The North Carolina Bankruptcy Information Blog

Despite a continuing overseas economic crisis, the U.S. saw a fourth consecutive quarter of economic growth. This good news is tempered by another economic prediction: with stimulus spending on the decline and the economic recovery sputtering, experts are warning of a troubling new pattern—an economic upturn too slow to put Americans back to work and get the nation back in business.

In fact, according to a recent Washington Post article, “growth was below the long-term trend rate at which the U.S. economy expands and is not strong enough to drive down unemployment. And more worrisome, many of the details of the report point to a continued slowdown of expansion this year….…

Are you buying forecasts of an economic recovery? Don’t believe a “Third Depression” is possible? Just ask Nobel Prize winning economist and New York Times columnist Paul Krugman. On the heels of the G-20 meeting in Toronto, where world leaders pledged to cut their country’s deficits in half by 2013, Krugman warned that worldwide austerity will curb the necessary stimulus needed to encourage economies and deter another downturn.

As Krugman wrote, “We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression.…

Everywhere you look it seems there are people affected by Congress’s failure to authorize and extend unemployment benefits to jobless Americans. And everywhere you turn there are reports of politicians accusing laid-off laborers of resting on their laurels and depending on these federal same governmental subsidies instead of following through with their job searches. As a result, millions of unemployed workers might be wondering how to pay their debts as Congress tries to trim the deficit during an election year.

Despite Congress’s current apathy to the plight of the unemployed, voters appear to be feeling much more sympathetic as illustrated by two national polls (ABC News and CBS News) released just this week showing that registered voters believe it to be more important to help the unemployed than to reduce the national debt.…

Following the last several years of the worst economic downturn in recent history, economists, commentators and financial experts have recently been heartened about prospects for economic growth and recovery this year as industries increasingly report better profits and the additions of new jobs.

Yet, as the economy emerges from the doldrums, consumers aren’t the only ones feeling hesitant.

Federal Reserve Chair Ben Bernanke said warned Congress recently that the economic recovery “won’t feel terrific.” That may be because, as The Huffington Post reports, “there’s still a significant risk of America falling into a second recession. According to the Wall Street Journal, the latest round of economic news has raised concerns among the Federal Reserve’s board of governors that the chance of a double-dip recession is increasing.”

The Wall Street Journal echoes this dismal news with more bad news from the Fed on the unemployment front.  “I would be surprised if the national unemployment rate were to fall below 9% before the end of 2010 or below 8% by the end of 2011,” Narayana Kocherlakota, Minneapolis Fed president, said Friday.…

Just when you thought it was safe to call it an economic recovery, the American Bankruptcy Institute (ABI) pointed to a continuing recession with reports last week that personal bankruptcy filings for the month of May 2010 have increased compared with a year ago (May 2009). In this data also reveals figures finding that total bankruptcies dropped slightly in May 2010 versus the previous month of April 2010.

According to the ABI findings, in May 2010, 136,142 personal bankruptcy cases were filed, a nine percent increase from May 2009, when 124,838 cases were filed. May’s total marked a six percent drop from April of this year, when 144,490 cases were filed.…

In these tough economic times, eating healthy doesn’t have to mean eating expensively; in fact, it can often mean the opposite. As any nutritionist worth his or her salt can tell you, eating in often means eating better; and as any economist will tell you, eating out can starve your wallet. Plus, while you’re staying in and choosing healthier supermarket or sustainable options, you can also pick the fit-friendly food choices that will keep you strong, out of the doctor’s office and away from injury and illness that—as many a medical bankruptcy shows—can ultimately break the bank.

So, if getting fit, healthier and slimmer isn’t incentive enough to seek preventative measures like improved diet and exercise, look no further than a nutrient-rich diet that won’t leave you cash-poor with staggering medical bills.…

In a move that, as The New York Times described it, “will affect most American corporations,” the Labor Department has announced its latest mandates for company compliance with plans to end wage violations, increase workplace safety and adhere to equal employment laws.

