The North Carolina Bankruptcy Information Blog

We talk a lot about the dangers of using credit cards, the nation’s plastic pariah that contributes to many living beyond their means, causes people to pay incredibly high interest, and in more cases than we care to share, leads a lot of folks to file for bankruptcy.

And so for the many thousands of you who were hoping to pay off credit cards quickly and easily as your New Year’s resolution, we have some bad news.

Credit is getting easier to get and interest rates are getting even higher in 2012.

According to the consumer information site CreditCards.com, credit card interest rates climbed to record highs last month, reaching an average of 15.22 percent.…

Since the real estate reckoning of 2007 launched what would become a global economic meltdown, average Americans just like you have been taking advantage of the sure-fire safe havens of personal bankruptcy. But part of successfully joining the more than 1.5 million people who will file in 2011, is planning for life following the fruition of that bankruptcy.

In fact, with so many people facing income deficiencies due to underemployment or unemployment in 2011, it’s work revisiting the best advice for an effective bankruptcy. Here’s part one of a two-part series exploring the TOP TEN tips for making a 2011 bankruptcy work for you:

(1) Talking Through Your Bankruptcy Tale.…

Need signs that credit card companies are getting more aggressive with their credit card tactics and tricks? Well, there’s 346 million reasons from one particular credit card purveyor, Citigroup.

Based on a new report from The Wall Street Journal, in the third quarter alone, the bank mailed more than 346 million credit card offers to unwitting customers. Keep in mind, that’s more than the approximately 308 million people in the U.S, according to the Census Bureau.

Despite this high volume of consumer credit offers, according to the financial experts at Bloomberg, revolving credit usage, which includes credit cards, dropped the most in six months in July.…

When you’re drowning in debt, and dodging your creditors, you may feel stuck—forced to eliminate your financial trappings as soon as possible and by any means necessary. But, in the process of dispensing with debt through the benefits of bankruptcy, it’s vital that you deal with that debt deliberately and follow certain rules pre-filing in order to assure that your financial future is as fruitful as possible.

Remember, making poor decisions before bankruptcy may prevent you from getting debt relief. As such, it’s always best to avoid the following pre-bankruptcy:

Transferring assets to someone else.
When you’re filing for bankruptcy, you may feel inclined to transfer assets, either to make yourself look like a better (more desperate) candidate with fewer assets or to try to hold onto property that might otherwise be placed in what’s called the “bankruptcy estate.” The short answer is: don’t.…

We know what you’re thinking.

Another stressful tax season has officially come and gone, and you’re either expecting a well-deserved refund or you owe an obligatory amount to the Internal Revenue Service.

Regardless, we understand you’d rather not think about (or, at least read about) anything regarding taxes, tax time, or the financial implications of this taxing period. But, trust us, it’s worth taking a gander at the following, as the end of tax season means the beginning of many a tax scam that might cost you more money (and time) than any IRS tab.

The Internal Revenue Service has now issued a statement warning average Americans just like you about how to spot and solve identity theft issues that stem from your recent tax filing.…

In the mafia, there’s always a “fixer:” someone in the organization who will do the dirty work, get things done, and do so without any hesitation at all. And while the “fixer” is good at what he does, he has a tendency to be an unseemly character, whose unscrupulous tactics leave a lot to be desired.

This is a good parallel to remember when people promise you quick “fixes” to your poor credit score. Unfortunately, it’s a practice that happens often out in the world—especially in these tough financial times, when credit is expensive and loans aren’t easy to come by, especially for those with a poor credit history.…

In the last century, it was not uncommon to hear of average Americans, understandably wary of a then-fledgling banking industry, hiding personal fortunes under household mattresses instead of placing them in various accounts.  And yet while wads of cash are even less common in today’s tough economic times—times when banks coincidentally are mistrusted more than ever—the idea of Americans hording whatever they have for a “rainy day,” is not. Even as incomes continue to fall, personal saving is up, with many families throughout the nation’s now taking a measure of austerity as their personal mantra in throughout this recessionary era.

But what happens when possessing a large sum of cash or savings coincides with filing for a personal bankruptcy?…

In 2010, the Obama administration reworked its $75 billion Home Affordable Modification Program (AKA “HAMP”) in an attempt to better help those hardest hit by the housing crisis: homeowners who were unemployed or underwater in their mortgages (i.e., owing more on their loans than their homes are worth). Within these changes, (1) the unemployed could qualify for up to a six month stay on their mortgage payments;  (2) in turn, participating banks would receive financial incentives to reduce mortgage balances for underwater homeowners; and (3) lenders could refinance mortgage loans secured by the Federal Housing Administration.

More information about HAMP can be found at the Making Home Affordable FAQ section.…

The Supreme Court’s recent holding in the bankruptcy case of Ransom v. FIA Card Services, N.A., means new challenges regarding allowed expenses for Chapter 13 debtors.  In an eight to one opinion, the Court recently affirmed the Ninth Circuit’s ruling that a debtor may not deduct “vehicle ownership” costs when computing his Chapter 13 plan payment if that debtor happens to own his vehicle “free and clear.”

In layman’s terms, this means that a person filing bankruptcy under Chapter 13 cannot reduce his payments to unsecured creditors by claiming “ownership costs” for a car on which he owes no money.  In this case, the petitioner, Jason Ransom, filed for bankruptcy in 2006 and claimed a $471 monthly expense in his Chapter 13 payment plan for automobile ownership costs.…

Ah, tax season: the oft-dreaded time when we’re all forced to assess a previous year’s worth of financial doings, pay back deficiencies and seek deductions. But this year’s tax season may become a bit more taxing for some as industry watchdogs are finding that the Internal Revenue Service is further targeting struggling taxpayers with aggressive tactics meant to retrieve all that is owed from already economy-ravaged Americans.

