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July 2017 Archives

Avoid high credit card debt with these strategies

Whether consumers in Florida use a credit card as a matter of convenience or necessity in an emergency, they must be mindful of the details of their credit account. Awareness of the interest rate on unpaid balances is essential. This rate usually falls between 13 and 20 percent, which means that interest charges can add up quickly.

The impact of interest rate hikes

Florida residents who are able to absorb higher interest rates from the Federal Reserve will still benefit from creating a debt repayment plan. Someone who is currently paying off a $5,000 credit card balance at a 15.5 percent interest rate will take 10 years and four months to do so in full. That person will pay $2,286 in interest, but that person would pay an extra $100 in interest if the rate were to increase to 16 percent.

Bankruptcy and investments

Debtors in Florida can use personal bankruptcy, either Chapter 7 or Chapter 13, to manage or settle their debt. However, they should be aware of which of their long-term investments may have to be included in the restructuring of their debt or which may be subject to liquidation.

Feds go after bank and credit card arbitration clauses

People in Florida who have attempted to sue a bank or credit card company very likely could have been thwarted by an arbitration clause tucked into the fine print of their contracts. These terms empower companies to force disgruntled customers into private mediation instead of the courtroom when disputes erupt. If a group of customers raises a dispute, the companies cite the arbitration clauses to prevent the formation of class-action lawsuits.

Rule changes mean increased credit scores for some

Rule changes may result in credit score increases for some Florida residents. Credit agencies are now required to update a person's credit report every 90 days, and new entries must have that person's name, address and birthday or Social Security number. Civil debts as well as some tax liens may be removed from a credit report, which is why some scores will go up.

Pursuing relief when wage garnishment adds to financial troubles

If you are experiencing prolonged periods of financial difficultly, an inability to repay debts might only be one of the issues you face. Along with the potential of constant calls and letters from debt collectors, there are numerous ways in which you may suffer a lesser quality of life, even if only temporarily.

Give debt the old heave ho with a Chapter 7 bankruptcy filing

If you are one of the many Florida residents drowning in debt, and you lack the funds to get on top of it, you may be sitting in front of your computer looking for relief options right now. You've probably seen advertisements for debt consolidation, payday loans, lines of credit and various other band-aid solutions that will likely do more harm than good.

Over half of debt on credit reports from medical bills

Many Florida residents understand the difficulty of meeting medical expenses, and some of them suffer a negative credit rating when unable to pay those bills. When the Consumer Financial Protection Bureau studied the sources of debt on the credit reports of millions of people, it found that a little over 50 percent of the debt came from unpaid medical bills.

U.S. credit card debt set to surpass $1 trillion

The 2008 financial crisis in Florida and across the country was caused in large part by unsustainable levels of mortgage and other debt. Americans tightened their belts during the ensuing recession, but data from the U.S. Federal Reserve suggests that household debt levels in the United States are growing once again. The rise in revolving debt has been particularly worrying to economic experts, and these concerns have not been calmed by reports revealing that the amount owed by Americans to credit card companies is expected to surpass $1 trillion by the end of 2017.

Lawsuits filed in delay of student loan forgiveness regulations

Florida students who may have been defrauded by their colleges may have to wait longer than anticipated for regulations involving student loan forgiveness that would have come into effect on July 1. The "borrower defense to repayment" rules would also prevent colleges from requiring students with complaints to go through arbitration instead of the court system. While regulations already exist that prevent enforcement of student loans if a college has been guilty of misconduct, the Obama-era regulations were intended to make the process clearer and more consistent.

Credit card debt in the United States continues to rise

Consumers in Florida and around the country now prefer credit cards over cash or debit cards to pay for their purchases, and this has led to revolving debt balances in the United States reaching levels last seen in the months leading up to the 2008 financial crisis. Americans now owe more than $1 trillion in revolving debt, which is largely credit cards, according to the U.S. Federal Reserve, and most experts believe that this figure will continue to rise.

Consolidating debt

Florida consumers who are struggling with their financial obligations have several options. Debt consolidation may help pay off high-interest loans such as credit cards, but there are several factors that must also be in place for this strategy to be successful.

Secured creditors must still file timely bankruptcy claims

If a Florida resident has secured debt, the creditor doesn't have to file a proof of claim with a bankruptcy court. However, an Ohio bankruptcy court ruled that a secured creditor must still file a claim on time to be entitled to repayment under a Chapter 13 plan. In a Chapter 13 plan, a debtor uses regularly received income to make payments over a three or five year period.The case in question was filed in September 2016, and involved a creditor called Tax Ease Ohio LLC.

Many students, households have credit card debt

In addition to student loans, college students in Florida may also be carrying significant credit card debt. The student loan debt for 2016 graduates was $37,172 on average. On top of that, students may be paying over $1,000 in credit card interest and fees over the four years they are in college. The average credit card debt for students is more than $2,500. Students also tend to overdraw their accounts more than twice as often as other Americans and must pay overdraft fees when this happens. On top of this, students are graduating into a difficult job market although it is one that is slowly improving.

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