The North Carolina Bankruptcy Information Blog

You’ve read the headlines. You’ve heard the network commentators. Despite the reported recent economic recovery, post-recessionary American is marked by a new, and troubling, era of economic inequality.

One of the major reasons for the widening gaps between rich and poor is that minimum wage remains at $7.25, the same rate as it was in 2009, despite dramatic rises in the cost of living.

As a result, those in the lowest income brackets face higher bills while the wage floor remains where it was years ago, leaving millions of Americans squeezed under it. But these facts aren’t lost on the experts—from financial insiders to those most financially impacted.…

The best holiday gift may have been a private sector hiring surge in December 2011, as employers gifted the American job market with 325,000 new workers. At the same time as a the rise in public sector jobs, claims for unemployment benefits fell, raising high hopes that recent labor market woes are over and a new year may mark a new era in employment optimism.

According to a report from Reuters, the surge cam as a shock to those following the job marker trends, which to date had been less than stellar. “The ADP National Employment Report’s December job tally surprised economists who had expected a 178,000 gain.…

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.…

A couple of months ago we reported that North Carolina one of ten states with the largest employment gaps. That meant that as of this summer, the state of North Carolina would have needed to generate nearly 500,00 additional jobs in order to keep up with growing population numbers and old and new workers flooding the Tar Heel market in future months and years.

With these disturbing jobless figures in mind, it should therefore come as double-dose of economic reality that the Tar Heel State now also ranks among another not-so-distinguished list: One of the 10 states where the most unemployed could lose benefits.…

Or, at least that’s what older workers believe.

According to a new survey from AARP, older workers say economy worse than last year. Nearly two thirds of workers in the 50+ age group first surveyed by AARP’s Public Policy Institute in 2010 said things had gotten worse by the time the senior lobbying powerhouse followed up in August. Fewer than one in 10 said their view of the economy had improved. The remainder felt like things were close to the same.

According to The Huffington Post’s Arthur Delaney, “Of the more than 5,000 people surveyed last year, 16.7 percent said they were jobless.…

With news this month that almost 40 percent of Americans belive unemployment is the biggest issue facing the country—a figure that leapt from 29 percent between August and September 2011—it’s clear that folks are beginning to believe that joblessness more than “the economy” as a whole is the nation’s most important problem as well as a primary concern for them as part of a larger pool of citizens just struggling to get by in post-recessionary America.

These Gallup polling numbers explain why the Obama Administration’s recent announcement, and submission to Congress, of the American Jobs Act—combining stimulus and tax cuts to spur job growth—is more important than ever to a nation struggling to find a solution to its rampant unemployment and underemployment problems.…

…unions?

That’s right.

Forget federal stimulus or tax cuts for the wealthy or even a new, formal jobs plan. Because according to a new analysis of Census data from the Center for American Progress, a boost in incomes of the union members by just one-tenth, “would increase middle-class incomes by $1,479 per year — even for those who aren’t members.”

In fact, according to the study, the rise in income is higher than if the unemployment rate dropped by four percentage points—a scenario that would increase middle class incomes by only $772 per household.  The Center for American Progress also found that the total share of income going to the middle class is below average in the states with the lowest unionization rates.…

You might think when city officials need to cut personnel costs, they start by letting public employees go.  But according to a new article from The Huffington Post, “firing people isn’t the first thing they look to do: it’s the third.” Ranking the reduction methods, HuffPost evaluates the eight top ways that city officials are dealing with budgetary woes—according to the National League of Cities—including:

(8) Reduce Pension Benefits
A full 18% of cities facing increasingly thin budgets cut back on pension benefits to shore up spending costs in 2011.

(7) Revise Union Contracts
Another 18% trimmed union agreements as a way to cut salaries and reduce previously bargained-for benefits.…

Last week, Charlotte, North Carolina-based Bank of America said it would cut about=a35,000 jobs and reduce annual expenses by $5 billion, as it struggles with costs from its 2008 takeover of Countrywide Financial Corp and a nearly 50 percent drop in share price this year.

The layoffs could have huge ripple effects for the North Carolina economy.

Already dealing with double-digit unemployment in July 2011 (10.1 percent) due to over 100,000 state government layoffs, the state’s impending loss of additional jobs for thousands in the languishing local private financial industry could mean the slow-to-recover North Carolina economy could get much worse before it gets better.…

President Barack Obama, who submitted his American Jobs Act to Congress earlier this week—including bills that aim to use a combination of spending and tax cuts to spur job growth—seems to be on the pulse of a larger political issue.

Though the unemployment rate has been high for months, it’s never been more clear that joblessness is the primary concern for nearly a majority of average American voters.

According to a Gallup poll released Thursday, almost 40 percent of Americans said in September that unemployment or joblessness is the biggest issue facing the country. This figure lept up from 29 percent figure in August.…

When President Obama released his eagerly anticipated $45 billion jobs plan last week, many economists were quick to criticize the efficacy of the strategy’s payroll tax cuts.

But many small business owners across the country are praising the plan, saying that these exact incentives would allow them to immediately hire a number of workers they’ve been needing for months, if not years, but formerly had no way of subsidizing.

