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Miami Bankruptcy Law Blog

Reducing credit card debt

A growing problem in America today is the trend toward assuming more credit and a reduction in household savings. Numerous factors contribute to why people find themselves carrying more credit card debt than they can manage. Typically, changes in financial resources are the principle culprit to unwieldy credit payments. Losing your job or suffering a personal injury and maintaining daily expenses can often mean that credit can be a ready resource to paying bills. Unfortunately, this practice of bridging the financial gap between jobs or during periods of illness is not a viable way to achieve financial relief.  

Suffering under the burden of staggering credit card debt can be a crushing experience that can leave you hopelessly weighed down under the financial burden of major monthly payments; however, Chapter 13 bankruptcy might be a viable solution that can stop creditor harassment, prevent financial actions such as foreclosure and offer a fresh financial start. Renegotiating unsecured credit card debt through the filing of Chapter 13 can lead to more manageable payments reduce economic challenges. 

Develop a plan that guards against home foreclosure

The family home is the greatest asset that you will own when it comes to economic security and emotional commitment.  You strive to provide a safe and happy place to raise your children and build memories that will last a lifetime. Unfortunately, your financial situation can change overnight, and the significant monetary cost of servicing mortgage debt can be overwhelming. The realization that you may lose your home to foreclosure can be devastating. The process of mortgaged property repossession is a tool that your lender can use to seize your house to recoup the outstanding debt owed on the property if you are unable to maintain predetermined repayment.

The stress of possibly losing your family home is devastating. You have undoubtedly taken steps to guard against such a catastrophic upheaval; however, there are times when even the best plans can fail to work out. It is vital to realize that lenders can only foreclose on your home after following certain steps and the process is quite involved.

Know your rights and options to stop creditor harassment

A growing industry in America today seems to be debt recovery and no wonder with the current economic climate and the ever growing trend towards cheap credit. While interest rates remain at record lows and access to credit increases, a significant number of American households find themselves in a tight financial position. A sudden change in employment, a prolonged injury or sickness might be enough to push many into a credit crisis that could threaten home foreclosure, loss of property and more.

As a preamble to financial actions, creditors will invariably begin to contact you to arrange payments on overdue amounts. At times, they will hire third party firms to call your home, business or place of work; however, some collection agencies can be overly zealous in their pursuit, and it can begin to feel like harassment. An already stressful financial reality can be increasingly overwhelming when bill collectors start overstepping what you feel is reasonable. Contacting associates and friends or repeatedly calling to attempt to make you pay is not an unheard of practice but is by no means acceptable.

Bankruptcy exemptions let you free yourself from debit

With the ready availability of credit at historically low rates, more and more people are assuming ever increasing amounts of debt. Unfortunately, carrying large debt loads can leave you vulnerable if there is a change in your current financial situation. A sudden loss of employment, an injury or illness can make it difficult to pay your creditors. While the stresses of juggling credit card bills, car and house payments on top of daily expenses can be alleviated with personal bankruptcy protection, knowing your rights and what is exempt from the proceedings is critical.

Within the framework of debt relief legislation, there is an option to make exempt real property such as the family home in which you reside to retain home equity. You might also opt to exclude your car required for work purposes from the bankruptcy. The laws that govern debt protection are not meant to leave you without the means to carry on a productive life but rather to compensate creditors within reasonable means and thus permit homestead exemptions, jewelry, and personal property exclusion.

Dealing with debit collection and harassment tactics

Gone are our parent’s days of saving to purchase big ticket items. With the ready availability of large amounts of credit at historically low-interest rates, everyone can buy what they want, now. We use credit for houses, cars or everyday expenses that let us enjoy a better quality of life. However, access to cheap credit has its costs. While we obtain this debt with the intention of paying it back, our financial profile can quickly change with illness, injury, unemployment and other unexpected events. When unforeseen circumstances happen that adversely affect our ability to repay creditors, we must make stressful decisions.

When excessive debt load outweighs household income, we often have to face actualities such as bankruptcy or foreclosure protection. Creditors are any party to whom money is due, and often these lenders will hire third party companies that take a percentage of any debt collected. Aggressive tactics used by bill collectors that work on behalf of your creditors can exacerbate an already difficult situation.  While it is understandable that lender's want to receive payment, unlawful behavior to collect on your outstanding balance is unacceptable. 

Avoiding foreclosure: 4 essential tips

The thought of losing your home can be a scary proposition. After all, your home is the centerpiece of your family's life, the place you consider your sanctuary from the world. Unfortunately, there are times when life intervenes and making those mortgage payments becomes more and more difficult. Perhaps it was the loss of a job or a sudden illness that put you in this situation. Whatever the reason, know that there is hope.

If you haven't been foreclosed upon yet, here are some things you can do to avoid it:

Can collection agencies do whatever they want?

There was a time not that long ago when creditors had nearly free reign to collect debts. Today, thanks to the The Fair Debt Collection Practices Act (FDCPA), that is thankfully no longer true. The FDCPA places a range of restrictions on debt collections agencies. Those agencies are banking on the fact that you don't know the law or that you won't speak with someone who does.

With that in mind, let's arm you with some information they don't want you to know. For instance, collectors must do the following:

  • Every time they contact you, they must identify themselves and give you the original creditor's name and address.
  • They must let you know that you have a right to contest the debt.
  • They must be able to offer proof that the debt exists.

Dispelling common bankruptcy myths

If you find yourself snowed under with debt, your heart probably sinks every time you hear the phone ring. You probably dread checking the mailbox every day and you live in fear of others finding out what trouble you're in. You might have considered bankruptcy, but you're concerned about how it would look or you're worried you'd have to give up everything.

If that sounds like you, this post will bring you some good news. Forget what you've heard. Here are some of the hard facts about bankruptcy:

Alternatives to foreclosure

The thought of losing the place you have called home for years can make anyone feel stressed and worried. Maybe the bills have gotten out of hand and debts have continued to grow, and as a result, made mortgage payments more and more difficult to make on time. When this happens, it is only a matter of time before foreclosure starts to become a reality and you may start looking for alternatives that will allow you to keep your home and avoid being left homeless.

The following are alternatives to foreclosure:

  • Partial claim. The arrangement of a one-time payment obtained from the FHA- Insurance fund that brings your mortgage current and allows you to make payments.
  • Forbearance. The temporary suspension or reduction of your mortgage payments.
  • Mortgage modification. The refinancing or extension of the mortgage loan terms.

What debts are considered required debts in Chapter 13?

When you have decided that bankruptcy is the best solution to your financial struggles, you may have let out a sigh of relief knowing that your issues with debt will soon be in the past. A lot of people assume that filing bankruptcy, specifically Chapter 13, will save them from all of their debts, but assuming this would be wrong. In fact, when you file for Chapter 13, there are a few debts that are considered required, meaning they must be repaid.

The following debts are considered required debts when filing Chapter 13:

  • Tax liens.
  • Vehicle loan.
  • Child support.
  • Alimony.

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