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Orlando Bankruptcy Law Blog

Debt collectors are required to provide proof of unsecured debt

An out-of-state woman received a phone call from two debt collectors telling her that she owed a total of approximately $2,400 for some payday loans that she took out when times were tough. The problem was that she knew she had paid the loans back. However, like many Florida residents who receive harassing phone calls from creditors regarding their unsecured debt, she sent them money out of fear that they would follow through on their threats to file lawsuits against her.

The woman asked for confirmation that she owed the money. However, the people on the other end of the phone refused to provide it. In fact, she claims that they told her that she would only see the paperwork once a lawsuit was filed.

Four tips for getting your finances back on track after bankruptcy

Bankruptcy isn't a declaration of failure. And it's certainly not a permanent mark against your financial record. After bankruptcy, when you're enjoying freedom from the debts that made your life hell, you can start to build a better financial future.

Here are some tips for getting back on track and preventing setbacks down the road.

Eliminating credit card debt through bankruptcy

Your credit card company might have told you that filing for bankruptcy here in Florida will not eliminate your debt with them. Fortunately, that is not true. Credit card debt can be discharged so long as it was not incurred within 90 days of filing the petition.

Credit card debt is considered to be unsecured, which means that there is no collateral -- such as a home or a car. In a Chapter 7 proceeding, unsecured debt can be discharged. This means that you will no longer be responsible for paying any of that particular debt -- not one cent.

Dispelling some common myths about Chapter 7 bankruptcy

There are many misconceptions and myths surrounding bankruptcy. Some Florida residents who could have benefited from filing for Chapter 7 bankruptcy fail to do so based on misinformation. This blog will attempt to dispel at least some of those myths.

Some people are under the mistaken impression that once you file for Chapter 7 bankruptcy and receive a discharge, you will never be able to file again. Fortunately, that is not true. With some restrictions, a Chapter 7 bankruptcy can be filed any time after eight years from the date of discharge. In fact, you could file a Chapter 13 or Chapter 11 bankruptcy the day after you receive your Chapter 7 discharge.

Has a creditor obtained a wage garnishment against you?

Florida residents who experience hard times financially often receive threats from creditors to the effect that they will be sued and a portion of their income will be taken directly out of their paychecks. If an employer is served with a Writ of Garnishment, it is bound by law to remove the money from an employee's wages. When your financial situation is already dire, the last thing you need is a wage garnishment that further depletes precious monetary resources. 

Fortunately, filing for either Chapter 13 or Chapter 7 bankruptcy can serve two important functions. The first is that it could provide a resolution to your current financial situation. Second, and perhaps most importantly for those whose wages are being garnished, is the stay of execution. During the proceedings, creditors are not allowed to conduct any debt collection activities -- which puts a stop to any wage garnishments until the bankruptcy is resolved.

Is tax debt relief possible through bankruptcy?

As the old saying goes, there are only two things in life that are guaranteed -- death and taxes. Most Florida residents are under the impression that there is no way to escape a tax debt, but that might not be entirely true. Many people do receive tax debt relief by filing for bankruptcy, but certain conditions must be met before the debt is eligible for discharge.

In a Chapter 13 bankruptcy, the repayment plan could include tax debt. In a Chapter 7, the tax debt must meet specific conditions before being eligible for discharge. The requirements include how long it has been since a federal return for the particular debt was filed. In addition, the taxes must have been assessed no less than 240 days prior to the filing of the petition.

Most people would not risk credit card debt to have 1,497 cards

Most Florida residents would agree that it would be wise to avoid having too many credit cards. However, that has not stopped one man from making it into the Guinness Book of World Records for having the most credit cards at 1,497. Many people would say that he is at risk of incurring a significant amount of credit card debt, but the man claims to have a credit score of 750.

Some sources say that he is acting intelligently by having so many open accounts that are not maxed out. However, no one would recommend having the number of cards this man has. Opening numerous credit card accounts can lower your credit score, but that is not the biggest risk that people take when having several accounts. Overspending could easily get well-meaning consumers into financial situations from which they cannot easily recover -- if they can recover at all.

Home foreclosure rate in southwest Florida below 2 percent

For nearly seven years now, two major counties in southwest Florida have had some of the highest foreclosure rates in the country. Finally, the home foreclosure rate in those two counties has dropped below 2 percent. There is finally a light at the end of the tunnel for many homeowners in these areas who have watched their neighbors lose their homes.

Along with the drop in foreclosure filings, the number of short sales in the area has become practically nonexistent. November 2015 saw a nearly 55 percent decline in distressed homes sales and an almost 38 percent drop in sales of distressed condominiums. Now, lenders who are in possession of foreclosed homes could be getting ready to put those houses on the market. Like many people in the area, they could be waiting for the snowbirds to come back to the state to begin actively marketing their inventory.

Woman received student loan debt relief in bankruptcy

From the time she was a teenager, a woman suffered from depression, anxiety and eating disorders like many Florida residents. Even with her mental issues, the woman attempted to make a life for herself, and in the process, took out thousands of dollars in student loans. She reached a point where she sought debt relief through filing for Chapter 7 bankruptcy.

During the proceedings, she filed a complaint seeking a discharge of her student loans, which had a combined total of approximately $204,525. She owed Iowa Student Loan approximately $99,136.00, approximately $47,900.00 to Educational Credit Management Corporation, and approximately $57,489.11 to the United States Department of Education. Despite her best efforts, she has been unable to keep a job that allows her to make payments on these loans.

2015 saw a resurgence of credit card debt across the country

The further away the country gets from the recession, the more comfortable its citizens, including Florida residents, feel in using credit cards. In fact, 2015 saw a resurgence of credit card debt across the country that is quickly approaching pre-recession levels. Estimates indicate that each family in America is carrying an average of approximately $9,600 in debt from credit card use.

During the recession, many people turned away from credit cards. However, some of them are now using them once again. Fortunately, the data also indicates that consumers are able to keep up with their payments. Some analysts are concerned, however, that interests rates could go up this year.

Paul Urich
Orlando Office

Law Office of Paul L. Urich, P.A.
1510 East Colonial Drive
Suite 204
Orlando, FL 32803
Phone: 407-896-3077
Fax: 407-896-3041

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