financial security

What Happens When the Company You Work for Files Bankruptcy?

master — Fri, 23 Jan 2015 15:29:26 +0000

What Happens When the Company You Work for Files Bankruptcy? master Fri, 01/23/2015 - 10:29

You always hear on the news about this or that company filing bankruptcy. Large corporate bankruptcies often make headlines but small to mid-sized businesses can go unnoticed. And although bankruptcy filings are a matter of public record, that doesn't mean the information is easy to find or will be common knowledge. If your company has filed or may file for bankruptcy, this can be a concern for you as an employee. Today we'll take a look at what happens to employees when their employer goes belly up.

Types of business bankruptcy
As with personal bankruptcy, there are two main types. Businesses can file Chapter 7 or Chapter 11. With a Chapter 11, the business is trying to reorganize its debts in order to stay afloat. In a Chapter 7, the business is calling it completely quits and looking to discharge as many debts as possible, sell off their assets and close the doors. If your employer is struggling and files Chapter 11, you may not know it unless the company reveals it to employees or it happens to make the news. With a Chapter 7, your employer is obligated to inform all the employees once they file.

What happens to your wages and other benefits if your employer files Chapter 11?
If your company files Chapter 11, you shouldn't see too much of an upheaval in terms of your wages being paid and your benefits being honored. However, this is a sign that there's trouble and layoffs often accompany this type of bankruptcy filing as companies look for ways to cut costs so they can get caught up on their debts and keep the doors open.
If your company files Chapter 7, you may want to update your resume, begin looking for a job and firm up your network of business contacts. If things continue to deteriorate, you may want to go ahead and look for another job before layoffs spread or the company decides they can't pull through and converts to a Chapter 7 liquidation. Roughly 75% of companies that file for a Chapter 11 will not pull through and will likely end up going out of business.

What happens to your wages and other benefits if your employer files Chapter 7?
If your employer files a Chapter 7 bankruptcy, they are legally required to notify you. This is the beginning of the end and there is little doubt that, if your employer has taken this very serious step, you will lose your job. In addition, if you are owed wages, there is a chance you may not get them. Some companies file Chapter 7 and then don't pay the wages you're owed because they have no money. Legally, employees are top of the list for debts the company must try to pay, so you and your co-workers will be prioritized over other creditors.
However, this doesn't mean that you will see any of that money. Your pension should be safe because there are laws protecting it. Also, if you are let go from your job as a result of your company filing Chapter 7, you will likely qualify for unemployment benefits. As soon as you find out your company has filed Chapter 7, looking for another job immediately is the best way to protect your finances. Many of the North Carolina consumers that come to us to file personal bankruptcy have experienced job loss that left them with a load of debts they can't pay.

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bankruptcy

financial security

Protect Yourself at the ATM – 5 Tips to Keep Your Cash Safe

master — Fri, 07 Nov 2014 14:03:30 +0000

Protect Yourself at the ATM – 5 Tips to Keep Your Cash Safe master Fri, 11/07/2014 - 09:03

We've written recently about a number of data breaches that may have put your financial information at risk. Most noticeably, the Target and Home Depot breaches put tens of millions of consumers' credit card numbers at risk. To minimize consumer risks until the companies had their systems safe once again, it was recommended to spend cash rather than swipe. But using cash necessitates a trip to the bank or ATM and since ATMs are more convenient, they're the likely option. However, increasingly, even ATMs aren't safe.

You may think that as long as you're alone at the ATM, your financial data is safe, but that's not necessarily true. Thieves are now using high-tech tools to steal card information and PIN numbers that you may not even notice unless you're on the lookout. It's important that you are careful every time you use an ATM to make sure prying eyes or prying technology aren't trying to steal your info. Here are five tips to keep your money safe at ATMs.

