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Orlando Bankruptcy Law Blog

Credit counseling required before filing for bankruptcy

As someone considering filing for bankruptcy in Florida, you may be exploring your options and trying to figure out whether this may be the most effective method of getting your finances back in a manageable state. Many people having a hard time digging themselves out of debt due to credit card obligations, medical bills or what have you find that filing for bankruptcy gives them a much-needed new start, but there are certain steps you must take ahead of filing.

For example, if you plan on filing for bankruptcy in Florida, you need to first take part in credit counseling within 180 days of the date you wish to file. You cannot undergo credit counseling just anywhere, however. Instead, you must receive your counseling through an entity approved by the U.S. Department of Justice's U.S. Trustee Program to operate within your district. So, what can you expect to happen during your credit counseling session, and what types of matters may you address?

Last year's credit card debt outpaced predictions

Coming out of the holidays and into the new year can be an uncomfortable experience for some people in Florida. While virtually no one plans to become entrenched in debt, it is sometimes hard to escape. From feeling obligated to purchasing gifts to traveling to visit family, the holiday season can put a serious dent in some people's credit card debt as well as their financial security.

In Nov. 2018, consumer debt in the United States climbed much faster than the previously estimated pace of growth. Much of this growth has been contributed to borrowing in order to make various purchases. In total, credit balances grew by $22.1 billion in a single month, which came after a $25 billion gain from Oct. of the same year.

How filing for Chapter 7 bankruptcy stops harassing creditors

Bankruptcy is often vilified as the final nail in a person's financial coffin rather than the breath of fresh air that it truly is. By the time a person in Florida files for bankruptcy, he or she are usually behind on one more debts and is dealing with other serious issues, such as harassing creditors or even foreclosure. One of the most pleasant surprises people get from filing Chapter 7 bankruptcy is the automatic stay that stops many of these issues in their tracks.

The automatic stay kicks in after filing for bankruptcy and protects filers from collection agencies, creditors, government entities, utility companies and others who are trying to extract money from that individual. This can be an essential lifeline for those who are struggling to maintain a safe and comfortable roof over their heads. An automatic stay can potentially prevent a utility company from turning off services for a period of approximately 20 days and temporarily halt foreclosure proceedings. In some cases, it can also stall eviction proceedings. There are exceptions and specialized instances for these types of situations, so understanding when an automatic stay will work -- and when it may not -- is important.

What should I do re home foreclosure on my investment property?

During the housing boom, Florida was a popular place for investors to scoop up real estate. Unfortunately, as the market declined over the years, many investors found it more and more difficult to keep up with the overhead costs of their properties. If you are one of those investors, it may be helpful to understand what to do when faced with home foreclosure on your investment property. 

There are many costs that go into your investment property besides the mortgage. There is maintenance, upkeep costs and, depending on the neighborhood, skyrocketing homeowners' association fees. If you fell behind on these payments and your mortgage and are now facing foreclosure, you may feel tempted to simply let the process take its course. However, since the foreclosure process takes time until the bank assumes financial responsibility, the property will remain in your name until such time, leaving you financially responsible for other costs. These include: 

  • Association dues 
  • Code violation fines 
  • Management fees 

Ready to stop home foreclosure? Here are some options

A house is not always just a house. Florida homeowners build memories within the four walls of their homes, and leaving those memories behind is not an easy process. This is why the process of home foreclosure is not just a financial issue -- it is also an emotional one. All is not lost, though, and many homeowners have options to effectively stop foreclosure.

Working directly with a mortgage lender on this matter might seem scary. After all, they are the ones who are bringing the foreclosure action. However, lenders generally prefer to receive payment and are often willing to find a way to make that happen. Getting in touch with a lender the moment one realizes that the monthly mortgage cannot be paid is a good first step to finding a solution.

When insurance fails, debt relief is often necessary

Supporting a Florida family often requires more than a single income, but few need five incomes just to survive. That is the sad reality for one out-of-state family as they struggle to repay thousands of dollars in medical debt. For families in situations like this, personal bankruptcy might be a more appropriate option for debt relief.

The debt accumulation started when the couple had their first child. Despite it being an otherwise routine delivery, they received a $4,000 bill from their in-network hospital. From there the bills kept rolling in, with some debts as small as $300 and others accounting for upwards of $1,800. Some of those charges were apparently routine while others were for emergencies, including a hospitalization when their 2-month-old baby was experiencing breathing problems.

Seeking debt relief and help with creditor harassment

Florida consumers overwhelmed by debt understand how difficult it can be to deal with the consequences of their financial situation. From threats of foreclosure to the repossession of personal property, it can be stressful, especially when also experiencing harassment from creditors. By successfully seeking debt relief through bankruptcy, a consumer can also secure relief from the threats and tactics employed by debt collectors.

Debt collectors may seek to collect what a person owes on a past-due debt, but there are certain types of behaviors that are unacceptable and qualify as harassment. A person may be a victim of creditor harassment if he or she is subjected to repeated phone calls, inappropriate language, the threat of any type of harm and more. Debt collectors also cannot call a person without identifying who they are and why they are calling.

What does revolving credit mean for those with credit card debt?

Most Americans have credit cards and have some credit card debt. While many Florida card holders are able to manage their payments and avoid falling behind, others may find themselves victim to revolving credit and balances that keep going up due to accumulating interest. According to a recent statistic, Americans have about $944 billion in credit card debt, and consumers carry about half of that amount over each month.

When a credit card holder carries some of his or her balance over to the next month, that is called revolving credit. When credit card balances increase, it typically indicates consumer confidence and a strong economy, but it can also mean that some consumers may be in over their heads. This will be an even more pressing issue for some if the interest rates jump. Higher interest means higher balances, and for many, less of a chance they can catch up.

What can you expect to take place at the 341 meeting?

One of your obligations after filing for bankruptcy will be to attend the 341 meeting, which some people call "the meeting of creditors." This may sound a bit ominous, but there will be no problem as long as you are well prepared and know what to expect.

About the meeting

Will Americans need help with their credit card debt soon?

Credit cards just might be as American as apple pie or baseball. Nationwide, consumers are carrying more than ever on their credit cards, adding to household debts and laying on the interest rates. Credit card debt can be incredibly stressful for people in Florida, and those who struggle to make their monthly payments may want to consider their options for debt relief.

In 1988, the average credit card debt in America was approximately $2,000. Now, 30 years later, Americans are lugging around an average of $8,284 on their credit cards. This is 2 percent higher than in 2017, putting the cumulative credit card debt at $949.9 billion. Experts from WalletHub predict that, when compared to the average person's income, an extra $177 per person will push debt into unsustainable territory.

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