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When you've done all you can you may be able to get A Fresh Start

Orlando Bankruptcy Law Blog

The link between credit card debt and medical bills

While sources claim that the Affordable Care Act has lowered medical debt for many individuals here in Florida and across the country, many others are still struggling with it. In fact, approximately 64 million Americans struggled with this financial problem in 2014. Now, some research shows that there is a link between credit card debt and medical bills.

Even having health insurance does not seem to protect people from ending up with thousands of dollars to pay out of their own pockets. Many people are avoiding going to the doctor in order to keep from incurring medical debt. Those who are not able to do so are using their credit cards to pay their bills.

Bankruptcy could be the best debt relief option

Many Florida residents are talked out of filing for bankruptcy with stories of how it will ruin their credit and make it impossible to rebuild financially. They seek other debt relief options through credit counselors and other supposed debt management companies. Even if a program is not a scam, full of false promises and operated by less than honest players, it might not provide the answer for which many financially struggles individuals are looking.

Even legitimate credit counselors might not fully outline the benefits of bankruptcy to their clients. Furthermore, they often only deal with credit card debt. This means that other debts, such as mortgage loans, medical bills and student loans, are not dealt with at all. After spending months or years paying off credit card debt, those other financial obligations can remain an issue.

Beware of the true cost of payday loans

Sometimes, consumers find themselves in need of immediate cash. Usually, the need is of an emergency nature such as a car repair, health emergency or other incidents that defy planning for. For some the need is great and resources for help are scarce. So, a consumer enters into the bizarre world of payday loans.

A payday loan is quick and easy to get: Just prove that you have a job and an upcoming payday and the money is yours. But at what price?

Chapter 7 bankruptcy often gets a bad rap

Florida residents who are overwhelmed by debt are often searching for the best debt relief solution. Many will fail to consider Chapter 7 bankruptcy, however. This is largely because of the amount of misinformation surrounding the process and the rights of filers.

A Chapter 7 bankruptcy is called a "liquidation," which can immediately put Florida residents off when it comes to filing. People believe that they will lose all of their property and it will be sold to pay creditors. However, that is not the whole truth. In reality, most debtors will be able to keep a substantial amount of their property when the proceedings are concluded. This is due to numerous property exemptions allowed under the U.S. Bankruptcy Code or Florida's bankruptcy laws.

Dealing with funds returned by creditors in Chapter 13 bankruptcy

Florida residents with regular incomes and struggling with their finances have options. Filing for Chapter 13 bankruptcy could alleviate their financial woes while allowing them to retain their property. As part of the proceedings, the filer is required to propose a debt repayment plan for approval by the court.

Two Chapter 13 cases being administered by the same trustee recently ended. One filer received a discharge after completing a repayment plan, and the other filer's case was dismissed because the filer failed to make the agreed upon payments. In both cases, a creditor received payments successfully but returned them to the trustee. The trustee argued that these funds were considered to be unclaimed.

Be wary of companies that promise you a loan modification

Too many Florida homeowners understand the uncertainty of whether they will be able to keep their homes because they are unable to make the payments. It is that uncertainty and fear upon which mortgage debt relief companies prey. Every homeowner should be wary of any company that promises that it can provide him or her with a loan modification for a fee.

The promises that these companies make are enticing, but more often than not, they are unable to deliver on them. A homeowner might be told that the company provides a money back guarantee and that every one of their customers has received a modification to his or her mortgage loan. The old saying that if something sounds too good to be true, it probably is definitely applies to these companies.

Chapter 7 bankruptcy could be the best debt relief option

When a Florida consumer is having financial trouble, the prevailing advice is to work with creditors as much as possible and sell whatever can be sold. Therefore, people shy away from filing for Chapter 13 or Chapter 7 bankruptcy under the mistaken belief that it should be a last resort. Even though there is a downside to individuals having a bankruptcy on their credit reports for 10 years, that does not mean that it is not the best debt relief option under the circumstances.

Even the Federal Trade Commission (FTC) attempts to deter people who are struggling with their finances from filing for bankruptcy while warning people about debt relief scams. Supposed debt relief companies will entice individuals into giving them what little extra money they have in return for a promise of lower interest rates, a reduction in principal or reduced payments. These scams often end up putting hard-working, unsuspecting individuals even deeper in debt.

What a discharge means in a Chapter 7 bankruptcy

Getting some relief from overwhelming debts is something that many Florida residents both need and desire. However, there could be some confusion as to what debts can be discharged in a Chapter 7 bankruptcy and what debts cannot be. Here, we will explore the debts that generally are not subject to discharge.

Many Florida residents are familiar with the fact that they generally cannot receive a discharge for certain taxes and student loans. These are not the only debts that filers will still be liable for after the bankruptcy is closed. It might not be surprising to know that alimony and child support are included as well. However, filers might not be aware that any judgments for personal injury claims that are the result of driving under the influence of alcohol or drugs are also not subject to discharge.

What are your options if unable to manage your credit card bills?

When you find yourself in a position in which you are unable to effectively manage your debt, it can be overwhelming and frustrating. If credit card bills have become more than you can keep up with on your income, it is important to know what legal options may be available to you as a Florida resident. In these situations, bankruptcy may be an optimal choice. 

Credit card debt can become unmanageable for a myriad of reasons. From unemployment to a medical emergency, there are times when a family may need to rely on credit cards simply to get by. Whether your balance was caused by unexpected financial emergencies or simply overspending, there are ways by which you can discharge this debt and secure a strong financial future.

Stop harassing calls about credit card debt

Many Florida residents would agree that it is easy to get into financial distress. An illness, accident or job loss can quickly make it difficult to pay the bills each month, and in many cases, it is credit card debt that is neglected first, since it is not considered as important as paying the rent and feeding the family. Eventually, however, those creditors are going to start calling wanting their money.

Debt collection companies have been in the news in recent years for violating the Fair Debt Collection Practices Act, which limits what they are allowed to do in order to collect debts. Many Florida consumers are not aware that they have rights when it comes to debt collection. For example, they are not obligated to take a debt collector's calls, and in fact, they can even have them stopped. However, it might be beneficial to take at least one call in order to get the details regarding the debt the caller claims is owed.

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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