#1 Protect your PIN – This involves several steps. First is selecting a PIN that can't be easily figured out. This eliminates birth dates, house numbers, social security number, phone numbers, etc. The best bet is to use the random number that your bank assigns to you when they send your card. Although it will be an adjustment to memorize it, it's worth the extra brain power. No one should be able to guess a totally random number. Also, don't write it down and don't tell it to anyone. If you have to have someone run an errand for you that requires a card, you're better off letting them use your credit card rather than your debit card.

#2 Check the ATM – Before you swipe your card at an ATM, check it out to make sure it looks okay. The photo above shows an ATM that has a card skimmer attached. This is a device that records the data on the magnetic strip of your card. Thieves also place either a false key pad (that looks authentic) or a pinhole camera to record your PIN number. With the magnetic data and PIN, scammers can create an identical card and use your PIN with it to drain your account. If you look at the photo, you'll see the scratches around the reader and the fact that it's not made of the same material is a clue. If the ATM looks suspicious, give it a pass.

#3 Be aware when using the ATM – You should also be aware of old fashioned thievery including bystanders peeking to see your PIN, physically taking your card from you or criminals that will lurk and simply steal your cash after you get it from the ATM. Avoid any ATM that isn't properly lit, has anyone shady lurking around it or is in an unsavory location. Also, use your free hand to obscure your PIN as you enter it in case prying eyes are looking or there's a camera trained on your hand movements. If you're in a drive-up ATM, make sure your doors are locked and roll up your window ASAP after you get your cash. You just never know who's looking to steal from you, ATM cash grabs are prevalent and skimmers are growing even more common.

#4 Consider getting cash back – Also realize that there are other options to the ATM for getting cash. Cash back at the grocery store or WalMart is cost-free and may be more secure than finding an ATM. Plus, if you use an out-of-network ATM, you'll pay hefty fees to get your money. Also, swiping your card at the store (most of the time) carries less of a risk than at the ATM. Would-be thieves can't tamper with card readers at cash registers without being noticed and there's no good place for crooks to hide a camera. Most stores will allow you to get at least $50-$100 back. You can also just go into your bank to get cash where there should be no risk at all.

#5 Report card loss/theft immediately – If you ever mislay your ATM card or if it is stolen, report the loss immediately. Here's why. While credit card issuers allow you more leeway in reporting a card lost or stolen and generally won't hold you liable for unauthorized charges, bank-issued ATM and debit cards do not carry such generous provisions. If you report the theft/loss within two business days, your liability won't exceed $50. After two days but before 60 days, you can be liable for up to $500 of illicit charges or withdrawals. Past 60 days, whatever damage is done is your problem. This is nothing to mess around with. If you even suspect that your card may have gone missing, you're better safe than sorry – so report it. Also, check your activity frequently – most banks now offer an app so you can monitor your account and notify the bank if you see any illegitimate ATM or debit activity.

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financial scams

financial security

7 Pieces of Money Advice for Married Couples to Help You Get Ahead

master — Sat, 01 Nov 2014 16:30:51 +0000

7 Pieces of Money Advice for Married Couples to Help You Get Ahead master Sat, 11/01/2014 - 12:30

While marriage is on the decline in some parts of the world, for many it's still the traditional option that they prefer. Matrimony is all about sharing your love, but it's also about sharing your finances. What can be hard to fathom in the first blushes of your romance is that money problems can cause problems so serious that love may not be enough to get you past them. It's important that you both go into your marriage with eyes wide open about each other's financial situation. From there, you can work together to keep your finances healthy and in check so your marriage can be happy as well.

Here are some pieces of money advice for married couples:

#1 Set financial goals together
You likely had goals of your own when you met and married, but are they the same as your partner's? Do you want a house more than anything? Does your significant other want to hold off until you have fewer debts? Both short and long-term financial goals should be discussed, negotiated and then planned for so that each of you can feel you're getting to do what you want to a certain extent. Compromise will be necessary, but that's much better than holding onto individual conflicting goals that split your money matters.

