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Miami Bankruptcy Law Blog

Understanding Chapter 13 discharges

Debtors in Florida might be interested in learning more about the rules governing discharges in Chapter 13 bankruptcy. Once the repayments are completed, debtors may be able to receive a discharge as long as all obligations for domestic support have been fulfilled. In order to qualify, debtors must not have been awarded a discharge in another case within the past two years. The time restriction is extended to four years when a debtor already received a previous discharge from a Chapter 12, Chapter 11 or Chapter 7 bankruptcy case.

The discharge may not be approved until after the court establishes that there is no pending litigation or proceeding that could interfere with the homestead exemption granted to the debtor. Limited exceptions notwithstanding, the discharge is designed to absolve qualified debtors of their existing debts. Applicants are also required to participate in a financial management course that is approved by bankruptcy court.

Collections agencies sued in federal court for fraud

Florida residents may be interested in learning that a federal lawsuit against a group of collection agencies. The claim, which was filed in a Georgia federal court in March and unsealed on April 8, alleges the agencies are trying to defraud consumers through the use of intimidating robocalls.

The lawsuit, which was filed by the Consumer Financial Protection Bureau, accuses the collectors of making threatening and harassing phone calls to consumers in an attempt to collect "phantom" debts, which are bills that may not exist or may be older than the applicable statute of limitations. The collection companies reportedly refuse to identify the issuer of the alleged debt and threaten consumers with arrest and wage garnishment if the debt is not paid. CFPB claims that the scheme has brought in millions of dollars in payments to the companies involved.

Private student loans may be discharged in bankruptcy

A large portion of consumer debt today comes from mountains of student loan debt that was accrued in pursuit of higher education. A common misconception is that bankruptcy fails to wipe out private student loans, but this is not necessarily true.

Under the rules of Chapter 7, discharging private student loans may indeed be possible under certain circumstances. Additionally, private student loans cannot be legally collected if they expire after the statute of limitations runs its course. For residents of some states, this can be as few as three years. Other states allow collections and garnishments for up to 15 years.

Bankruptcy might give you freedom that payday loans can't

In our last blog post, we discussed how falling into the cycle of payday loans can lead to financial devastation. Sadly, some people might feel the pressure of creditors in such a way that they feel they have no other options available. In some cases, people are spending so much money paying bills that they end up taking out a payday loan so they can buy groceries.

In these tough economic times, people have to do what they feel necessary to live. Paying off credit cards and keeping up with the mortgage might be weighing heavily on your mind. When those thoughts become all consuming, you might decide that you need to take control of your finances again. One option you have when you are ready for a fresh start is to file for bankruptcy.

Beware of the cycle of debt from payday loans

It's no secret that the owners of payday loan companies reap huge profits off the backs of their low-income customers. Poorer neighborhoods in and around the Miami area are dotted with them, block after block.

While it can be a good thing to have somewhere to turn in an emergency where they don't scrutinize your credit rating with a microscope, these loans are another form of indebtedness for those forced to turn to them. Interest rates can rise into the triple digits, leaving consumers caught up in a cycle of debt and usury.

Bankruptcy: It might help to protect your assets

For some people, the prospect of filing for bankruptcy is met with fear and concern. Many people might not understand that if it is used properly, bankruptcy can help to give you peace of mind while helping you to regain control of your finances. Chapter 13 bankruptcy is the type of personal bankruptcy that allows you to rework your credit-related bills in a way that you can afford.

We can help you to learn how Chapter 13 bankruptcy can help you. One way that it can help you is by allowing you to keep some of you assets so that you aren't having to start completely over just because you got into a bit of hot water with your finances. You might be able to keep a car or your home as long as you can pay for them.

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.

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