As The New York Times’ Steve Greenhouse reported, “The effort, aimed in part at reducing the incidence of employers not paying overtime and improperly classifying workers as independent contractors, will require them to document many of their decisions and share that information with their workers and the government. In announcing the department’s intentions on Thursday, Deputy Labor Secretary Seth Harris said his department wanted to foster a culture of compliance among employers to replace what he described as a ‘catch me if you can’ system in which too many companies violated employment laws.”

Within these broader strategies for corporate compliance is the potential for added protections for employees considering the benefits of bankruptcy.…

When you’re deep in debt, it may seem like your creditors are an ever-present part of your life…showing up where and when you least expect them. The calls and letters alone can leave your reeling, and feeling, used and abused.

As we’ve already seen in the first two parts of the four-part series, “Creating a Barrier to Bill Collectors,” unsecured creditors, the ones at the bottom of the financial food chain, are more likely to be the ones contacting you via phone, sending you letters, and generally harassing you for cash, any cash, where and when they can. We’ve already examined how many unsecured debt collecting strategies are simply veiled threats and how to actually use Federal law to stop the harassment altogether; and now it’s time to address the limits of when and where creditors can contact you.…

Could the food industry be the latest bellwether of a better economy and returning consumer confidence? Some industry experts seem to think so.

According to William Neuman’s report in his recent New York Times article, “The Tables Turn,” “Restaurants all over the country are beginning to see signs of a potential recovery after a dismal 2009. Sales at some restaurants have risen in the last few months, and the industry has hired thousands of additional workers.  “There’s no question about this,” said Harry Balzer, chief industry analyst at the NPD Group, a market research firm that tracks sales at 47 restaurant chains with a total of 103,000 outlets.…

While millions of struggling Americans still working hard to find meaningful employment might disagree, economists are heartened about prospects for growth this year as industries increasingly report better profits and add new jobs, though they still expect the recovery to remain slow, a new survey shows.

As The Huffington Post reported this week, 70% of those recently surveyed by The National Association for Business Economics believe real Gross Domestic Product (GDP)—the measure of our country’s overall economic output— will “grow by more than two percent this year, up from 61 percent who said the same in January. Twenty-four percent are predicting real GDP will grow by more than 3 percent in 2010, up from 14 percent earlier this year.…

This time of year, America is officially springing forward with most U.S. citizens trading an hour’s worth of sleep for more evening sunshine to enjoy after work. Yet, Daylight’s Savings Time 2010 means more than additional playtime for you in the daylight hours; it also means it’s primetime for planning a much-needed Spring Break and/or, in many cases, a much-deserved Summer vacation.

If you’ve recently filed for bankruptcy or simply made a New Year’s resolution to overcome your personal credit crunch, you may be wondering how you can possibly enjoy a little rest and relaxation on a vacation without the crutch of credit cards.…

Exacerbated by the recent “Great Recession,” small business owners everywhere are not only facing high employee health care costs and lagging consumer and commercial spending, but also fewer credit options. While loans have always been the lifeblood of the small business, all across our great nation, mom and pop endeavors with even the most solid credit histories face tremendous obstacles in qualifying for much-needed capital.

In a recent McClatchy article entitled “Too small to succeed? Firms still can’t get loans they need,” small businees owners—from California to the Carolinas—share their personal struggles behind the credit crunch.

“Jim Collins, co-owner with his wife Arlene of Quantum Energy Solutions, has been in business in Sacramento, California, since 1974.…

Life after bankruptcy is beautiful thing. Your stress levels go down and you become more confident with money. Now that things are back on track, maybe it is time to take a whole-life approach to changing the way you live. For some, it’s a new, but smaller, home; a more economical car; or a strict monthly budget. For others, re-starting your life may include relocating. Boy, that sounds like a big decision, huh?