#2 Share costs
If you lived on your own as an adult for a while before you married, you're accustomed to managing your own money, paying your own bills and generally taking care of just yourself. But once you're married, it pays to combine your money for a variety of reasons. We've written before that people that are co-habitating, but not married, should think carefully before combining money. But once you're wed, it may make good sense to. You should share your costs as you're sharing your life.

#3 Pool money for big purchases
Even if you keep your money separate to some extent, pooling it makes sense when it comes to major investments and purchases. Things like a down payment for a house, a car or a vacation are better (and faster) accomplished when both of you are driving toward the same goals together. Pooling money means you'll have more to put down which can get you better terms and will save you both cash in the long run. Take a partnership approach to big stuff not only in deciding

#4 Respect each other's strong points
Different people are good at different things and this holds true for money as well. Some of us are natural-born savers, some have a good head for numbers and budgeting while others just like to spend like there's no tomorrow. Be aware of which of you in the marriage is better at which financial skill and divide up tasks accordingly. If you're the spender, maybe you shouldn't be the one in charge of the debit card. But if your good financial planner is bad at sending out payments on time, that may be a better task for you. Figure out what each of you is best at when it comes to money and respect each other's skills.

#5 Be supportive
One of the biggest side effects of money troubles is stress. This won't do your marriage any favors, especially not on top of financial problems. Money issues are one of the leading causes of divorce, but even if your money is tight it doesn't have to drive you apart. It's easy to play the blame game and point the finger at one another for whatever financial difficulties you're having, but that won't create more money. As long as you're supporting each other, difficult times can actually bring you closer together and strengthen your marriage.

#6 Communicate, even if you separate
If your marriage is falling apart (it happens) whether money is to blame or not, keeping the lines of communication open is important because your finances don't break up quite as easily as a marriage. It's easy to get bitter when things don't work out, but it's best to hold it together until you can get your finances separated. This can mean selling your home, transferring car titles, closing out joint accounts and opening new separate ones and making sure none of your credit cards and bills are left with both your names on it. Once the marriage ends, neatly severing the financial ties is necessary and can be done more easily if you can communicate and stay civil throughout the process.

#7 Do bankruptcy together, even if you separate
For many couples, divorce can also mean money problems. If there are financial issues prior to the split, divorce can often make these worse since you'll be maintaining two households and the extra expenses that go along with this scenario. If both your names are on bills you can't pay and one of you files bankruptcy, the other partner will be left financially culpable. It's better to file bankruptcy together, then file for divorce. This will give both of you the best shot at a clean slate, both emotionally and financially.

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budgeting

financial management

financial security

Bankruptcy and High Income Earners – How Going Broke Can Happen At Any Salary

master — Fri, 31 Oct 2014 16:33:17 +0000

Bankruptcy and High Income Earners – How Going Broke Can Happen At Any Salary master Fri, 10/31/2014 - 12:33

We write here about those struggling with unemployment and low income and, on the other end, about celebrities that go bust. But what about those that are earning a good living but still struggling? In fact, many that come into our offices to file bankruptcy are neither low income earners nor outrageously wealthy but are earning a salary that most would find envious – around $100,000 a year – and still struggling. How does this happen?

Enhanced lifestyle
When you start making good money, it's natural to want to upgrade your lifestyle. This can happen after college when you start to move up in the world or when you make the move to management, find your true calling in life or any other change that amps up your earnings power. It's natural that you want to reward yourself for a job well done and do nice things for your family that has supported you along the way.
If you've been driving an older used car and can suddenly afford a new car payment, it's tempting to take out a loan and buy one. If you never owned a home, a higher salary is the ticket to get a loan and once a realtor finds out how much money you make, they'll show you homes that will max out what loan amount your salary can secure. This is a slippery slope to over-consumption that can get you in trouble if you're debt spending (i.e. taking out loans to buy things).

