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Bankruptcy Law Blog

Why millennials shouldn't count on bankruptcy for student debt

According to a report by the Federal Reserve Bank of New York, Americans owe more in student loan debt than all the credit card debt combined. That is a huge financial epidemic. One that is felt heavily by millennials, many of whom are facing the harsh reality of the job market. While credit card debt and other types of personal debt can sometimes (but first a debtor must qualify) be discharged through Chapter 7 bankruptcy, this is not true for all types of debt. Millennials may think this is an easy fix for their student loan problem. However there is just one problem.

How federal laws protect consumers from creditor harassment

As someone with debt issues or significant debt, you are probably no stranger to constant calls and e-mails from creditors. Although debt collectors in many situations are allowed to contact you, there is sometimes a fine line between debt collection and creditor harassment. If you believe you are the victim of creditor harassment, consider this: there are bodies of federal laws enacted that protect people just like you from creditors.

Rapper files for Chapter 13 bankruptcy protection

Florida residents may be interested to know that rapper Petey Pablo filed a Chapter 13 bankruptcy petition in North Carolina in April 2016. According to reports, he had roughly $50,000 in both assets and liabilities at the time of the filing. His creditors included Ford Motor Credit, Planet Fitness and the IRS. This is the third time that the musician has filed for bankruptcy protection.

He previously filed for Chapter 13 bankruptcy in 2009 when he had roughly $560,000 in assets and roughly $850,000 in liabilities according to court papers. That case was eventually dismissed because he failed to stick to the requjired repayment plan. Though he had reportedly fallen on hard financial times, he recently made a cameo on the series "Empire" and has written songs that have appeared on the show and on its soundtrack.

Consumers saving more, but also have credit card debt

An April 2016 survey suggests that people are trying to save more money, but more of them also have increased credit card debt. These two facts may eventually create a conflict. The survey looked at 1,600 adults. More than one-quarter reported making an effort to save more, and this was up slightly from the previous year.

Almost 70 percent of people said they were putting money into an account that was not for retirement. However, there was a 3 percent increase over the preceding year in the number of customers who reported carrying more than $2,500 in credit card debt each month.

Don't be scared of losing everything in a Florida bankruptcy

Being in debt is scary, and you might be doing everything in your power to avoid dealing with the situation. However, you don't have to let fear drive your decisions and control your financial life. Instead, you can educate yourself to take the mystery out of your situation and regain control.

For instance, if you are scared that filing for bankruptcy will mean losing everything you have, you need to learn about exemptions.

Debtor in Chapter 13 dismissal must pay attorney fees

If Florida debtors file for Chapter 13 bankruptcy, their case is dismissed without confirmation, and the attorney fees are returned to the debtor by mistake, the attorney may be able to recover those fees. This was the April 14 ruling by the U.S. Bankruptcy Appellate Panel for the 1st Circuit. In doing so, the BAP concluded that a 2015 U.S. Supreme Court ruling that said plan payments for a Chapter 13 bankruptcy held by a trustee must be returned to the debtor if the case was converted to a Chapter 7 does not apply in this case.

According to the BAP, the difference was that the newer case was dismissed before confirmation. The question has split courts, and while most have concluded that the ruling in the previous case, Harris v. Viegelahn, does not apply when the dismissal occurs before confirmation, not all have agreed.

Refinancing a mortgage after filing for Chapter 13

After filing a Chapter 13 bankruptcy petition and starting on the required repayment plan, some Florida residents may wonder how soon they might be able to apply to refinance the mortgage on their homes. Some people want to do so while they are still in the repayment plan period. For others who have completed it and have had their final discharges, they may want to know how long a period different programs require to elapse before approving refinancing.

During the repayment plan period, any refinancing will need to be approved by the trustee. This is because refinancing is considered to be taking on additional debt, despite the fact that it is only replacing the old mortgage with a new one. If a person is able to gain the approval of the bankruptcy trustee overseeing the case along with a lender, it is possible.

New Florida law provides suprise medical bill protections

Medical bills can hit some pretty high amounts. So, one of the last things a person likely wants to see in relation to medical care they have received is surprise medical bills on top of the ones they were expecting.

A new law has been passed here in Florida aimed at protecting consumers against one particular type of surprise bill: a surprise bill from an out-of-network provider for care a person received at a health care facility that was in their insurance plan's network.

9 signs you are the victim of creditor harassment

Anytime a debt collection agent contacts you, it can feel like harassment or abuse. After all, if you have debt, the last thing you need is to feel hounded to make payments you just can't make. To make matters worse, creditors are aggressive and they can be relentless when it comes to seeking payments.

However, there is a fine line between what a debt collector can and cannot do. These rules are outlined in the Fair Debt Collection Practices Act, but consumers can't always tell when that line has been crossed. Below are some signs that you might be the victim of creditor harassment.

Research being done on individual Chapter 11 filings

Florida residents who have a lot of debt and the ability to earn future income may decide to file Chapter 11 bankruptcy. Though Chapter 11 is typically used by businesses, it is available to consumers as well. A preliminary report by the American Bankruptcy Institute's Task Force on Individual Chapter 11 found that somewhere between one-quarter and one-third of Chapter 11 bankruptcy cases are filed by individuals.

The most common form of bankruptcy filed by individuals is Chapter 7 bankruptcy. In Chapter 7, a debtor's non-exempt assets will be liquidated with the proceeds used to pay creditors. A debtor who has a regular source of income and can develop a repayment plan may want to file under Chapter 13 instead. Chapter 11 bankruptcy is available to individuals who have debts that are greater than the Chapter 13 statutory thresholds.

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