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Miami Bankruptcy Law Blog

Chapter 13: one answer to skyrocketing credit card debt

There are some indicators that the United States economy has stabilized and is now on the upswing, and one of them is that consumer credit debt levels have risen. While this can have a positive effect on a national scale, it can also be a sign that Americans still haven't learned their lessons regarding indebtedness.

Last year, according to statistics from a CardHub survey, households across the nation had an increased net debt of over $57 billion. They predict that credit card debt will reach $60 billion by year's end, an additional 5 percent hike.

Cease letters might stop debt collector harassment

We have often discussed how to handle debt collectors who think they can harass you. Oftentimes, simply telling the debt collector to stop harassing you isn't enough to stop that harassment. Besides telling a debt collector verbally to stop contacting you, our Florida readers should know about how writing a cease letter might help to stop the harassment. There are several points to consider if you are thinking about doing this.

One point you should know is that the cease letter is only applicable to third-party debt collectors. If a creditor is contacting you about a debt you owe them, the letter doesn't have a legal standing. However, many creditors will honor the cease letter if it is sent.

Privatized debt collection can be a consumer's nightmare

Miami residents who are hounded by collection agencies know how upsetting some of their tactics can be. But when governmental agencies hire private debt collectors to recover what is owed, it can really go from bad to worse.

The consumer protections that keep debt collectors in line and prevent harassment of debtors are seemingly erased by privatization. Suddenly that unpaid traffic ticket that originally cost $75 now costs thousands and can send a debtor to jail if payment isn't rendered.

2 Florida areas make list of highest credit card debt in nation

As many of our Florida readers know, we have often spoken about how credit card debt can lead to bankruptcy if the credit cards aren't properly managed or if a life event changes the borrower's ability to pay. It seems that Americans are once again embracing the willingness of credit card companies and banks to lend them money. The average credit card balance increased in 2014 by 5.9 percent nationally, but the increase in the Miami-Fort Lauderdale area was higher.

Miami-Fort Lauderdale comes in at number 12 on the list of the total credit card debt of metropolitan areas in the country. In December of 2013, the area had over $8.9 billion in credit card debt. That number shot up 8.69 percent by December of 2014 to over $9.7 billion.

Should I use my tax refund to file for Chapter 7 bankruptcy?

When many Miami residents receive their 2014 tax refunds, instead of making extravagant purchases or going on vacation, they will use the cash infusion to file for consumer bankruptcy.

A study done a few years ago by the National Bureau of Economic Research estimated that over 200,000 American households intended to use their annual tax refund to pay for attorneys' fees and costs associated with bankruptcy filings.

An automatic stay can help you stop creditor harassment

Just last week, we discussed some of the actions that are off limits for debt collectors to do. Those actions are illegal and meant to protect consumers from harassment. Some of our Florida readers might be surprised to learn that even though those actions are illegal, some debt collectors still do them. If you find yourself being harassed in an illegal manner by debt collectors, we want you to know that you can take a stand against the debt collector.

Some unscrupulous debt collection agencies assume that you don't know the laws. They assume that you don't know what they are and aren't allowed to do. They try to take advantage of what they think is a consumer's ignorance of the laws they have to follow. They might call early in the morning or late at night, but if you know they aren't supposed to, you can try to put a stop to it.

Are my creditors breaking the law by harassing me?

When Florida consumers are being bombarded by creditors all demanding money for overdue debts, it can become overwhelming. But are the creditors adhering to federal and state laws in their collection practices, or have they crossed a legal line?

Consumers are protected by the provisions of the Fair Debt Collection Act, which specifically prohibits the following debt collection tactics:

Foreclosure alert: Zombies are loose in Florida

We have often discussed how foreclosures are affecting some families in Florida. While some people opt to fight that foreclosure, others decide that it is best to simply move on. Those people move out of the home that is being foreclosed upon. In some cases, those homes begin to become an eyesore. Those abandoned homes are considered zombie foreclosures.

The sad fact of the matter is that some of these zombie foreclosures become ground zero for criminal activity. Those homes, as well as others that have been abandoned, become a liability to the cities because public resources are often drained to protect the residents of the neighborhood from activities that are based in those surrendered homes.

Look into government programs to help avoid foreclosure

Floridians who are struggling to make their monthly mortgage payments and fear foreclosure can turn to some programs that President Obama initiated. The administrators of most of the below programs for American consumers are the Departments of Housing and Urban Development and the Treasury.

Those homeowners who are out of work might be eligible for the Home Affordable Unemployment Program, which is known as UP. The program will temporarily suspend or reduce your mortgage payments for at least a year while you search for a job.

Struggling with debt? Explore your options for debt relief

As most of our readers know, credit card debt, auto loans and medical bills are what lead many people to file bankruptcy. Before people file for bankruptcy, they often have to deal with the creditors' attempts to collect on the debts. Dealing with those creditors can prove to be very challenging for some people. We don't want any of our Miami neighbors to have to deal with the stress of dealing with creditors.

One thing that our readers should know is that knowledge really is power when you are dealing with creditors. Some creditors employ specific tactics with the assumption that you don't know the laws. Under this assumption, they might think they can intimidate you or harass you. They might try to threaten you. None of those actions are acceptable for debt collection techniques. We don't want you to have to deal with all those phone calls and letters that collections agencies might use to try to collect the debt.

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