Being contacted by a debt collector can be an extremely disturbing experience, as it is often a sign that you are facing serious financial challenges. And while having any kind of contact with collection agencies can be uncomfortable, you as a consumer can actually find yourself subject to illegal collections practices. That is why it is so important to be able to recognize improper debt collector conduct when it occurs.
Having served the residents of Florida for more than 15 years, we here at Nowack & Olson PLLC understand how difficult it can be to choose the most appropriate form of debt relief for your unique situation. Chapter 13 bankruptcy is known to be one effective personal bankruptcy option, and is distinguished from Chapter 7 bankruptcy by several key factors.
Both Chapter 7 and Chapter 13 bankruptcy are capable of discharging unsecured debts, such as credit card debt and other personal loans. However, filing for Chapter 13 can allow you to maintain ownership of certain kinds of property, while still lowering the amount that you owe on those loans. For instance, you may be able to keep your car and/or house once those loans are adjusted through bankruptcy to lower your monthly payments.
The vast majority of people that consider filing for bankruptcy in Florida take the decision very seriously and only file after they have exhausted other options. Unfortunately, however, there are instances where people attempt to take advantage of the debt relief system. Bankruptcy fraud is a major offense that can result in serious legal penalties.
One woman was recently charged with two offenses relating to bankruptcy fraud. She was accused of third-degree theft for failing to properly declare funds in her bankruptcy filing, which could result in a monetary fine of $150,000 and a prison sentence of up to five years. The other charge is fraud in insolvency in the second degree. That conviction could be accompanied by similar monetary penalties and a prison sentence of 10 years.
Countless people across the state of Florida and the entire country live paycheck to paycheck, unable to accumulate savings or fully establish their financial security. And while using credit cards allows many people to pay for necessities, relying primarily on personal lines of credit to cover monthly expenses can quickly result in serious financial difficulties. Provided below are several warning signs of excessive consumer debt.
While financial advisors recommend that people put 10 percent of their income into savings, the U. S. Bureau of Economic Analysis recently estimated that most people only save a little over 5 percent. If people are not contributing to their savings, and are instead primarily maintaining their lifestyle by relying on credit cards, they may be contributing to an unstable financial situation. Instead, the goal should be to invest one’s energy and money into lowering credit card debt.
Many people who have completed the Chapter 7 bankruptcy process understand that it is an effective form of debt relief. That being said, eliminating one’s financial history means that a person has to reestablish his or her credit rating and confidence in the eyes of lenders. There are several things that people can do as they begin the process of reestablishing their financial footing following personal bankruptcy to help ensure they get the most out of the experience.
Bankrate explains that filing for Chapter 7 bankruptcy can actually improve the borrowing status of a person. Despite the fact that bankruptcy initially has a negative impact on a filer’s credit rating, it also often drastically improves a person’s debt-to-income ratio. That alone can contribute to the rebounding of a credit rating, and lenders may also be encouraged by the fact that recent filers cannot pursue bankruptcy again for years to come. Therefore, recent filers should be encouraged to begin reinventing their credit history.
Just as countless families across the state of Florida are well acquainted with the difficulties associated with incurring a substantial amount of student loan debt, economists and legislators alike are showing increasing concerns over the impact such debts are having on Americans of all ages. Recent findings suggest that one specific demographic of Americans is taking on significant amounts of student loan debt is especially troubling to many, particularly because debt relief options like personal bankruptcy cannot currently help the situation.
The Department of Education estimates that the average annual cost of higher education is up to almost $24,000, and has increased by more than 20 percent in the past 10 years alone. It’s also estimated that over $1 trillion in student loan debt is owed by around 40 million people in the U. S. The huge amount of student loans carried by Americans is having a significant impact on people’s lifestyles and standard of living, affecting everything from the age at which people retire to the amount of savings people have when they retire.
Beyond the fact that most people are taught from a very young age that it is generally inappropriate to talk about one’s personal finances, Florida residents confronted by the possibility of filing for bankruptcy are sometimes embarrassed or ashamed by their financial difficulties. It’s important to recognize, however, that bankruptcy can be a long and emotionally draining process; surrounding oneself with supportive people and constructive thoughts can go a long way to help ensure that the entire experience is a positive one.
One of the most important things that people can do to help themselves effectively navigate the bankruptcy process is to seek the company and counsel of a trusted friend and/or relative. Of course, professional advice is also recommended, but sometimes the most useful feedback is that which comes from a truly sympathetic party. Attempting to conceal one’s concerns and insecurities about financial issues often does little to ease them, and loved ones are usually eager to help on an emotional level.
Major financial issues often originate from a series of minor difficulties that quickly escalate out of control. In fact, many Miami residents currently considering their debt relief options may concede that their debt became unmanageable before they had the opportunity to properly address it. Personal savings is often the first thing that people rely on to cover their expenses, and retirement savings may be the thing that takes one of the largest hits as a result.
In its efforts to stabilize the national economy following the recent recession, the Federal Reserve lowered interest rates. And while doing so is believed to have had a positive impact on some aspects of the economy, it is also negatively affecting some people attempting to save for retirement. The issue is compounded by the fact that there is evidence to suggest that a huge number of Americans do not have any retirement savings at all, according to a recent study.
While it is true that personal bankruptcy is intended to account for substantial amounts of debt, the process is not designed to compromise the financial security and/or personal integrity of filers. As a result, Florida state and federal guidelines regarding bankruptcy exemptions are in place to allow for the reasonable comfort and independence of people that file for Chapter 7 bankruptcy.
Chapter 7 bankruptcy differs from other forms in the way that it involves the liquidation of assets to eliminate personal debt. As a result, many kinds of personal property are subject to bankruptcy proceedings. Findlaw explains, however, that bankruptcy law policies regarding exemptions protect several types of assets. It is worth noting that bankruptcy exemption guidelines in the state of Florida do vary from those in other states. For instance, the Florida Bar Association notes that there is no cap on the value of the state’s Homestead exemption as long as the property meets other requirements.
During hard economic times, some Florida residents are compelled to declare bankruptcy as a way to gain financial freedom from uncontrollable debt. As part of the bankruptcy process, people are required to list their assets and property as well as their debt. The trustee assigned to the case has the ability to reclaim certain property items from the debtor and distribute the funds to the creditors. However, not all property is eligible for seizure.
Although the federal government has a set of bankruptcy exemptions, each state is able to set their own standards as to what can be repossessed, as well as what items are exempt. In the majority of states across the country, nonspousal inherited IRA accounts can be used to repay creditors following a bankruptcy. Yet in seven states, including Florida, IRA funds that have been inherited from a person other than a spouse are protected from reclamation.