Lack of savings or safety net
The other thing is that even if you get a major pay bump overnight, that still comes in the form of paychecks over time. Even going from earning $40k to $80k – a doubling in earnings – means going from a take-home pay every two weeks of about $970 after FICA, federal withholdings, insurance and 401(k) to a take-home pay of about $1,610 (or less). Because you pay more in taxes and other expenses, your take home won't double.
If you double your expenses based on the idea that your take-home pay will double, you'll get in trouble quickly. And if you weren't saving and then ramp up your expenses, you won't be able to start saving. This means you have no safety net and higher expenses. It's very common for high earners to have the same amount of savings as lower earners (little to none) and that can cause problems if anything happens.

Life throws you curve balls
If you're living conservatively, below your means and save up some money, you'll have a buffer in case something happens like a bout of unemployment, illness of you or someone in your family or you have unexpected expenses like a major car repair. But know matter how much you're earning, if you're not saving, are running up credit card debt and are living at the limit of your income, any little thing can send you over the edge.
Even going without a job for just a few weeks or a month or two is enough to send people deep into unrecoverable debt. If you're living paycheck to paycheck, it doesn't matter how big the check is if it won't cover all your bills. Many people you wouldn't expect to have turned to personal bankruptcy for help – even doctors, high earning executives and corporate lawyers. While bankruptcy filing have actually dropped for moderate earners, for higher earners, filings have actually increased.
Chapter 7 is open to people of most income levels so long as your debt far outweighs your income and you didn't incur the debt fraudulently. No matter what you're earning, if you can't afford to pay your bills and it doesn't look like your circumstances will reverse, contact the North Carolina bankruptcy professionals at the law offices of John T Orcutt for a free consultation on your financial circumstances.

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financial management

financial security

Debt Collectors Know When You Get Money! Find Out How to Protect Your Cash

master — Thu, 30 Oct 2014 16:20:51 +0000

Debt Collectors Know When You Get Money! Find Out How to Protect Your Cash master Thu, 10/30/2014 - 12:20

If you're behind on your bills, you'll get calls from bill collectors, but if you're unemployed and totally broke, you may notice that other than an occasional letter, you seem to drop off their radar. But as soon as you get a job and have some cash rolling in, your phone starts ringing again, almost like magic. How do debt collectors know you've got money? Simple – they use technology to know when they can likely shake you down for what you owe.

Why debt collectors stop pursuing you
Once a debt collector finds out you're unemployed or are earning such a small amount that they know they can't collect from you, they will essentially put your file into uncollectible status. In addition to having to pay their collectors an hourly wage, collection agencies' bread and butter is getting you to pay up and keeping a cut of it, or if they've bought the debt, they keep all of what they collect after the cost of what they paid. Either way, if they know you have no money to get, they'll give up.

Why debt collectors start pursuing you again
The most successful debt collectors are those that use research and technology tools. One of the best tools at their command is credit report monitoring. Some debt collectors purchase credit monitoring information and as soon as they see your credit score start to improve, they pounce. Your credit score will improve once you get a job and start to pay some bills so, essentially, as soon as you start to try and get yourself right financially, collectors make it even harder for you to do so.

The right way to improve your finances
If you experience a period of unemployment or underemployment, you'll get behind on your bills and may see them pile up. It can get worse and worse until you're completely under water. Once you do get a job and start trying to pay bills, everyone pounces. They often will get very militant once they know you have money. This can mean that even though you're trying to pay your back debts, no one is patient, no one is willing to work with you and everyone wants to be first in line.
In order to try and get you to pay them first, collection firms may get super aggressive. This means they may call you several times a day, may file a lawsuit and may do everything they legally can (and some things they legally shouldn't to harass you into paying them). This isn't fair, but it's a harsh reality that can exist with creditors once they smell blood in the water (i.e. cash in your bank account). This may sound strange, but the best thing to do may be to pay none of them.

