Charlotte, NC Bankruptcy Lawyer and Debt Settlement Legal Services

Posts Tagged ‘debt solutions’

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.

WARNING: The Latest Internet Scam is Credit Card Debt Termination.

Too good to be true because it is 100% False.
Consumers be warned- “credit card debt termination” scams are spreading like wildfire right now on the Internet. It usually goes by the name “Credit Card Termination or some variation on that name, and victims are paying thousands of dollars for this bogus service with the false belief that their debt will dissipate and their credit scored will not be damaged. By presenting a phony interpretation of banking and accounting laws, these con artists claim that they can legally terminate all of your credit card debt. They will go as far as hosting phony arbitrations and presenting victims with fake court documents.

This scheme has its roots in the income tax protest movement of the 1970s, where people were claiming that paying taxes was unconstitutional. Among professionals in the collection industry, the “Credit Card Termination” scam is called the “monetary protest movement.” The common theme with these programs is that our banking system prohibits banks from lending out their own money. So how does a credit card bank extend credit then? The protesters claim that the credit card agreement itself becomes a form of money the moment you sign it. Their premise is that the bank “deposits” your agreement as an asset on their books, and then any credit you use is offset as a liability against that asset. The scam promoters claim that all you need to do to wipe out your debt is demand your original “deposit” back from the bank, which will be offset against what you borrowed. THIS IS NOT TRUE or LEGITIMATE!! Just as the IRS shut down the tax protesters, the Attorney General’s Offices are actively prosecuting businesses and individuals for their participation in these fraudulent “debt termination” services.

Individuals in financial crisis may be tempted and lured in by the false promises and bogus testimonials advertised on the web pages of these, only to find themselves in worse trouble and greater debt. As I have advocated in other articles, investigate the credibility of any debt service providers you are considering. Are they licensed attorneys? Do they belong to the Better Business Bureau? Is there a physical office and address you can verify? Though you may feel stressed out, hopeless and think that things could not get any worse- trust me, get involved with one of these bogus “debt termination” scams and things will get a lot worse as your creditors, assuming that you have blithely ignored them, come after you.

In the current economic environment, many people have fallen into debt. As the debts continue to multiply, the ability to pay them becomes virtually impossible. As the reasons and causes of the debt vary from each individual, so do the solutions. It is important to understand that Bankruptcy is NOT a one size fits all solution.

Contrary to popular belief, not everyone is eligible to declare bankruptcy. In October of 2008, the means test established by the 2005 Federal Bankruptcy Reform act was adjusted. This means test compares your income with the median average monthly income in your state to determine whether you are eligible to have your debts discharged in bankruptcy or whether you must participate in a repayment plan and/or file Chapter 13 bankruptcy instead of Chapter 7 bankruptcy. Median income figures were adjusted by the Department of Justice on October 1, 2008, altering the numbers at which you would be considered eligible for discharge of debt. If you have questions about these laws or the impact on your case, consult with an experienced bankruptcy attorney in your state who can provide you with relevant local information and rules.

While bankruptcy should be considered as an option, it should not be recommended immediately as the ONLY option. Without a detailed, personal financial analysis and application of the Federal Bankruptcy Means Test, it is impossible to truly know if the individual even qualifies to file bankruptcy. If a service provider instantly pushes for bankruptcy as the only solution- this should be a red flag to individuals that they may need to get a second opinion.

About the Author: Joseph M. Bochicchio, PLLC. is a licensed Charlotte, NC Bankruptcy Lawyer with nearly 2 decades of experience in finance and law. His Charlotte Debt Settlement Law Firm is committed to providing legal and ethical guidance for North Carolinians facing financial hardship.

Many people find themselves buried in debt; mortgages, credit cards and medical bills that appear to be endless. There are debt solutions to stop the landslide. Common reasons for spiraling debt include job loss, unforeseen emergencies, divorce and overspending. There are three primary options for an individual facing financial hardship and bad debt: debt management, debt settlement and bankruptcy.

Getting back on the right track can appear to be almost impossible, and individuals need to be aware that there are many scams and unethical advertisements for services that actually worsen their situation. To solve your debt problems, you need to understand your options and then seek out legitimate providers of debt settlement or bankruptcy services. In North Carolina, it is illegal for anyone other than a North Carolina licensed attorney or a non-profit organization to offer debt settlement services.

Harassing collection calls and billing notices can create high levels of fear and anxiety, and individuals will impulsively sign on with a pseudo-debt service without any research. High fees and fine print, which states that the fees must be accumulated first before paying $1.00 towards your debt, can make a bad financial situation even worse. Be wary of these illegal service providers- do your homework, ask for references, check that they are licensed to practice law in the State of North Carolina.

Currently, the North Carolina Attorney General is actively prosecuting fraudulent debt service providers and individuals illegally engaged in debt settlement practice.

About the Author: Joseph M. Bochicchio, PLLC. is a licensed Charlotte, NC Bankruptcy Lawyer with nearly 2 decades of experience in finance and law. His Charlotte Debt Settlement Law Firm is committed to providing legal and ethical guidance for North Carolinians facing financial hardship.