As the Associated Press reported this month, “the Internal Revenue Service is tormenting struggling taxpayers in the midst of a slumping economy by increasing the number of liens the agency has filed against people who owe back taxes.…

As we’re all now aware, this decade’s economic downturn has dealt, and unfortunately continues to deal, a significant blow to the budgets of many American families, leaving millions in debt, facing foreclosure, and sometimes looking to any means necessary to break even, much less get back on a financially-healthy course. And so, once again, we’re finding that the beginnings of tax season can also yield it’s own set of challenges for some cash-strapped citizens as many turn to plastic to pay back what they owe the IRS.

Unfortunately, with the advent of online filings, paying your taxes with a credit card has never been simpler.…

In every film there’s a protagonist, a conflict, and a resolution. And over the years, famous film directors from Kubrick to Polanksi have painted the Metro Goldwyn Mater film lots with many of these three-part cinematic elements—elements that, in the golden age of filmmaking of the 20^th century, brought in billions for MGM’s coffers.

Cut to the 2000s, and MGM itself became the protagonist in its own conflict to stay solvent as the famous Los Angeles-based film distributor for Rocky and James Bond, which foundered after piling on debt to go private, sought quiet resolution by filing for Chapter 11 bankruptcy.…

In every great relationship, transparency is essential. And a perfect match is often a partner willing to share their past relationships, their financial status as well as what they’re thinking. Similarly, in every fruitful bankruptcy, honesty is key. In fact, it is mandatory. So, if you’re bankruptcy bound, it’s always best to understand early on that, at the outset of your filing, you must act in good faith, revealing all salient points with both your bankruptcy attorney—the person or persons who represent you in your case—as well as your bankruptcy trustee—the person who administrates your case.

This “duty to disclose” can come in several forms and cover some of the most important parts of your bankruptcy process.…

The trigger that forces you to finally take the benefits of bankruptcy can come in many forms: unexpected medical bills; mortgage defaults; the implications of divorce. But, more often than not the culprit can come in the form of out-of-control credit card bills. And with good reason: Chapter 7 bankruptcy can virtually wipe all of those bills away with one, simple filing.

In light of this option, in these economic times, credit card companies are working harder about keeping you debt, targeting unwitting debtors with “convenient” features that make it seem like the card companies, themselves, are helping their customers avoid financial ruin.…

As the economic meltdown lingers, layoffs continue and jobs remain hard to come by, many skilled and experienced Americans are turning to entrepreneurship to make ends meet. But, while it is a good time to take your financial future into your own hands in business, it is also important to understand that self-employed individuals who fall on hard times at any point in the business-building process can also take their financial future into their hands through bankruptcy.

Just like wage-earners, businessmen and women, and the unemployed, bankruptcy can be a smart option for self-employed individuals struggling to stay current in the current recessionary climate.…

This week you may have seen many ghouls and goblins trolling around your neighborhoods, asking for tricks or treats. But, the scariest thing currently happening in your community is an array of potentially unlawful home repossessions from mortgage companies expediting the foreclosure process or refusing mortgage modifications in bad faith. In turn, a whole host of homeowner lawsuits have erupted on the scene, with the vast majority of them revolving around the idea that mortgage companies are deliberately misleading and manipulating homeowners just like you for their own financial benefit.

How can you know if your bank or mortgage lender is acting scary?…

In most discussions of bankruptcy, there are few mentions of the rising costs of motherhood/parenthood, especially considering the current economic state of affairs, whereby families are sometimes forced to choose between clothing, feeding and educating a child and their responsibilities of paying mortgages, car notes and consumer debt.

 As a result, it’s as good a time as any during this especially tough economic era to take a closer look at how mothers, guardians, and caregivers are crunching the numbers when it comes to giving their child the very best, and what that means when, at the same time, that parent is forced to seek the protections of a personal bankruptcy. For example, what might spending for a school expenditures and activities and/or a college education mean when it comes time to file and face bankruptcy’s two basic evaluations?…

While many people consider it common knowledge, the last-minute fear before deciding to file bankruptcy could end up costing you even more come retirement. Turns out, that as the recession deepens, more people are looking toward their long-term savings for an influx of cash to help stay afloat.

Well, don’t ever be one of those people. Typically, what ends up happening is that you wind up without retirement money and still filing bankruptcy. We’ve seen it happen. And it’s hard to watch.

An article on USAToday.com pointed to figures that show a record number of people in the second quarter of this year used their retirement accounts to help stave off a financial problem.…

Baby Boomers and their cohorts born during the middle part of the 20th Century—between the years of 1946-1964—are a generation of active lifestyles, risk-taking rebellions, musical and cultural significance, and, as they come to represent one third of the population of North America, a group making significant demands on the societies in which they live.  But now, Baby Boomers are adding one more superlative to the bunch: they’re also a generation of financial insolvency.

According to a recently-released study from the American Bankruptcy Institute’s ABI Journal, 42 percent of all debtors filing for bankruptcy were between the ages of 45 and 64 in 2007.…

Last year, one million people filed for bankruptcy, with 2010 on tap to top even that staggering figure. So what’s behind the big bankruptcy bump? A continuing housing crisis, higher health care costs, and unemployment hovering the double-digits. As a result, many people who have already filed in the past may be facing another round of tough financial times, and considering a second-time bankruptcy. But what considerations are there for someone considering a double-dip in the bankruptcy pool?

Well, under current bankruptcy rules, certain conditions apply for a second bankruptcy. In North Carolina, as is the case in all other states, you must wait 8 years between filing a Chapter 7 case and filing another Chapter 7 case; you must wait six years between a Chapter 13 and a Chapter 7, four years between a Chapter 7 and a Chapter 13, and two  years between subsequent Chapter 13 filings.…