How bankruptcy helps
If you start chipping away at your bills and all your creditors play nice, cooperate and let you take care of them as soon as you can, that's great. (It's a miracle, really.) If so, you should go that route so long as you can afford to and won't end up paying a mountain of interest and fees for the debts being outstanding for so long. Also bear in mind that the item will be on your credit for seven years from the date of your last payment and will show negatively for a long, long time dragging your FICO score down.
If your creditors aren't playing nice, filing a Chapter 7 bankruptcy may be a better option. You'll be able to unload your unsecured debt including credit cards, medical bills, old utility bills and other unsecured lingering debt. You may even be able to unload old unpaid taxes as long as the returns were filed on time. This means that you can have a financial fresh start to go along with your new job and can enjoy peace of mind free from lingering debts.

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financial management

financial security

5 Ways to Help Your Family with Money Without Ruining Your Own Finances

master — Wed, 29 Oct 2014 16:20:51 +0000

5 Ways to Help Your Family with Money Without Ruining Your Own Finances master Wed, 10/29/2014 - 12:20

One of the easiest ways to get into financial trouble is to try and bail others out of financial trouble, particularly your family. While it can be easy to turn a blind eye to the money woes of others, this isn't true with those you love. This dynamic is particularly true in two ways. One situation is when seniors help out their adult children that are struggling. The other is when adults are helping their aging parents who don't have the financial resources to pay their medical bills and living expenses. In both situations, helping out is the right thing to do, but there are smart ways to go about lending a hand.

#1 Help But Don't Enable
If you've got adult children that are unemployed or underemployed and you're paying their bills, you may be setting them up for more failure and are also putting your finances at risk. Encourage them to take any job they can get – even if it's not their dream job. Be firm about limiting the amount of support you can offer them and the length of time you can support them. This should light a fire under them. Be very firm and stick to your guns. They need to know they have to rely on themselves.

#2 Don't Support a Lifestyle That Exceeds Yours
This is more common with seniors supporting adult children, but you shouldn't be helping them live better than you are. Examples would be if they are indulging in vices like drinking, smoking, gambling, having premium cable, eating out a lot, putting their kids in private school or going out shopping all the time. If someone is asking you to help out, they first need to drastically slash their expenses and help themselves. You shouldn't be financing this lifestyle. Until they cut back, take a hard line and say no.

#3 Know How Much You Can Afford to Help
Understand that if you ruin your finances trying to bail them out, then you're both going to be in trouble. Look at your budget and see what you can realistically offer without draining your savings account or having to miss paying your own bills. That means that out of your monthly income, fewer expenses, what can you spare? It's okay if you want to cut back to help out, but you shouldn't dig into your savings or retirement accounts. That's a lose-lose for everyone.

#4 Understand That It's a Gift, Not a Loan
Of course, the person that's accepting the money will promise to pay you back - that's the decent thing to do and they will want to pay you back, but it may not ever happen. When money gets tight, bills get paid late and you have to get all those caught up, so it can take a long time before there's any spare money available to pay back. Instead of letting the debt hang over their head and make you resentful, go ahead and call it a gift. It's better that way.

#5 Consider Consolidating Households
If it's feasible, combining the two households will drastically cut expenses and make the hard times easier to survive. It can also reduce child care expenses if there are minors in the mix and allow more caregiving options for seniors. This can be a short or long term solution. If the adult child is struggling financially, this can be a great way to allow them time to regroup, find a better paying job, get bills caught up and save money. If it's the parent struggling, this may be a good permanent arrangement.

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financial management

financial security

How to Keep Your Home in Chapter 7 or Chapter 13 Bankruptcy

master — Tue, 22 Apr 2014 12:16:16 +0000

How to Keep Your Home in Chapter 7 or Chapter 13 Bankruptcy master Tue, 04/22/2014 - 08:16

Many of our clients that come to us are very concerned that if they pursue bankruptcy to get some debt relief that they will automatically lose their home. This is absolutely not the case. What matters is whether or not you're current on your mortgage payments, how much equity you have in your home and what type of bankruptcy you're filing – chapter 7 versus chapter 13. Here's what you need to know about keeping your house while getting debt relief on other liabilities that you owe.

