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Orlando Bankruptcy Law Blog

Can Chapter 7 bankruptcy help student loan woes?

As the second largest category of consumer debt nationwide, student loans are fairly common among Florida residents. Unfortunately, so is defaulting. Approximately one million borrowers default on their student loans every year. For those who think they may default on their own loans, Chapter 7 bankruptcy could provide much needed debt relief. 

The student loan crisis is not getting better anytime soon. The average 2017 college graduate left school $40,000 in debt -- $3,000 more than those who graduated in 2016. It might be due to rising education costs that experts have predicted that 40 percent of those with student loans will default on them by the year 2023. 

Rapper T-Pain faces home foreclosure in Florida

T-Pain is probably most well-known for his musical prowess, but music fans might be surprised to learn that the rapper recently lost his Florida home. Home foreclosure can happen to anyone, but there are steps that homeowners can take to stop or prevent the process altogether. However, individuals must be proactive in their approach. 

In 2007, T-Pain used an $85,800 mortgage to purchase a modest Florida home. However, the bank that holds that mortgage claims that the rapper stopped making payments in July 2016. In 2017 the bank sued T-Pain, citing an owed debt of $83,061.86, which includes what was left on the mortgage as well as interest. 

How a short sale can stop home foreclosure

Significant financial changes can leave some Florida homeowners short when it comes to paying their monthly mortgage. Short sales are often billed as an effective way to stop home foreclosure, even if it means that the owner has to sell the house and move out. While a short sale can be effective at stopping foreclosure, there are also some significant consequences that should be considered. 

In a short sale, a homeowner sells the home for less than he or she still owes on the mortgage. However, simply finding a buyer is not enough. The homeowner must get the lender to accept the lesser amount as the last payment on the original loan. To make this work, the lender must believe that the short sale will be better for it than foreclosure action. 

Are personal loans a good choice for debt relief?

Most categories of consumer debt are on the rise, including credit cards, auto loans and mortgages. None of those, however, are increasing nearly as fast as personal loans. Although Florida consumers take out personal loans for a wide variety of reasons, many are using them as tools for debt relief.  

Unlike other loans that are made with a specific intent -- such as student loans for college tuition or auto loans for purchasing vehicles -- personal loans can be used for virtually anything. The two most common uses include making a one-time large purchase and consolidating debt. The latter is a useful approach for consumers who have significant amounts of credit card debt with varying interest rates, payment dates and balances. With a personal loan, consumers can use the funds to pay off the balances and then make one monthly repayment toward the loan, usually at a much lower interest rate. 

Dealing with student loans and credit card bills as a young adult

Over the past several generations, becoming an adult has been marked by hitting several major milestones -- building a career, starting a family and buying a home. This idealistic view of things may no longer be a reality for young adults. Most Florida millennials are burdened with so much debt, from student loans, credit card bills and more, that getting ahead may be difficult. 

The LendingTree conducted a study of debt held by millennials living in the largest 50 cities in the United States. They found that the average millennial living in one of these major cities carries an average of $23,064 in debt. Student loans account for about 41 percent of all millennial debt. 

You can catch your partner's credit card debt

Most people do not think of debt as contagious or something they can contract from another person, but a recent report indicates that catching debt is entirely possible. In terms of a romantic relationship with a serious partner or spouse, people in Florida can end up taking on the burden of their partner's finances. Things like credit card debt and secretive spending can suddenly become the other person's problem. 

In general, couples -- especially those who are married -- deal with debt. However, when one person becomes financially liable for the debt accumulated by the other, there may be a problem. A June 2018 survey from Finder.com found that around 74 million adults have shouldered the burden for a current partner or ex's debt. Those 74 million individuals collectively took on about $250 billion in this type of acquired debt, which averages to about $11,845 each. 

Besides bankruptcy, what are my options for debt relief?

When consumers realize that they have more debt than they can handle, their first thoughts might not turn to bankruptcy. Indeed, there are other debt relief options that some people in Florida might want to utilize first. However, if they are not effective at reducing debt to a manageable level, then bankruptcy is still an option. 

Making a budget is a good place to start for most people. Consumers can get a good idea of how much money they are making, how many bills they have and what they are spending on other expenses. A budget is not a cure for debt, but most people can use it as a guide toward improved spending habits or debt repayment. 

Be sure to include all debts for optimal bankruptcy relief

No one wants to fall behind on their bills and dodge phone calls from their creditors. Even individuals who are financially responsible and wealthy encounter situations that cause them to become delinquent on their accounts. If you are not sure of how you can get control over your circumstances, you may want to consider bankruptcy in Orlando. 

Bankruptcy requires you to disclose all debts, even those that you may not remember or believe belong to you. By listing your debts, the courts can notify your creditors. By law, they have the right to know about bankruptcy filings so that they can protect their interests and your rights. Any debts you forget to include in your filing can come back to haunt you. 

Stop repossessions, achieve debt relief with bankruptcy

Being faced with losing your car or other important asset because you cannot pay your bills is an understandably troubling situation. While repossession is a common tactic that Florida creditors resort to when faced with nonpayment, you have the power to stop these attempts. By filing for bankruptcy, you can both stop repossessions and set yourself on a path toward debt relief. 

For most people, owning a vehicle means having steady, reliable access to transportation for work, school and other important matters. Since public transportation is not always reliable or even available in certain matters, potential repossession of your vehicle can be life-changing. When you file for bankruptcy, an automatic stay goes into effect, which prevents creditors from continuing any type of collection efforts against you. This means repossessions stop, your foreclosure is put on hold and harassing creditors have to stop calling you at all hours of the day and night. 

Should we be talking more about credit card debt?

Florida parents usually teach their children about which matters are polite to discuss, and what issues they should simply keep to themselves. Although these lessons might be useful in some situations, it leaves some adults unable to engage in meaningful discussions about serious issues affecting their daily lives. Namely, debt.  While no one wants to bring up how much credit card debt they have, one expert thinks it could be useful to engage in these types of discussions. 

A prominent psychotherapist recently described one of the biggest concerns she hears from patients -- their debt. Stories of overwhelming student loans, car payments, rising rents, rising insurance deductibles, credit card debt and much more are probably not as uncommon as most people think. However, since talking about financial worries is a sort of cultural taboo, few realize that their neighbors, friends and even family members are facing similar struggles. 

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