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Orlando Bankruptcy Law Blog

Consumers need more emergency funds than credit card debt

Many Florida residents and others around the nation maintain an emergency savings account to help them when unforeseen expenses occur. However, a financial services company recently reported that nearly half of all consumers have more credit card debt than money in their emergency funds. While roughly 17 percent of people in this country have no credit card debt, it was determined that they have no emergency account. Analysts are concerned that many in this situation face the real possibility of experiencing high-interest debt should an emergency occur.

It was recently reported that total household debt had grown to over $12.5 trillion. This total, just shy of its 2008 peak of $12.68 trillion, reflected the largest increase since 2013. Financial experts urge consumers to both pay down debt and build up an emergency fund.

Home foreclosure rates improving for Miami-Dade County

After the mortgage crises, many indicators reflect improvement in the financial situations for homeowners in Florida and throughout the country.  Many measures are maintained to demonstrate performance of the housing market. While many improvements are being made, reports from a national real estate and property data provider show that one Florida county still has the room to improve when it comes to home foreclosure.

The report indicates that Miami-Dade County was second only to New York City in the rate of repeat foreclosures among major housing markets. A repeat foreclosure is defined as a foreclosure start on a property that showed a previous start in the last 10 years with the same owner and property address. The repeat foreclosure rate for New York City was 54 percent, while Miami-Dade County was a 32 percent rate. Other metropolitan areas with high foreclosure rates included Los Angeles, Atlantic City, Trenton and Philadelphia.

Chapter 7 bankruptcy discharge violated by wage garnishment

Florida residents may seek bankruptcy relief to regain control of their finances. Many see it as an opportunity to have a fresh start. In fact, in a typical a Chapter 7 bankruptcy, the borrower's debts are discharged after assets have been liquidated and funds are paid to the creditors. However, a couple in another state recently fought attempts to have wages garnished after their discharge.

A man and his wife had filed for Chapter 7 bankruptcy three years ago. The man had received some state unemployment benefits prior to his bankruptcy filing. It was reported that the state Department of Workforce Development had started questioning the unemployment benefits several years earlier. However, the agency had not made any claim.

Avoid this mistake when paying off credit card debt

The consequences of overspending can prove costly for Florida families. For many, overspending can result in a large amount of credit card debt. In the short term, it may mean that a consumer has less money to use for current needs since there are fees and interest to be paid. For the future, someone would likely be left with less money for investment. While reducing or eliminating credit card debt is often a goal for consumers, approaching it the wrong way can lead to a negative impact on finances.

In a recent interview with personal financial analysts, a mistake made when paying down credit card debt was discussed. Many consumers make only the minimum payment required on their balances. Most have no idea what impact that decision has on either the amount of interest to be paid or the time it will take to pay off the balances.

Remedies exist to prevent credit card debt causing insomnia

Although it is true that money cannot guarantee happiness, it can certainly provide peace of mind to most people in Florida and elsewhere. However, when things like credit cards are not handled responsibly, sleepless nights may follow. An interesting new study shows that more than 65 percent of consumers who suffer insomnia also have money problems that -- in many cases -- include credit card debt

However, different types of money concerns keep people awake. More than a third of those struggling with a loss of sleep stress about medical and insurance bills, while a similar number of individuals are concerned about the state of their savings for retirement. Rent, mortgage and student loan debts also matters of concern to a significant number of consumers, and then there is credit card debt that likely exacerbates the debt concerns of most.

Mortgage lender faces federal charges of illegal home foreclosure

Ocwen Financial Corporation is one of the largest mortgage servicing companies that are not related to any bank. The Consumer Financial Protection Bureau recently filed a lawsuit against the company in a federal court in Florida, alleging it made mistakes, took shortcuts, caused financial losses, and even caused many borrowers to face home foreclosure. Court documents indicate that the defendants instituted improper foreclosure proceedings on about 1,000 homeowners and even wrongfully sold some properties at auctions.

One borrower describes how he almost lost his house last year after seeking modification of his mortgage when he had financial problems. He claims to have received approval in writing and paid lesser amounts based on the new lower interest rate. He says he was subsequently informed of an error on the documents, and the process had to start all over again. His phone calls were never answered by the same person, and he says the usual excuse was computer failure.

Ways to reduce credit card debt

Many families in Florida and around the country have managed with one income for a period of time, either by choice or necessity. However, there are times when both parents are in the workforce again. An issue then arises on how best to manage an increased income for the family. A personal website addresses financial situations such as saving more, spending less and paying off credit card debt.

When a family is fortunate to have some extra cash in the budget, a decision must be made on how best to utilize it. Many families have a lingering credit card balance that needs to be addressed. Paying off credit card debt will enable families to eliminate interest payments and allow them to save more. However, there are different approaches to paying off the debt.

Medical bills common reason for bankruptcy

People file bankruptcy for many different reasons, and it often has nothing to do with their money management skills, or even their spending habits. In 2013, NerdWallet found that it was medical bills that put the biggest strain on Americans’ finances. Health care was the number one reason people filed for bankruptcy. 

Older Americans are not the only ones strapped with the high costs of health care expenses. NerdWallet found that 56 million Americans under the age of 65 have problems paying their medical bills. About 15 million of these adults will end up depleting their savings to pay their debts. Another 11 million use credit cards to cover hospital bill payments, and the credit scores of 17 million Americans will decrease due to medical bills. 

Chapter 7 or Chapter 13 bankruptcy -- which debts will remain?

Florida consumers who are facing overwhelming debt may be researching potential remedies for their dilemmas. When considering bankruptcy, one of the common questions relates to which debts cannot be discharged. Although there are specific requirements to determine whether a person qualifies for Chapter 7 or Chapter 13 bankruptcy, the way debts are treated differ considerably between the two options.

In Chapter 7 bankruptcy, payments on secured debts such as car loans or mortgages must continue. Those assets could be liquidated to pay creditors, but most unsecured debts can be discharged. Other debts that will not be discharged include any spousal maintenance or child support court orders, most student loans, debts remaining from a previous bankruptcy filing and debts not listed in the petition that was filed for bankruptcy. Any criminal fines or penalties and debts related to DUI claims, most tax debts and those entered into after filing for bankruptcy will also remain the filer's responsibility.

What avalanches, snowballs and credit card debt have in common

Many Florida residents might think of skiing the Alps or scaling the top of Mount Everest when they hear words like snowballs and avalanches in the same sentence. Not many, however, would conjure up images of credit card debt. Yet, these things are connected in the financial world.

Many people in this state, as well as others in the nation, have significant credit card debt. Financial observers say this is often a sign of a booming economy, meaning people are making large purchases, which puts money into the economy. The problem is some of the people who are spending have no way to pay back their credit obligations.

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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