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Orlando Bankruptcy Law Blog

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.

Credit card debt may bring troubling phone calls

When dealing with financial troubles, nothing may be more intimidating than when the phone rings. Debt collectors frequently call people to remind them of their overdue payments or to ask for immediate payment for past due amounts. A person in Florida who is struggling to keep up with credit card debt and other obligations may feel flustered and confused.

When debt collectors call, people are advised to remain calm and polite. Most of these calls are recorded, so people are wise to think carefully about what they say. Before agreeing to make a payment, people should request written verification of the debt to insure the debt is valid. In fact, requesting written confirmation of all agreements is a good idea. It is also advisable for people to take notes throughout the call.

A loan modification could help in avoiding home foreclosure

Florida homeowners continue to have problems making their mortgage payments despite the upturn in the economy across the nation. Some homeowners might be able to negotiate a loan modification with their lenders as a way of avoiding home foreclosure. For those who want to keep their homes, attempting to modify their loans is often the first step.

Before going to the lender with a request for a loan modification, it would be a good idea to gather some documentation. Tax returns, pay stubs and mortgage information, along with documentation about other sources of income, if any, are a good place to start. One important component that many people find a challenge to create, or forgot to include at all, is a letter explaining your situation.

What to expect at your Chapter 13 bankruptcy confirmation hearing

Florida residents do not have to be destitute in order to be in financial distress. Chapter 13 bankruptcy has helped numerous people get their financial lives in order. As part of the proceedings, the filer is required to submit a debt repayment plan with the petition, but not later than 15 days after its filing without leave of the court. Before carrying out the provisions of that plan, it must be approved by the court at what is called a confirmation hearing.

As is the case in a Chapter 7 bankruptcy, a meeting of creditors will be held. No later than 45 days after the conclusion of that hearing, another hearing will need to be held in order to approve the repayment plan. The filer's creditors will be given no less than 25 days' notice of the confirmation hearing. Creditors are entitled to file objections to the plan.

Can student loan debt relief be found through bankruptcy?

When student loans are causing financial struggles, many question whether bankruptcy will help. Fortunately, the answer to this question is maybe. More than likely, most Florida residents have heard that student loans cannot be discharged through bankruptcy. That might be true in many cases, but there is a procedure for seeking student loan debt relief in both Chapter 7 and Chapter 13 bankruptcy, which are the most common chapters filed by individuals.

In a Chapter 7 bankruptcy, it will be necessary to file what is called an "adversary proceeding" in order to attempt to have student loans discharged. Three basic circumstances are often required to show that paying the loans would create "undue hardship" for the borrower. If a Florida resident is unable to keep up a legally defined minimum standard of living due to health issues or a disability, the loans might be discharged. However, the court will more than likely want to know that the filer made a good faith effort to pay back the loans prior to filing the bankruptcy and adversary proceeding.

Student loan and credit card debt are plaguing Millenials

As Millenials in Florida and elsewhere strike out on their own, they are faced with numerous financial decisions. They are often bombarded with offers of credit. Generally, those who go to college are taking out thousands of dollars in student loans. Between student loans and credit card debt, the financial futures of Millenials are at risk. Sources indicate that the only other groups facing the same type of financial crisis are minorities.

Since the Great Recession, job prospects for newly graduated Florida residents can be grim. Therefore, the thousands of dollars they took out in student loans could remain unpaid for decades to come. Furthermore, many Millenials and minorities rely on credit cards for necessities, such as food, gas and utilities. 

Florida remains number 1 in home foreclosure rankings

Even as reports indicate that the economy is improving, the housing market in Florida continues to suffer. The state remains number one in the home foreclosure rankings. This is despite the fact that the number of foreclosure actions has dropped approximately 37 percent from last year.

The numbers indicate that many of the current foreclosure actions have been going on for years. Some sources attribute the decline in new foreclosure actions to the fact that more homeowners are being proactive in attempting to work out a solution with their lenders. Even so, many Florida residents continue to struggle to make ends meet, which means that it is still more important to put food on the table than it is to make a mortgage loan payment.

Is filing Chapter 7 bankruptcy the right move?

The economy might be improving, but that does not mean that Florida residents no longer have financial issues. Many people continue to struggle to make ends meet and telephone calls from bill collectors are only adding to the stress. Perhaps they need to consider whether filing for Chapter 7 bankruptcy would be the right move under the circumstances.

For Florida residents who are still unsure, perhaps the following indicators will help in making the decision. The first step is to understand just how much debt is owed. No decision should be made without having as full a picture as possible of the situation.

What are the different debt relief options with bankruptcy?

Florida residents often find themselves having financial difficulties to the point that they are unable to meet their obligations. It is then that the prospect of filing for bankruptcy might be a viable debt relief option. There are two main types of bankruptcy that consumers file -- Chapter 7 and Chapter 13.

A Chapter 7 bankruptcy is called a liquidation bankruptcy because any assets that do not fall within an exemption allowed by either the state of Florida or the U.S. Bankruptcy Code will be liquidated. In most cases, the majority of an individual's assets will fall under an exception. However, for those who have a second home, a second car or other assets that do not fall within an exemption, the trustee could take those assets and sell them in order to pay creditors. Of course, before a person can file under this chapter, he or she will have to meet certain financial requirements.

There is a financial life after Chapter 7 bankruptcy

As many Florida residents continue to struggle financially, they might be searching for debt relief options. Some of them might avoid thinking about filing for Chapter 7 bankruptcy because they are under the mistaken belief that their financial lives will never recover. The truth is that there is financial life after the proceedings are finished.

It is true that credit scores do take a hit after a bankruptcy. However, without filing, an individual's credit score would usually only continue to get worse. Bankruptcy often stops that downward spiral. In fact, research has shown that by the time a filer receives a discharge, his or her credit score is already beginning to recover.

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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