So if you have a new financial outlook on life and think it’s time to move, where would you go? Thankfully, our friends at Forbes.com have researched a list of the best cities in America for “getting ahead.” Their research was based primarily on areas that have good job growth and income growth and a relatively affordable cost of living.…

Brent T. White, a law professor at the University of Arizona, has a provocative new study out, “Underwater and Not Walking Away.” He points out that as many as 32 percent of all homeowners are ‘underwater’ on their mortgages – they owe more money than their houses are worth. The media has produced a series of articles decrying homeowners who simply stop paying on these ‘upside down’ mortgages as irresponsible and even obscene. In fact, White notes, less than three percent of people whose primary residences are foreclosed on are people who could have continued to pay their mortgages. There are no discernible difference in foreclosure rates in places where housing prices have dropped steeply.…

If there ever was a sure sign that print advertising is drastically down from where it was only a couple of years ago, other than the slew of newspapers around the country that have either been sold, merged, closed or gone Web only, it’s the bankruptcy filing of R.H. Donnelley, a North Carolina-based publisher of phone directories. You know, the yellow pages. At one time, the single most ubiquitous business marketing channel.

The company originally filed for protection back in May of 2009. At the time, it was big news because of the company’s notoriety as one of the region’s most successful publicly traded companies.…

The biggest bankruptcy since Orange County went through it back in 1994 may be coming to an end soon as the City of Vallejo looks to take steps necessary to move out of bankruptcy soon.

City officials for Vallejo filed for chapter 9 bankruptcy in May of 2008. The city had tried to avoid doing so by convincing the local labor unions to accept some salary concessions as the recession really began to take hold. However, since they refused to do so the city was forced to file for bankruptcy as the recession reduced local government tax revenue.

Another town, Desert Hot Springs, was forced to file for bankruptcy when it was hit with a legal verdict it could not cover.…

It’s been a very rough year for media companies, particularly newspaper publishers. An ongoing decline in advertising revenue, huge debt and a continuing inability to obtain additional credit have threatened the industry at large. It should come as no surprise, then, that a number of newspaper publishers have sought protection from creditors through Chapter 11 bankruptcy filings and have been sorting out their financial affairs under the oversight of U.S. bankruptcy courts.

Tribune Co., home to the Chicago Tribune, has been in Chapter 11 bankruptcy since December 2008. A variety of creditors are fighting for control of Tribune Co., chief among them senior creditors led by JPMorgan Chase, which is challenging a bankruptcy court decision to extend the deadline for Tribune Co.…

Foreclosure is a common precursor to bankruptcy. More often than necessary, it happens before a family really knows where to turn for help.

Worse yet, those who lose their home in foreclosure continue to spiral into debt and end up filing bankruptcy long after it could have been used to help save their home in addition to relieving them from the agony of overwhelming monthly credit card bills and other debts. Fortunately for many citizens of North Carolina, a foreclosure prevention program has become a model for the nation and to date has assisted more than 2,500 of us from having to give back the property we worked so hard to obtain.…

Did you find yourself standing around at the stroke of midnight on New Year’s night, hard pressed to think of something, anything, that, in the current economy, you could resolve to do when all you currently think about is money? Whether you were in Times Square or a tiny gathering, you probably weren’t alone. Millions of Americans facing foreclosure of their homes, looming unemployment, mounting consumer and health care debt, and other tenuous financial situations during this still unfolding financial downturn are also struggling to start anew despite facing insolvency. Well, in addition to shedding those pounds and quitting those unhealthy vices, get ready to start your latest (and greatest) resolution with four steps to get yourself on the road to financial fitness in 2010.…

The American Bankruptcy Institute, relying on data from the National Bankruptcy Research Center, reports that more than 135,000 consumers filed for bankruptcy in October 2009. The industry group estimates that this represents a nearly 9% increase in filings from the previous month. ABI Executive Director Samuel J. Gerdano commented that the increase in consumer bankruptcy filings in October, together with a reported 7 percent increase in business cases, “demonstrates the sustained stress on the U.S. Economy.”

The American Bankruptcy Institute further predicts that by year’s end, total bankruptcy filings will be up 30% over 2008. In fact, as of October, bankruptcy filings were up 22% over the same period in the previous year, with roughly 950,000 filings, as compared to roughly 700,000 in the same period in 2008.…