Fort Lauderdale Bankruptcy Law Blog

You may have learned the hard way that it's always good to keep your debts down to a minimum. Some types of debt, such as a mortgage or car loan, are often a necessary part of life, but others, particularly from credit cards, are best avoided or at least kept as low as possible. However, the lure of a few thousand dollars in credit and a competitive interest rate is hard to resist for many Floridians. Surely it's okay to spend a few hundred on clothing or home furnishings, and pay it off with low monthly payments, right?

A financial planner from Plantation has advised that keeping a credit card balance is a sign that you're living beyond your means, and credit card debt should only be reserved for emergencies. Reducing your consumer debt is an important step toward financial freedom, and also allows you to save more for retirement--which is something everyone should be thinking about.

In many ways, student loans can help out someone in need of college money, who might not otherwise have the chance at an education. Many student loans allow deferment until after graduation. However, jobs aren't always in demand right after someone gets a degree, leaving the borrower in the unfortunate situation of not being able to pay his or her loans.

Many Floridians seeking debt relief have considered consolidating their loans. Loan consolidation has the potential to let those with financial challenges get back on their feet, by combining all of their debt into a single monthly payment with one interest rate. Depending on the type of debt - such as credit card debt, a second mortgage, and vehicle loans - this can be very convenient for overwhelmed consumers. But with student loans, especially if you have more than one, it's important to consider several factors before consolidating them.

The $9.3 billion settlement between major banks and the federal government was supposed to provide aid to homeowners in the struggling economy. The agreement was meant to protect them against the types of abusive foreclosure activities lenders were practicing with the "robo-signing" scandal and other actions. But some Florida consumers, judges, and bankruptcy attorneys claim abuse from big lenders still continues. Several homeowners who thought they had debt relief from either Chapter 7 or Chapter 13 bankruptcy have experienced uncooperative lenders and continued harassment from collection agencies.

A Florida bankruptcy lawyer says judges are starting to get fed up with some banks' refusal to honor court rulings in foreclosures and bankruptcies. An Orlando judge hit Bank of America with a $220,000 sanction for ignoring the court-approved loan modification for an Orange County couple. After the homeowners filed for Chapter 13 in 2010, the bank at first appeared willing to lower their monthly payments to $550, but then they continued billing the couple the higher mortgage amount throughout 2011 and 2012. Bank of America also failed to appear to multiple hearings to resolve the issue.

What will you do with your tax return when it arrives? You may be tempted to spend it, but if you're like at least three quarters of South Floridians (according to a poll by dealnews.com), you'll be using your tax refund to pay down the balances from credit cards and other debt, or adding it to your savings account. With $2,803 being the average tax refund in 2012, your refund has the potential to make quite a dent in either your credit card debt or your savings plan - maybe even both.

Financial experts say many Florida residents may already be taking advantage of their tax returns for this purpose. The average consumer credit card balance dropped 12 percent in January, compared to this time last year. The recession, which has caused lingering financial challenges for millions of people, may be a major motivator in getting people to make wiser choices with their tax returns and other forms of large income.