Scenario: Chapter 7 if you're current on mortgage payments

How bankruptcy can help save your home

If you are filing chapter 7 and are current on your mortgage payments, you should be able to keep your home. The main issue in this scenario is the amount of equity you have in your home. If you are a single bankruptcy filer, North Carolina consumers can shield up to $35,000 in equity in your home. If you are filing chapter 7 with your spouse, up to $70,000 in equity can be shielded. This allows most filers to fully protect their residence from being sold to pay their debts.

Scenario: Chapter 7 if you're behind on mortgage payments
If you are considering chapter 7 but are behind on your mortgage payments, the filing can help you in a couple of different ways. First, if you've already received a foreclosure notice, it can temporarily delay you losing your home. This will buy you a few months to try and catch up on your payments, work out a deal with your lender for lower repayments, arrange a short sale or find a new place to live. If you have significant equity in your home, trying to sell it or save it makes sense. But if you are upside down on it and/or have a second mortgage, it maybe wiser to let the home (and all the associated debt) go.

Scenario: Chapter 13 if you're current on mortgage payments
If you are current on your mortgage payments, your home will not be at risk from filing chapter 13. Instead, what it will do is give you more breathing room to catch up on your other bills. However, the exemption rules are still critical. If your equity exceeds the amounts of the North Carolina exemption mentioned above, you will still get to keep your home, but will have to pledge to pay more of your unsecured debts rather than simply having them discharged after your repayment plan. Also, if you're current on your payments, but have negative equity (i.e. owe more than what your home is worth) and have a second mortgage, we may be able to strip away the second so you'll owe less.

Scenario: Chapter 13 if you're behind on mortgage payments
If you are behind on your mortgage and are considering chapter 13, depending on how far you are behind, you may be able to keep your home. If you've received a foreclosure notice, filing will stop the immediate threat of losing your home. From there, what happens is that you'll have to pay your regular mortgage payment plus a portion of your arrears. This is calculated so that at the end of your repayment plan (between three to five years), you'll have caught up your back balance and will be completely current.
If you're considering bankruptcy to get out of debt and want to find out how to keep your home safe, contact a reputable North Carolina bankruptcy attorney like John T Orcutt for a free consultation.

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bankruptcy

financial security

Is Your Bank Charging Illegal Overdraft Fees?

master — Tue, 15 Apr 2014 12:38:52 +0000

Is Your Bank Charging Illegal Overdraft Fees? master Tue, 04/15/2014 - 08:38

Banks scoring big with overdraft protection

Have you ever swiped your debit card for a small purchase only to see on your bank statement that your $4 McDonald's lunch feast caused you a $35 overdraft fee because you really didn't have the money in your account? This and similar situations caused many consumers huge problems in the past and back in 2011, a Federal Reserve rule went into effect and changed this troublesome financial quicksand. But because banks are always looking for the next quick buck, they devised schemes to profit on those who occasionally (or even frequently) run short on cash.

