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Bankruptcy Law Blog

Study shows that abuses by debt collection agencies are common

Florida residents who are in debt may be interested in learning about the results of a recent study about debt collectors. The research, which was conducted by the Consumer Financial Protection Bureau, was based off responses from around 2,000 people who had dealt with debt collection agencies. The results of the study showed that debt collectors don't always abide by the rules they're supposed to follow.

According to the CFPB, 40 percent of respondents said they received phone calls from debt collectors four or more times a week. This amount could constitute harassment. In addition, some of the calls respondents received were about a bill that wasn't theirs. In other cases, the debt collectors stated an incorrect unpaid balance.

Family files for bankruptcy after television home remodel

Florida residents may be familiar with the reality television show 'Extreme Makeover: Home Edition." This television program features stories about families that win the chance to have their homes remodeled. While the free house remodels may seem like gifts at first glance, the increased property taxes and electric bills that result from these makeovers can cause financial strife for some of the families that have been featured on the show.

A family that appeared on 'Extreme Makeover: Home Edition" in 2011 recently filed for Chapter 13 bankruptcy. However, the family members have stated publicly that the higher housing costs from the home remodel they received were not factors in their decision to file for bankruptcy. Members of the family say that their Chapter 13 bankruptcy petition was mainly based on financial problems that were caused by unemployment, disability and personal loans.

Is it better to let a car be repossessed or file bankruptcy?

When Florida residents have car loans they cannot pay back, it can be very stressful. If they allow the car to be repossessed, it may damage their credit for seven years. Choosing to file bankruptcy, on the other hand, may ding their credit for up to 10 years. Luckily, there may be alternatives to dealing with a burdensome car loan.

According to experts, if the car loan is the only credit obligation someone is unable to pay, bankruptcy may be overkill. However, that doesn't necessarily mean that repossession is the best option. When a car is repossessed, the lender will sell the vehicle at auction and bill the debtor for the difference between what it sells for and what is owed on the original car loan. In addition, the debtor will be responsible for repossession and other fees the lender is allowed to add to the loan.

Being sued for debt

Florida residents who have debt may be interested in knowing that they can be sued by their creditors. People should also know what they should do when a lawsuit has been filed against them.

Individuals may first be notified that they are being sued when they receive a legal complaint and a summons. The complaint will detail the creditor's claim for unpaid debt, and the summons is a notification that the individual should appear in court on a specific date if he or she wants to offer a defense against the claim. A non-response could result in a default judgment against the individual.

Tips for getting rid of debt this year

According to the National Retail Federation, Americans planned on spending an average of more than $900 during the winter holidays. Regardless of how much Florida residents spent on their Christmas shopping, NerdWallet advises adding credit card debt as a major category in their budgets. This may increase the odds that the debt gets paid off in a timely fashion. Debtors may want to use the snowball method, under which the card with the lowest balance gets paid off first.

Once that balance is paid off, the card with the next lowest balance gets paid off. This process continues until all credit cards have been paid off. Those who have credit card debt are urged to look at their 2016 statements to see if any of their purchases may be eligible for a tax deduction.

Dealing with unscrupulous debt collectors

Florida residents should know that it is illegal for bill collectors to harass, threaten or intimidate debtors. Those who are behind in paying bills and are receiving calls from debt collectors do have protective rights.

Knowing what constitutes illegal practices in debt collection is important. Under the Fair Debt Collection Practices Act, a debt collector may not lie, use profanity or call after 9 p.m. or before 8 a.m. In addition, a collection agent cannot call a debtor at work if they are informed that this is against workplace policy.

Breaking free from credit card debt

Many people in Florida carry substantial balances on their credit cards. Some people roll their balances over from month to month, paying high interest rates and dealing with ballooning debts. There are several ways that people can work towards ridding themselves of credit card debts so that they might enjoy financial freedom.

People may try to sell unwanted items and use the money that is earned to pay down their credit card balances. They could also consider getting cheaper vehicles and devoting the payments that they would have paid to their credit cards more quickly. Some people may transfer their credit card balances to cards with lower interest rates or introductory periods, but they should make certain to try to pay off the balances before the introductory period ends.

Many turning to social platforms for help with medical debt

With over a third of 2015 crowdfunding campaigns focused on medical debt, some Florida residents have certainly had to turn to this social platform in a desperate attempt to deal with health care costs. A NerdWallet study looked at this phenomenon and found that only one in ten of the campaigns started actually reached their goal and gained funding.

The study looked at five popular crowdfunding sites to find that the average request for medical debt funding was $15,721. These campaigns made up 41 percent of all campaigns in 2015. Though donations to campaigns may be delivered in part, only 10 percent were seen to reach their goals.

What is Chapter 11 bankruptcy?

Bankruptcy is a legal declaration to help clear the burden when a small business or individual is overwhelmed with debt. It initiates a process where creditors often agree to new, and lesser, payments in effort to recoup some of the money they are owned.

There are different types of bankruptcy within US code, but Chapter 11 is one of the most prominent types declared by businesses because instead of selling assets to keep the ship afloat, it calls for a pause and a re-launch instead.

DMX files for bankruptcy protection

Florida music fans might be interested in learning that DMX has filed for bankruptcy protection in an effort to save his home from foreclosure. The rap star reportedly owes around $2 million in debt.

According to sources, the Chapter 13 bankruptcy petition filed by DMX is his third filing since 2009. The first bankruptcy case that he filed was dismissed by the court for what it termed as unreasonable delays. The court also threw out DMX's second bankruptcy petition, stating that it doubted the veracity of the documents the star had submitted about his financial status.

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