This news comes as small business is facing a far from booming economic environment, amid ongoing debates about the debt ceiling which have stymied any stimulus from Congress, consumer confidence plunges and many projects drying up in all sectors.…

U.S. Credit Downgrade Ramps Up Fears of Another Recession

Standard and Poor’s recent downgrade of U.S. government debt is capturing headlines across the country and around the world. And with the major agency’s actions to cut the United States government’s top credit rating, financial experts and commentators are finding themselves increasingly concerned that the American economy is headed back into another economic downturn.

According to a new repot from The Huffington Post, “The announcement that the rating agency had reduced the U.S. government’s AAA rating for the first time in history came after days of punishing declines in the stock market, and has now cast a shadow over economic prospects in the months ahead.…

Local Businessman Files for Chapter 11 Bankruptcy (And You Can Too)

A North Carolina businessman recently filed sought the safe havens of a Chapter 11 bankruptcy after being hit with two civil complaints in the past year, based on a recent story by the Johnston County’s The Herald. According to the paper, “The Dueas filed for bankruptcy protection on April 29 – about two weeks after a Smithfield cardiologist sued Jody Duea. Dr. Frank Wefald, owner of Millenia Cardiovascular, leases office space in Neuse River Commons. According to the doctor’s civil complaint, Jody Duea managed Millenia’s finances and Wefald’s personal accounts as Wefald’s office manager from February 2009 to September 2010.…

Just released unemployment numbers in North Carolina are showing some promising signs of post-recessionary economic improvement. Unemployment officially dropped in 93 of 100 North Carolina counties from last month’s figures.The state’s adjusted unemployment rate is at 10.1%, with 36 counties at that level and the number of workers who found jobs in February up by16,500.

But another new report reveals that these new and improved numbers touting a rebounding labor market may be a bit premature: unemployment rates may be dropping, but not necessarily for the right reasons.

According to Bloomberg, “About half of the fall in the jobless rate during the last four months was caused by Americans who gave up looking for work and left the labor force — a development that he said isn’t something to welcome….…

Tens of thousands of jobless North Carolinians are wondering when the stalemate will end between a Republican-led state legislature and the Democratic governor—both wanting to pass a state budget, but with little to agree on other than that.

According to a new article from Arthur Delaney, entitled “North Carolina Unemployment Standoff Drags Endlessly,” a reporter who has been watching the now more-than-a month-long budget boondoggle play out in front of both local and national media outlets, the disagreements between the legislative and executive branches is unchanged this week despite attempts at concessions on both sides.

“North Carolina Gov. Bev Perdue (D) does not like the latest attempt by Republicans in the General Assembly to link unemployment benefits and budget cuts, which is bad news for the tens of thousands of jobless North Carolinians who want their benefits back.…

If you’re one of the hundreds of thousands of Americans working for state and local governments or other agencies, you may be one of the many wondering why so many so-called “financial experts” are saying the economic recovery is all around us. For you, it likely feels like the same old lingering economic malaise—especially as news emerges that your job may be on the chopping block in 2011, with even more cuts slated for 2012.

In fact, according to a new report from Reuters, times may get tougher on the state and local level before they get better as even larger government layoffs are expected next year.…

For those of you who live in North Carolina, does this story sound familiar?

Charlotte’s John Allison, 37, told HuffPost the [political] stalemate [over jobless benefits] reminds him of a game of chicken, except “the person controlling the car’s not even in it.” “It’s a remote control game of chicken and I’m tied in the seat,” he said. Allison said he lost his job as a landscaping consultant in July 2009 and has been surviving thanks to $281 a week in unemployment insurance. The checks stopped after April 16, when the federal Extended Benefits program expired in the state. Lawmakers had failed to change an eligibility trigger that activates extended benefits only if the jobless rate has risen in the past two years.…

As we’ve been reporting, thousands of North Carolinians were on course to lose their unemployment benefits as North Carolina lawmakers failed to revise the calculations used to determine when these payouts from the Extended Benefits program could be distributed. These same benefits were then placed in limbo when the Governor vetoed a bill in which Republican legislators in the North Carolina General Assembly attached budget cuts to the state’s eligibility for these federal benefits.

Because of this partisan tug-of-war between GOP lawmakers and Democratic Gov. Beverly Perdue, compensation payments have been cut off for about 37,000 jobless North Carolinians for more than a week.…

As we reported just last week, 37,000 North Carolinians were on course to lose their unemployment benefits as North Carolina lawmakers failed to revise the calculations used to determine when these payouts from the Extended Benefits program could be distributed.

This week, however, the legislative actions were more purposeful as Republican legislators in the North Carolina General Assembly attached budget cuts to a bill maintaining the state’s eligibility for these federal benefits. In the end, North Carolina Gov. Bev Perdue found these budget cuts too extreme as it meant public employee layoffs, and, as a result, vetoed the very legislation that would have allowed 37,000 laid off workers in the state to receive their final 20 weeks of federal unemployment insurance benefits.…

Apparently the lingering economic malaise has its limits: according to the Federal Bureau of Labor Statistics, the U.S. economy added 216,000 new jobs last month. This good news appears to support recent claims that the labor market recovery, as Bloomberg put it, is finally “gaining traction”.

But according to a new report from The Huffington Post, those who have been lucky enough to find work, any work, are also often finding their former standard of living to be completely out of reach. “While the recovery of the labor market and the broader U.S. economy depend critically on job growth, equally important is the quality of those jobs.…