Chapter 7 bankruptcy is an important tool available to indebted individuals across the country, including here in Texas. It allows a person to relinquish their debt, giving them the opportunity to gain a fresh start in life. However, it is not for everyone. In Chapter 7, many of a debtor's assets are liquidated so as to satisfy the claims of creditors. But for someone who is deep in debt, it may well be a breath of fresh air.
]]> That appears to be the case for Suleman. With so few assets and such a huge burden of debt, it may be difficult to devise a repayment plan that would put her on the path toward financial independence. Through Chapter 7, though, she will likely be offered a clean slate.Additionally, Chapter 7 may be able to prevent foreclosure. Suleman and her 14 children are currently residing in a four-bedroom home, for which she has fallen $30,000 behind in payments. A foreclosure auction had been scheduled for the residence, but it has reportedly been postponed.
There are many reasons why a person may find themselves so deeply in debt. While Suleman represents an extreme case, many Texas residents have no doubt shared the experience and pain of her financial distress. For those who are falling behind in their financial obligations, Chapter 7 bankruptcy may well provide them with the opportunity they need to start anew.
Source: Forbes, "Octomom Is Bankrupt, Considering Porn. So What Happens To The Kids?," Meghan Casserly, May 1, 2012
]]>These days, individuals and families facing bankruptcy may have some of those same feelings, especially after hearing that a Chapter 7 bankruptcy proceeding typically costs about $1500. That's because Congress amended the laws through the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act.
]]> In an effort to cut down on bankruptcy filings, Congress raised fees and added additional paperwork and even required credit counseling and debtor education. Those amendments have given rise to the sentiment today that some people are too broke to even afford bankruptcy.To be sure, the filing fee was raised to $300, although it may be waived upon request if the filer is within 150 percent of the poverty income level. Then there's credit counseling, said to cost an average of about $85. Beyond that there are legal fees, pushed necessarily higher because of the additional work involved to comply with the added requirements under the 2005 law.
An interesting trend has developed this year. It appears that more and more taxpayers in Texas and elsewhere are using their state and federal tax refunds to fund their Chapter 7 and related bankruptcy petitions. Statistics show a definite spike in filings around the time that taxpayers typically receive their refunds.
Consumer debt educators offer the advice that those who file for bankruptcy would be best served by being sure that it's done right the first time. That's because improperly filed petitions risk being dismissed by the court for failing to meet requirements. If that happens, it will likely have a negative impact on the filer's credit without the benefit of a release from debts that is possible with a correctly filed petition.
Source: CNN Money, "Too broke to go bankrupt," Blake Ellis, May 7, 2012
]]>While these loans cannot be discharged through personal bankruptcy in many cases, they can many times contribute to a grim financial situation. This harsh financial reality may cause some people to use credit to purchase necessary living supplies, take out personal loans for car repairs, and hope that one day soon they will find gainful employment and be able to do a financial one-eighty. For those that aren't lucky enough to find the employment they need to regain financial footing, personal bankruptcy may be an option for debt, other than student loans.
]]> Since student loan payments often become a large chunk of a person's paycheck, they may not have the money to pay for other living expenses. The constant charging of necessary items may mean a person isn't able to make their monthly payments. Once a financial situation gets out of control, it might be helpful to speak with a personal bankruptcy attorney to see how filing for bankruptcy can help your debt situation.With many people still working to pay off their student loans well into middle-age, asking for financial help isn't something to be ashamed of. Many people are falling into uncontrollable debt because of a poor economy and poor job market.
Source: The Huffington Post, "Student Loans: New Survey Finds College Grads Carry Large Debt Into Middle Age," Tyler Kingkade, May 2, 2012
]]>The attorney general in another state revealed tactics used by a debt collector that included imbedding debt collectors in hospitals, some of which almost seemed like medical staff, and had access to patient information. This is the latest effort by companies trying to collect money, and it may not be an isolated incident.
]]> In no way should a debt collector have access to patient information. If someone owes a medical debt, they shouldn't be bombarded in their hospital room, where they are seeking care for a potentially devastating illness or injury.The attorney general who released her findings also said that at times the people using these tactics didn't identify themselves as debt collectors. This means they could have been collecting information from the patients illegally. While many of these tactics are extreme, it seems that debt collection agencies don't care about how they get the money, just as long as they get it.
