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Orlando Bankruptcy Law Blog

The increasing problem with credit card debt in the U.S.

Most Americans have credit card debt, and most people with credit cards do not pay the balance off in full each month. For many Florida  consumers, this balance accumulates quickly, leaving them with more credit card debt than they can effectively manage. In fact, the rate of card holders who are delinquent on their balances is increasing rapidly.

The rate of delinquent card holders is slowly growing every quarter, growing from 3.5 percent to 4.4 percent between the first and second quarters. Credit card debt is often indicative of other financial problems, and it is quite normal for individuals with this type of debt to have other types as well. From the first quarter to the second quarter in 2017, there has been a slight increase in the amount of car debt and mortgage-related debt.

Finance company sued for alleged illegal home foreclosure

Many Florida residents and others around the country dream of home ownership. However, sometimes the mortgage payments for a home can put a drain on a family's finances. In dire circumstances, banks may choose to foreclose on a home if a homeowner cannot regularly make mortgage payments. A woman in another state has claimed that a finance company conducted an illegal home foreclosure on her residence.

In Apr. 2007, the woman got a mortgage loan through the Federal Housing Administration. Sometime later, the loan was transferred to a major bank. The woman stated that she asked for help with making her mortgage payments. A loan modification was approved for her during this timeframe. After she received the approval for modification, the loan was transferred to a finance company.

Tips for paying off credit card debt

Many Florida residents and others around the nation have a variety of credit cards at their disposal. Unfortunately, if not managed correctly, consumers may end up with a significant amount of credit card debt. Experts recommend several tips for managing credit card debt and improving credit scores.

It is important to pay more than the minimum payment due each month. Failure to do this can result in the assessment of late fees. Credit scores can suffer if someone has a pattern of making late payments. The scores are calculated by someone's performance in categories such as new credit, balances and payment history. It may be helpful for some to establish automatic payments to avoid missing payments and having credit scores suffer.

Overall home foreclosure levels improving

It is generally exciting for the state of Florida to be ranked number one in the nation in most scenarios. However, recent reports show Florida to have more home foreclosure sales than any other state in the country. While this particular benchmark was not positive for the state, there are many indicators nationwide that reflect much lower overall foreclosure levels.

A financial organization that monitors mortgage activity reported that the number of foreclosures in June was the lowest since 2001. Also, for the month, the organization observed the lowest number of first-time foreclosures since its reporting began. Over the past five years, there has only been one month that saw an increase in foreclosure inventory. In fact, the numbers were lower than they had been prior to the mortgage crises.

Focus on paying off credit card debt

Many Florida residents and others around the country frequently use credit cards as part of their family's financial plan. When used appropriately, they can be useful tools. However, carrying balances on the cards can lead to serious situations. When credit card debt grows, consumers may be caught in a never-ending cycle of mounting debt and interest payments. To break the cycle, financial experts offer several recommendations.

Analysts suggest keeping records of all income and expenses. It is imperative for people to live within their means in order to reduce the amount of credit card debt. After understanding where all one's money comes from and where it's going, a budget can be established. It is helpful to determine ways expenses can be eliminated or reduced. Also, there may be ways to increase income, such as selling items or finding a second job.

Credit card debt: Use credit cards the right way

Millions of Florida residents and others across the country have at least one credit card. While some may struggle with excessive credit card debt, many utilize their cards effectively as part of their household budgeting process. However, experts cite several mistakes routinely made by cardholders that should be avoided to maximize the potential benefits of credit cards.

Analysts stress that one of the largest costs of credit cards can be the interest that accumulates on balances. Credit card debt for the nation has now exceeded $1 trillion. While it is not always possible to pay the full balance on a card, it is recommended that someone pay more than the minimum balance due each month.

Home foreclosure rate still high with distressed mortgages

Residents in Florida and others around the nation have witnessed much improvement in various indicators over the past decade since the housing crisis.  For example, the home foreclosure rate for the total housing market decreased 22 percent in the second quarter. However, a particular niche of the market is still experiencing distress. Foreclosures of severely delinquent mortgages purchased by investment companies are increasing.

In 2010, at the peak of the housing crisis, institutional investors began to purchase delinquent mortgages at government auctions. Homes that had lost significant value during the housing crisis could be purchased at severely reduced rates. The practice was met with opposition as many believed investors should not be allowed to benefit from the crisis.

Florida pitcher Hernandez files for Chapter 13 bankruptcy

Florida baseball fans certainly remember watching Livan Hernandez pitch in the 1997 World Series, bringing the Marlins to victory and winning the honor of Most Valuable Player. However, Hernandez may feel anything but victorious these days, and the value of most concern is likely his dwindling assets. Fans may have been surprised to learn that the retired pitcher recently filed for Chapter 13 bankruptcy.

After earning $53 million as a professional athlete, Hernandez now claims to have less than $50,000 in assets. Instead, like many these days, he is struggling with debt. He admits to having at least $1 million worth of debt to nearly 50 creditors. Those to whom he owes money include numerous credit card companies and a local business owner who apparently loaned him over $200,000. His debt to the IRS for unpaid taxes may be of particular concern.

Is a short sale right for you?

When you keep getting further and further behind on your mortgage, a short sale can be one of the options on the table. Informing yourself about possible solutions and speaking with an experienced attorney can help you make the decision that is best for you.

short sale occurs when the bank consents to let you sell your house for less than the amount you owe. The lender agrees to accept this amount as full payment.

Loan modification may not solve mortgage problems

Waking up in the morning to the fear that something bad is going to happen can begin to wear on a person. Will the bank call again today? Will another notice arrive in the mail about the defaulted mortgage? What options are left when there simply is not enough money coming in to pay all the bills? Some may consider contacting the bank to discuss a loan modification, but this course of action is not always successful.

If a Florida mortgage lender denies an applicant's request for a loan modification, where can the homeowner turn? It is possible that keeping the home is no longer the most important goal, especially if the homeowner has no family. However, losing a home to foreclosure is not an option for many families, and when a bank refuses to negotiate, a homeowner may seek relief in other ways.

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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