First we'll look at the type of overdraft fees that have been blocked by the Federal Reserve ruling to be sure your bank isn't dealing dirty with you and then we'll look at other bank products that are costing you too much and offering too little while purporting to “protect” you.
Illegal overdraft fees
In the past, debit card swipers without enough dough in their account could be hit for fees of up to $35 per transaction that they didn't have the money for. This covered not only card swiping at retail establishments but also ATM transactions. At $20-$35 a pop, that could get you in over your head quickly. Banks also adopted the policy of processing daily transactions from largest to smallest rather than in chronological order. This descending prioritization allowed them to increase the chance of being able to charge multiple overdraft fees. Wells Fargo was accused of profiteering in this regard and ordered to return more than $200 million of overdraft fees to customers.
Costly overdraft protection
Although the Fed slapped financial institutions for these aggressive profit-seeking tactics, banks were not ready to give up on this huge source of revenue. Instead, they developed a program called “overdraft protection” or some similarly named account option. This is a service you sign up for that permits your bank to continue doing what the Fed said they should not. The key difference is that now they do it with permission. Without overdraft “protection” if you try to use your debit card for an amount that exceeds your balance, your card will be declined. To me, that's fine. I would rather miss out on my morning cappuccino than pay $39 for it (even if I'm a little embarrassed to have my card declined).
How overdraft protection works
If you sign up for overdraft protection, it will cost you anywhere from free to $15 per month typically. But in fact, you'll still end up charged a fee either for each day you have an item that you don't have the funds for or for each transaction. For instance, Wells Fargo offers this service for free, but charges $35 per transaction that overdraws your account. If you have a check that doesn't clear because you don't have protection and it bounces, the business you wrote it to may charge you $25-$50. In this case, if your bank doesn't charge a fee for paying the check, you're ahead of the game. But debit card transactions or auto pays that are refused don't result in a fee from the company that you were paying so there's not much of an upside to allowing your bank to approve these when you lack the funds and charge you an exorbitant fee.
If you're deep in debt, maxed out on your credit cards, behind on your bills and overdrawn at the bank, bankruptcy can be a permanent fix to your debt dilemma. Contact the law offices of John T Orcutt for a free consultation on filing Chapter 7 or Chapter 13 bankruptcy in North Carolina.

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bankruptcy

financial security

7 Steps to Get a Mortgage After Bankruptcy

master — Tue, 15 Apr 2014 12:38:13 +0000

7 Steps to Get a Mortgage After Bankruptcy master Tue, 04/15/2014 - 08:38

If you have filed bankruptcy (or are considering it) and worry that this will mean that you will never be able to qualify for a mortgage again, we can tell you that is absolutely not the case. Even if you surrender your home in bankruptcy because you're facing a foreclosure, you should still be able to purchase a home in the reasonably near future. These are the seven steps to take to get a mortgage after filing chapter 7 or chapter 13:

#1 Know your waiting period
After chapter 7, you will have a two year waiting period before you can get an FHA loan and four years for a conventional loan. For a chapter 13, the waiting period is one year after discharge for FHA and 24 months after discharge for a conventional loan (or 48 months after a dismissal if your repayment doesn't run its course). The only way to circumvent these rules is to work with a private lender – one that finances the home without a bank.
#2 Work on your credit score
The best way to get a good deal on a post-bankruptcy mortgage is to have the best possible credit score. Filing bankruptcy will lower your credit score but this will be partially offset by the fact that accounts that were getting hit by negative ratings each month for non-payment or late payments won't be continuing to degrade your credit report. After a couple of months, getting a secured credit card and keeping the balance low is a good start.
#3 Pay your bills on time
From the moment your bankruptcy gets the green light, you get a fresh start. It's up to you to make the most of it. The first step is making sure you pay all your bills on time, every time. This is a critical step in re-establishing your credit. Also, don't incur more debt than you can manage now that you've gotten yourself in a better financial position. If you ever have to prioritize one bill over another, if possible, pay one that reports to a credit agency.

#4 Gather a down payment
Because you've filed bankruptcy, you will likely not get the best interest rates. One way to counter this is to have a more substantial down-payment. Borrowers should try to have at least a 5% down-payment but the more you can muster, the better. A 10% down-payment is what to shoot for to get better interest rates and to let the lender know you're committed.

#5 Research interest rates
All lenders are not the same. You'll want to consider different lenders from banks to credit unions to those that specialize in mortgages. There are lenders you can meet with in-person and many firms you can check out that are on-line only. Do a lot of research and compare different offers before settling on what you think is your best possible rate.