These illegal tactics might be working, too. The company that is accused of the bedside debt collecting reported a 130 percent increase in profit last year. It is important that patients seek out help if they are being harassed for debt that they might own. Legal measures can be put in place to try to help deter or stop collectors from harassing people.
Source: The New York Times, "Debt Collector Is Faulted for Tough Tactics in Hospitals," Jessica Silver-Greenberg, April 24, 2012
]]>If a person carries a monthly balance and continues to charge expenses, they may be in for a world of financial issues not too far down the road. The constant charging of items along with the high interest rates could spell financial trouble. Those get into credit card debt in Houston aren't alone, and there are ways out. Getting educated on how your credit cards work is a very important step, but if things get too out of hand to manage, speaking with a bankruptcy attorney might be a wise idea.
]]> With the economic downturn in recent years, it is possible that students and others have been carrying a balance on their cards, hoping their financial situations would improve shortly. They used their credit cards only for emergencies. If the emergency was suddenly being unemployed, credit cards could easily turn from a short-term solution into a long-term solution.Many people think that credit card debt is only their own fault. However, many times people do use their credit cards only for emergencies, but their emergencies turn out to be more costly or more drawn out that they initially thought. People in Houston who find themselves with uncontrollable credit card debt would be wise to act quickly. An experienced bankruptcy attorney can help a person work toward financial stability.
Source: Fox Business, "Survey: Students Fail the Credit Card Test," Martin Merzer, April 16, 2012
]]>While the overall debt numbers increased last month, with consumers spending more on education and car loans, many people are still working frantically to get their credit card debt under control. Sometimes one emergency spending situation is all it takes to cause someone to be in an out of control debt situation.
]]> Consumers should be careful of their spending habits. The data released by the Federal Reserve showed that consumers grew the amount of spending in the United States. Since many people are not making any more money, it is possible that consumers are spending on speculation that economic conditions will continue to improve. This dangerous pattern of spending with hopes of being able to pay off debts later when income improves can be costly in the long run.If someone's debt situation gets out of hand, they may want to speak with a Houston bankruptcy attorney who can help them assess their credit card and other debt and come up with a plan to get out of debt. Depending on each person's individual financial situation, there may be a few options to help recover your personal financial freedom.
Source: The Wall Street Journal, "Consumers Cut Credit-Card Debt, Add to Auto and Student Loans," Jerry Sparshott and Maya Jackson Randall, April 6, 2012
]]>Usually when people file for Chapter 7 bankruptcy, they file to discharge debt. That would allow them to stop the creditor calls and letters demanding payment. However, sometimes creditors break the law and call and harass people anyway. If creditors do this, they may be forced to pay large fines.
]]> Bank of America was recently fined $12,500 in a case in another state after harassing a man whi had filed for bankruptcy and filed a debtor's discharge. Even after he filed, the calls kept coming. He received 38 calls from the bank demanding payment. He kept track of the calls and now the bank has to pay for its illegal actions.Chapter 7 bankruptcy can help people in Houston when their debt becomes unmanageable. Banks are out to collect money and they are not being lenient. Many times people fall into unmanageable debt because of a significant life change that they couldn't avoid, or they were the victim of illegal lending practices by banks.
This problem is widespread. Many people fear they are the only people filing for bankruptcy, but the truth is bankruptcy is helping to seek debt relief for thousands of people across the country. Speaking with an experienced Chapter 7 bankruptcy attorney might be a wise decision if your debt situation has gotten out of control.
Source: The Huffington Post, "BofA Allegedly Called Debtor 38 Times After He Filed For Bankruptcy," March 30, 2012, Alexander Eichler
]]>Students in Houston may be experiencing creditor harassment for their federal loans, like others across the United States, leading them to seek out options for personal bankruptcy. Unfortunately, most student loan debt cannot be discharged in bankruptcy, but other kinds of debt that students may have accumulated might be able to be discharged.
