All bankruptcy attorneys are not created equal. Schedule A Free Case Evaluation
Nowack & Olson, PLLC
Let’s do this together.
Speak with one of our professionals.

Bankruptcy Law Blog

Ways people may be vulnerable after a credit freeze

Florida residents may have been impacted by the Equifax breach that may make them and others vulnerable to identity theft or other fraud. In response, some may choose to put a freeze on their credit reports. However, this may not offer the level of protection that an individual may believe it does. While it may be difficult for new accounts to be opened in a person's name, it is still possible for fraud to occur on existing accounts.

To protect against fraud on existing accounts, it may be best to set up account alerts or use multi-factor authentication. If a criminal has a person's Social Security number, it may be possible to commit what is known as medical identity theft. In such a scenario, a scammer will obtain care under another person's name, and that person may become responsible for any bills incurred.

Credit card delinquencies on the rise nationwide

Several large credit card companies and banks that operate in Florida and other parts of the U.S. are reporting increased credit card delinquency rates. Levels of non-payment remain below where they were during the financial crisis of 2008 and 2009. However, banks reported increased delinquencies in July and August of 2017 after reporting decreasing non-payment levels for four consecutive months prior to that.

For August 2017, JPMorgan reported an increase in credit card delinquencies to 1.16 percent. Discover reported a 2.1 percent rate of delinquency for August and a 2 percent rate in July. Capital One said its credit card delinquency rate in August was 3.97 percent, compared with July's rate of 3.81 percent. The rates of credit card delinquency overall for United States banks was 2.47 percent for the second quarter of 2017. According to data provided by the New York Federal Reserve, the rate was 2.2 percent for the second quarter of 2016, meaning delinquency rates increased overall year-over-year.

A closer look at debt relief options

Florida residents and Americans in general have reverted back to spending habits last seen prior to the Great Recession. Credit card debt in particular may be worth tracking carefully as interest rates on credit cards are usually higher than on other debts. Carrying balances on those cards could make it harder to save for retirement or meet other long-term goals. The best way to start getting out of debt is to acknowledge it exists.

Ideally, an individual will make a list of balances owed as well as the interest rates on them. It is then worthwhile to see if there is room in the budget to make more than the minimum payment. For those who can pay more than the minimum and have total credit card debt payments that are less than 15 percent of their income, the debt snowball or avalanche methods may work best.

Should you use retirement funds to cover outstanding debts?

befuddled older man.jpeg

Considerable debt presents many struggles that can leave you feeling at a loss. Although a variety of seemingly beneficial debt relief options exist, you may wonder which could work best for you. You may even have concerns regarding the legitimacy of some of those relief options. Because a lack of information may leave you feeling apprehensive, you may consider dipping into your retirement accounts instead.

At first, you could think that this option seems obvious and wise as you need money to cover your outstanding debts and funds exist in your IRA and 401(k). However, there are many downsides to withdrawing funds from your retirement accounts early.

The problem with accumulating too much credit card debt

In the first quarter of 2017, Americans reduced their credit card debt by a combined $30 billion. However, Florida residents and other Americans put $33 billion back on their credit cards in the second quarter. It is estimated that another $60 billion in new credit card debt will be accrued by the end of the year. If that happens, Americans will have in excess of $1 trillion in such debt.

Credit card balances generally don't pose a problem if they are paid off in a timely manner. However, if they are not, increasing balances that must be paid off with interest may be harder to keep up with. Currently, the average interest rate on a credit card is about 16 percent, and it could go higher if the Federal Reserve raises the prime rate in the future.

How debt consolidation helps debtors

Florida residents who are looking for an easier way to pay off debt may benefit from debt consolidation. A consolidation loan allows an individual to take many debt payments and combine them into one monthly payment that usually carries a lower interest rate. One option to consolidate debt may be to put existing balances on a credit card that charges 0 percent interest.

It may also be possible to work with a debt consolidation company. These companies are monitored by the Consumer Financial Protection Bureau, which vouches for the legitimacy of a given organization. It is important that an individual understand the difference between a debt consolidation firm and a debt settlement company. Debt settlement companies work on a person's behalf to negotiate new terms on existing balances.

