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Orlando Bankruptcy Law Blog

Personal loans increasingly used for debt consolidation

Paying off debt can be easier when bills are consolidated into a single, manageable monthly payment. Debt consolidation is nothing new, but it is certainly growing in popularity. Some people in Florida might even be using this method to avoid filing for bankruptcy, but there can be drawbacks to this method.

Debt consolidation is the most commonly-cited reason for personal loans, with 61 percent of loans used for this purpose. The concept is simple enough -- a person who has several debts and monthly payments spread across accounts takes out a personal loan, pays off the existing debt and then focuses on repaying the loan through single monthly payments. These payments are often smaller and much more manageable, but at what cost?

How to stop harassment by creditors without filing for bankruptcy

Bankruptcy can be an effective way to stop harassing creditors in their tracks. However, much of the behaviors and tactics that creditors use are not legal in the first place. For those in Florida who are interested in how to stop harassment by creditors but are not quite ready to pursue bankruptcy, here are a few things to keep in mind.

The Fair Debt Collection Practices Act gives debtors a wide range of protections. For example, creditors are barred from contacting individuals before 8 a.m. or after 9 p.m. unless a different time is otherwise indicated by the debtor. This means that early morning or middle of the night calls go beyond strategies for debt collection and merge into the realm of harassment.

Is it possible to avoid home foreclosure?

Struggling to pay your monthly mortgage? While this can be an isolating experience, you are not alone. Other Florida homeowners have faced this exact situation, and many were able to come out on the other side without facing home foreclosure. However, avoiding foreclosure requires a proactive approach, so taking action sooner rather than later is usually best.

If you just realized that you will not be able to pay your mortgage or if you are already one or more payments behind, do not wait until the lender contacts you. Foreclosures can process faster than many people expect, and you could find yourself dealing with the process after missing only three months of payments. If you are behind on payments and did not contact your lender, it is not too late.

Can debt relief help student loan borrowers buy a home?

For generations, buying a home has been a defining milestone of becoming an adult. Unfortunately, this goal is becoming harder and harder for some young adults to obtain, and it is not necessarily because of a rough housing market or overpriced homes. Debt -- student loans in particular -- are holding back many young adults from not just buying a home, but also from doing many other things with their lives. As such, debt relief through bankruptcy could be the helpful for some people who struggling.

Getting a college education is often the key to securing a good career in Florida. Unfortunately, the cost of college is out of reach for many students, leaving them with no other options than to take out student loans. The average 2017 college grade left school with about $40,000 in student loans, and 40 percent of all borrowers are expected to default on their student loans by 2023. According to some experts, student loans have hit a crisis point.

Chapter 13 bankruptcy can help with financial toxicity

Receiving a cancer diagnosis is a life-altering event that can impact the rest of a person's life. The long-term effects of surviving cancer -- including the emotional toll of facing such a devastating disease -- can be difficult. However, one of the biggest hurdles facing young cancer survivors in Florida is something called financial toxicity, and it could be pushing some people toward Chapter 7 or Chapter 13 bankruptcy.

Financial toxicity refers to the financial burden created by medical bills and debt repayments. While this can impact virtually anybody dealing with medical bills, the effect is particularly profound in cancer survivors who have private insurance. Among these individuals, those with plans that have high deductibles and do not offer health savings accounts fare the worst.

Debt relief: higher interest rates could lead to bankruptcy

America has a serious fixation on car culture that might be hard to deny. Owning a motor vehicle is often about more than just transportation, and people in Florida often feel as if their choice of ride says a lot about who they are. However, as auto loans account for a significant portion of consumer debt, and interest rates are on the rise, some vehicle owners could find themselves in need of debt relief.

Current interest rates for five-year loans for new cars are currently hovering around 5 percent. A four-year loan for a used vehicle will usually have about a 5.7 percent interest rate. However, experts predict that these interest rates will jump by upwards of 10 percent by the end of 2019. Those buying new cars later in the year could potentially tack on a 6.4 interest rate just for buying a used vehicle, and as much as 5.5 percent for a new car.

Bankruptcy filings are low -- why is that bad?

Debt is something that virtually every person will have to deal with at least once or twice during their lives. While some consumers handle these debts effectively, many people in Florida struggle with monthly payments for things like their credit cards, auto loans and medical bills. Lower rates of bankruptcy might indicate that consumers are getting better at paying back their debts, but some experts caution that this explanation is not the whole story.

In Sept. 2010, 1.53 million people filed for bankruptcy. By Sept. 2018, the number of filings had fallen by approximately half, with only 770,000 filings, 97 percent of which came from individuals. This is the lowest number of bankruptcy petitions that the United States has seen since 2007. Unfortunately, these low numbers are likely because many people in need of help struggle to fully access the bankruptcy process.

Home foreclosure rates on the decline

Owning a home is a monumental achievement of the American dream. Unfortunately for some Florida homeowners, that dream has proven to be more difficult than expected. Recent data indicates that some of those difficulties could be on the downward slide, with rates of home foreclosure less than they have been in several years.

Current mortgage delinquency rates are the lowest they have been since back in 2001, before the recession tanked the housing market. Mortgage delinquency -- which includes foreclosure -- is currently at about 4.1 percent, which is significantly lower than in Oct. 2017, when rates were at 5.1 percent. This shows that while it might currently be more expensive to get a mortgage than it was just 10 years ago, those who already have a mortgage are handling the financial side of things well.

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.

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