric and stories. The time for results is now.