#6 Compare lenders
In addition to interest rates, consider the reputation of your lender. Most lenders are above-board but there are some that prey on those with less than stellar credit or those who are naïve about the process. These are called “predatory lenders” and often target those in financial hardship and offer them loans when others won't, but at very high rates. If this is the only kind of loan you can get (called subprime) then you should save up more money, work on your credit and wait.

#7 Purchase modestly
One common circumstance we see with our clients is that they purchased the most home they could get a mortgage approved for and then when the real estate market, or their income, dipped they ended up in over their head. This is not the best strategy for your future financial well-being. Instead, buy a home where the payments will be affordable even if you're not earning at your maximum, or, for two earner families, that you can afford if one earner can no longer work.
If your debts are overwhelming and you need permanent relief, you should know that bankruptcy doesn't represent an end but, rather, a fresh start. Contact the law offices of John T Orcutt for a free consultation on how chapter 7 or chapter 13 bankruptcy can help you get out of financial quicksand.

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financial security

Fraud Alert: Beware the Netflix Scam!

master — Mon, 07 Apr 2014 18:16:44 +0000

Fraud Alert: Beware the Netflix Scam! master Mon, 04/07/2014 - 14:16

We have a brand new, highly aggressive scam to warn you about. What's really bad about this one is that it's centered around a service we all know, love and use on a daily basis: Netflix. How it works is that a fake Netflix page opens either when you search for the streaming site or as a pop-up type of window. The page looks like Netflix to a T and even has Netflix in the URL but then has some extra letters before the dot com.

After you try to log in, it takes you to an error page that says “Account Suspended” on the page tab label. There you see an “Important Notice” that says there has been fraudulent activity on your account that has resulted in your account being suspended. They provide an 800 number for you to call to “regain” access to your account. There's also a long error code. This is the start of a highly sophisticated and aggressive phishing scam.
If you call the number, you'll get a scammer that purports to be a Netflix customer service representative. They will then tell you that your account has been hacked by someone outside of the United States and that they can help you upgrade your security and protect your sensitive data. The agent will send you to a URL and have you download a program called Netflix support. First of all, Netflix has no such product and second, it's a malware program that intends to steal your account logins, personal information and other data.
With this information in hand, scammers can commit identity theft and other sorts of fraud. The scammers will also request you to send a photo of your ID and credit card you used to set up the account to “prove your identity.” If you don't know how to do this or hesitate, the scammer may remotely turn on your web camera and ask you to show them just to prove your identity, but they can capture the images from there and then have the ammo they need to cheat you out of your hard-earned money.

After they get your new and improved security software installed, they tell you it's a trial offer, and the fake customer service agent offers you a $50 coupon code to use as a discount on a permanent security license. They thank you for calling Netflix customer service and then ask you to hold the line. They then pass you off to another scammer who says they are from the security software firm. This person turns on a program and shows you what they say is stolen information and they tell you they are recovering your hacked information.
This is a very convincing scam. They tell you about the dangers of what happens when your computer is hacked. They talk about the dangers of people accessing your data – even as they are doing it themselves at that moment. They then tell you the charge for restoring your data and installing the software is $400 or so. They apply your “discount” that you were given and then ask you to show your credit card – they turn on your web cam to see it or ask you to snap a picture of the card and your ID. To see exactly how the scam plays out, watch the video above.
The bottom line is you should always check and make sure the URL of websites you use are typed in correctly and do not use links sent to you in questionable emails or from pop-ups. Fake sites to log in to Amazon and other sites where you use and store credit card information should always be treated with caution. Also be suspect of emails inviting you to click to restore accounts or update information. The sad truth is that it's hard to know who to trust but anytime you get a notice like this latest Netflix scam, you should Google the company name and scam before you take any other action. This can help you protect your secure data and prevent identity theft. If you believe you've been the victim of a scam, contact the Federal Trade Commission or North Carolina Department of Justice.

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financial security