]]> According to a report, there are approximately $67 billion worth of student loans in default. This means people who graduate from college aren't able to find work that allows them to make their student loan payments.With many people being unable to pay back their high student loan debt, the federal government is hiring creditors that are aggressively pressing people to pay back loans that they can't afford. Some people have gone so far in default on their loans that there default amount is their yearly income.
Those who are being harassed to pay back loans might have to default on other payments such as credit card payments or other loans. Sometimes these other loans might be able to be discharged in a Houston personal bankruptcy. Speaking with an experienced bankruptcy attorney can help you determine what route is best for your financial situation and help you through the legal process.
Source: Bloomberg, "Obama Relies on Debt Collectors Profiting From Student Loan Woe," John Hechinger, March 25, 2012
]]>A former NBA star, Antoine Walker, is now being forced to part with his NBA Championship ring, which was recently sold for a reported $21,500. Walker is trying to help eliminate close to $13 million dollars in debt and he has approximately $4 million in assets. While most people don't have such expensive jewelry to sell, people might be asked to part with things that have more than monetary value to them.
]]> Personal bankruptcy can be a way to stop creditor harassment and eliminate debt. Depending on a person's income level and amount of debt, among other variables, there are different types of bankruptcy a person can file.Some bankruptcies will eliminate most debts, while others will provide the person with a structured repayment plan. Most people filing for personal bankruptcy will file for Chapter 7 or Chapter 13. Speaking with an experienced bankruptcy attorney can help a person determine what type of bankruptcy is right for their situation.
Because debt can get out of hand quickly, it is important to try to recognize when debt is becoming unmanageable early on. It out of control debt is detected early, an attorney can work to help minimize the effects that debt or a bankruptcy might have on a person's financial future.
Source: The Huffington Post, "Antoine Walker Sells Miami Heat 2006 NBA Championship Ring For $21,500: Report," March 20, 2012
]]>Just one visit can cost thousands of dollars. Even with insurance, people may still be stuck with a bill they can't afford. According to the Center for Disease Control and Prevention, 20 percent of Americans have medical debt, and half of those people aren't able to pay the debt at all.
]]> This debt can often cause families to panic and start relying on credit cards to pay for other expenses. The use of high interest credit might further add to their debt situation. That's why it's important for families who have an unforeseen medical expense to try to predict the financial implications or seek out help early.For families who are struggling to pay medical debt, it might be wise to speak with a bankruptcy attorney. They can help determine the best way to prevent creditors from getting unmanageable or having legal action taken against the person who owes money.
Sometimes asking for help can be difficult. Many times medical debt is incurred through unpreventable situations and families shouldn't feel ashamed seeking out advice. As this new report by the CDC shows, the problem of medical debt is not isolate. Many Americans need help paying for or managing their debt, especially since the economic downturn.
Source: UPI.com, "Medical debt burdens 20 percent in U.S.," March 12, 2012
]]>When credit card debt gets out of control, bankruptcy can be effective at stopping creditors from seeking money from you. However, sometimes creditors illegally call people, even after they file for bankruptcy, and ask them for money. The calls can happen without pause, and the stress from these calls can be overwhelming.
]]> Calls that ask for debts that have been erased in bankruptcy and calls that threaten are illegal. A shocking number of credit collection agencies are illegally calling people asking for money that has been discharged.Now, the Consumer Financial Protection Bureau and the Federal Trade Commission are stepping up monitoring and enforcement of debt collectors to make sure they are operating within the law. With an increase in credit card borrowing in 2011, more people might find themselves in a situation where creditors are harassing them so it is important that the government steps up regulation.
If credit collection agencies are harassing you before or after filing for bankruptcy, it might be wise to speak with a bankruptcy attorney. They might be able to help you take action to stop illegal harassing collection calls.
Source: Huffington Post, "Debt Collectors Targeted For Heightened Unlawful Harassment," Catherine New, Mar. 1, 2012
]]>Very few cases can be discharged for extreme circumstances. This is seen by many as the next great potential financial crisis. With high unemployment especially for recent graduates, many of them are seeking ways to avoid payments or are forced between living with their parents and paying their student loans.