How to tell if a debt collector is legitimate

When a Florida resident receives a call from a debt collector, it could be a valid collector trying to collect a debt based on incorrect information. It could also be a scammer trying to dupe an individual into handing over their cash. To determine if a debt collector is legitimate, it is important to understand the restrictions placed on them by the Fair Debt Collection Practices Act.

When contacted by a debt collector, an individual should ask for information such as the caller's name and the company that he or she represents. Individuals should also ask the supposed debt collector to confirm the name and address of who it is trying to reach. If a debt collector is legitimate, it should have that information available and share it with no qualms.

Benefits of bankruptcy: Is it right for you?

If you are constantly dealing with overwhelming financial burdens, like many others, you may be in search of relief from the hardships of debt. Suffering through prolonged periods of monetary struggles can have a significant impact on your quality of life, but you may also have some concerns about how a bankruptcy will affect your future.

However, some of your concerns may be unwarranted or unnecessary. If you take the time to consider the numerous benefits of Chapter 7 bankruptcy, you may be able to overcome your hesitation and begin pursuing a healthier financial freedom.

Growth of problems in credit card debt market

Many Florida residents find themselves in need of a fresh financial start regardless of the broader economic climate. So far in 2017, consumer access to credit has continued expanding, and there have been further increases in credit limits for the most responsible borrowers. Despite some observers suggesting these developments point to a strong labor market and increased productive activity, a growing number of consumers appear to be using credit card debt to put off financial troubles.

One piece of evidence for this trend is the delinquency rate. When consumers are delinquent on credit card debt, they can face a drop in their credit score. The delinquency rate was 1.5 percent during the first quarter of 2016. By the first quarter of 2017, it had risen to 1.69 percent.

FTC sues debt collection company that harassed consumers

Some Florida consumers who have paid off debts may have been targeted by collectors who were charging them with debts they did not owe or that the collectors lacked authority to collect. On Aug. 24, a federal judge placed a temporary restraining order on a North Carolina debt collection company that is being sued by the U.S. Federal Trade Commission. The FTC says the company used deceptive practice and intimidation to collect debts that either were not owed by the people they collected them from or that they did not have the right to collect.

According to the FTC, the company used names that sounded like law firms. They did not tell consumers they were debt collectors, and they used profanity and threatened people with legal action or arrest. In all, consumers paid them over $2.1 million. Not everyone who paid up was tricked by their tactics. Some simply paid to get the company to stop the harassment.

We take your situation as seriously as you do.

Start with a Free Case Evaluation

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

What Our Clients Say:

  • "Maria please let Attorney Olson know how pleased I am with the results of my home loan modification with Bank of America. I am so grateful for all of their hard work, especially since my house was a gift from my parents, I prayed not to lose it to foreclosure....."

    Cassandra M.
  • "We received last Friday our bankruptcy discharged letter for the trustee.
    We want to thank you very much for your services in our bankruptcy file.
    We are very pleased and happy with your service, you are so professional, courteous, organized and fast.

    We will recommend you every time we can.
    God Bless You!"

    Yazmin & Ricardo D.

    Tonya C.
  • "I was very pleased with work of Nowack & Olson, and way you guide me through all process of bankruptcy and loan modification. I received good care and was informed on every step of it. Thank You very much. You save my life!"

    Kasia D.
  • "Just wanted to thank you again for helping my wife and family through a tough time. We are finally starting to get back on our feet and building back our nest egg. We have stabilized our income again, and see the light at the end of the tunnel. I remember one of your tag lines was helping good people through bad times... That always rang true with us....."

    Peter R.
  • "After a rather distasteful experience with a Foreclosure Attorney I was apprehensive to say the least to hire an Attorney to handle our Bankruptcy. After some internet searches and research I found Christian Olsen, and after our initial consultation my wife and I retained his services....."

    Bobby and Tanya
  • "I am a teacher who reaped the rewards of a profitable side business until shortly after the recession. I struggled to keep my business afloat until I finally threw in the towel. Between personal and business debt, I was suffocating in bills....."

    Richard C.
Read More Testimonials

Privacy Policy | Business Development Solutions by FindLaw, a Thomson Reuters business.