]]> Debt such as credit card debt could be discharged through personal bankruptcy, but young people have more student loan debt than credit card debt. Many in the industry are hoping laws will change soon to allow some bankruptcy debt to be discharged in order to alleviate the potential larger impact of students defaulting on their student loans.Last year was the first time that the total outstanding student loan debt exceeded $1 trillion, and new loans exceeded $100 billion in 2010 for the first time. These loans will likely force students and parents to seek help through bankruptcy. The bankruptcy will likely only be able to discharge debt other than student loans, unless change is implemented soon.
Many parents fear losing their assets and retirement because many cosigned loans for their students, without thinking their children would be unable to pay them because of the lacking job market.
Source: Forbes, "The Student Loan Crisis Is Crippling America's Families -- Is The Economy Next?," Sheryl Nance-Nash, Feb. 7, 2012
]]>This week, a judge ordered that companies that use overseas workers to make fake debt-collection calls be shut down. The problem has affected thousands of people who owed nothing. After the Federal Trade Commission sued a group of companies, the judge issues an order shutting them down, to help prevent people from paying money to companies that isn't owed.
]]> The FTC says these companies operate using fraud. They target consumers who submitted personal identification information when applying for payday loans. The companies then had people in India call to ask for money that was owed, when in fact the people didn't owe anything.The investigation into the fraudulent debt collection calls is in its early stages and the FTC isn't sure how the company involved obtained the personal information. The people applied for payday loans with legitimate companies, which suggest that the information was stolen.
Some people are confronted with debt collection calls from multiple creditors. They may easily lose track of who they owe and how much they owe. Receiving a fraudulent call when they are working to pay off creditors can leave some people victims of fake collection calls.
Debt can get out of hand for some people and they may be faced with harassing debt collection calls. Speaking with an experienced bankruptcy attorney may help stop the harassing phone calls and make sure that no fraud is committed by collectors.
Source: Business Week, "Court Order Halts Debt-Collection Operation FTC Calls Fraudulent," Carter Dougherty, Feb. 21, 2012
]]>Although credit card debt decreased last month, debt continues to be a major hurdle for many people across the country. People face debt for various reasons, sometimes for reasons that are completely unavoidable such as an emergency hospital stay, emergency trip to visit a sick relative, or an unexpected car repair.
]]> These unavoidable situations sadly sometimes result in unmanageable debt. Although new reports indicate people are reducing their credit card debt, many still owe on their cards and have many other forms of debt that are spiraling out of control.Many experts are warning about increasing student loan debt coupled with a high unemployment. Since student loans almost never can be forgiven in bankruptcy court, and graduates are sometimes living off of credit cards, likely will face the need for credit card debt reduction plans later in life.
It's important for Americans, especially those with student loans to understand the different types of debt and what could potentially be forgiven in bankruptcy. If debt get's too out of hand for someone to make their minimum payments each month, it might be wise for them to consult with a bankruptcy attorney.
Source: Business Insider, "The Average Consumer's Credit Score Improved For The First Time In Nearly A Year," Mandi Woodruff, Feb. 16, 2012
]]>People often wonder if they file for bankruptcy if the bank will take their home. This is a legitimate concern, and it often depends on a few different variables. You can lose your home in a number of different ways, including while in Chapter 7 bankruptcy.
]]> If you stop making payments and ignore requests for payment of a loan modification from the bank, you will likely go into foreclosure and lose your home. Depending on the state, you may still be liable for some of the costs after the bank sells the property. If you are in bankruptcy, the situation can change.People that file for Chapter 7 bankruptcy can still lose their home. After the court trustee reviews your paperwork, they may determine that your home equity exceeds the amount that can be protected, they may sell your house to pay the creditors. Sometimes filing for bankruptcy can delay the foreclosure process, but many times it is only a delay, not a stop to the process.
There are other ways that people in bankruptcy can lose their homes. It would be wise if you are behind on your mortgage payment or in a situation of financial hardship to speak with a bankruptcy attorney. They will be able to assess your individual situation and guide you through the bankruptcy process.
Source: Fox Business, "Can Bankruptcy Cause Me to Lose My Homes?," Justin Harelik, Feb. 7, 2012
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