Debt Collection

What Behavior Is Considered Harassment by a Debt Collector?

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Most people never expect to fall behind on their debts. Sometimes, however, circumstances beyond a person’s control result in them being contacted by a debt collector. This is not uncommon today. In fact, 77 million American consumers or 35 percent of all adult consumers have a debt in collection.

Being on the receiving end of debt collection phone calls and other communication can be extremely stressful. Debt collectors are paid to do whatever they can to get a consumer to pay off a debt, which often results in the collectors trying to reach the consumer through phone calls, emails, texts, and direct mail so much that it borders on harassment. However, federal law prohibits certain behaviors from third-party debt collectors to protect the consumer.

Bankruptcy Law, Consumer Bankruptcy

How Much Debt Do You Have to Have to File Bankruptcy?

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When it comes to filing Chapter 7 bankruptcy, the filer must meet a certain threshold when it comes to his or her debt-to-income ratio and qualify under the means test. However, there is no requirement that the filer carry a certain amount of debt to file Chapter 7 bankruptcy.

Federal bankruptcy law dictates the eligibility requirements to file Chapter 7 bankruptcy. The biggest of these requirements is the means test which compares the filer’s income to his or her debt. The means test is a two-step process. The first step requires looking at the consumer’s income as compared to Florida’s average income. If the filer’s income is higher than the median income for a household in Florida, the filer will need to then take the second part of the means test.

student loan debt, Student Loans

Will Discharging Student Loan Debt Become Easier?

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Student loan debt has traditionally been extremely difficult to discharge in bankruptcy. For years, student loan borrowers and advocates have been pushing for legislation to make this process easier. The Biden administration has made statements indicating they will make this process easier in the future, although it is unclear when or if this will ever happen.

It is not impossible to discharge student loan debt in bankruptcy. The bankruptcy code does allow for it, but the test to demonstrate the need for discharging student loan debt has been difficult for borrowers to prove. Unlike other consumer debts, to receive a discharge from their student loan debt, the borrower must prove that repaying these loans would put an undue hardship on them. Unfortunately, the definition of what qualifies as an “undue hardship” is found within the U.S. bankruptcy code, which means defining this standard has been left to individual courts. Certain jurisdictions have made the standard next to impossible to meet, while others have been somewhat more lenient. Regardless, no consistent standard has been set.

Bankruptcy Law, Consumer Bankruptcy

Do I need a lawyer to file bankruptcy in Florida?

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Filing for bankruptcy can be an uncertain and intimidating process. Going through it alone can make the process that much more daunting. While an attorney is not a requirement for filing for bankruptcy, it certainly helps ensure that a bankruptcy case proceeds smoothly.

A bankruptcy attorney will meet with the client first during a consultation to discuss the person’s financial situation to determine whether he or she needs to file for bankruptcy. Occasionally, it can be in the client’s best interest to wait before filing, but he or she may not realize that until talking through the situation with an attorney.

Debt Collection, Wage Garnishment

Understanding Wage Garnishment

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Wage garnishment is a common tool used by creditors and third-party debt collectors to satisfy a judgment on an outstanding debt. Consumers who are facing the possibility of a wage garnishment should understand what exactly a garnishment means for him or her.

A wage garnishment is a legal procedure ordered by a judge after a court issues a judgment on a debt. The garnishment order allows the consumer’s employer to take a portion of his or her wages prior to the check being given to the consumer to pay back a creditor. Some common types of debt that can lead to a person’s wages being garnished include: unpaid taxes, overdue child support, defaulted government student loans, delinquent credit card loans, and outstanding medical bills.

Bankruptcy Law, Wage Garnishment

How to Stop a Wage Garnishment in Florida

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Wage garnishment is a legal process in which a person’s earnings are required by court order to be withheld by an employer for the payment of a debt.

Filing for bankruptcy in Florida puts an automatic stay on wage garnishment, which immediately stops Florida wage garnishment. The automatic stay lasts for as long as the bankruptcy. With the automatic stay in place, you will be able to take home your entire paycheck.

Foreclosure Defense, Foreclosures

Foreclosure Filings Increase Following End of CFPB Restrictions

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Foreclosure filings reported in January 2022 were up by nearly 30 percent from a month prior and up by over 139 percent from a year ago, according to figures from the U.S. Foreclosure Market Report. A total of 23,204 U.S. properties were reported as having foreclosure filings.

The fact that foreclosure filings were on the rise does not come as a surprise for financial experts who have been keeping an eye on the housing market. Normally, foreclosure filings slow down around the holidays, picking up again after the first of the year. However, this year, the filings were a little more than in previous years, showing more of a spike in filings than a slow increase.

student loan debt

A Divorce May Not Free You from your Ex-Spouse’s Student Loan Debt

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Most people assume that when they get a divorce, they will walk away free and clear from their spouse’s student loan debt. After all, it was the spouse who incurred the debt, so why should the other spouse be on the hook for this debt? Unfortunately, a divorce decree may not be enough to free someone from their ex-spouse’s student loan debt.

One reason a person might find themself responsible for their ex-spouse’s student loan debt has to do with joint consolidation. This federal program was short-lived, but many people took advantage of it while it was available. In fact, nearly 14,000 student loan borrowers participated in the joint consolidation program, which Congress ended in 2006. Joint consolidation allowed married couples to take their separate student loan debts and combine them into one monthly payment with a lower interest rate. However, once these debts are combined, it can be difficult to separate them in the event of a divorce.

Consumer Debt, Credit Card Debt

Consumer Debt Reaches a Record-Breaking $15.6 Trillion

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Consumer debt hit an all-time high at the end of 2021, reaching a total of $15.6 trillion. According to figures from the Federal Reserve New York district, this figure represents a year-over-year increase of $333 billion during the fourth quarter of 2021, as well as a $1 trillion increase for the entire year.

This quarterly consumer debt increase is the largest one seen since 2007. Looking at it from an annual perspective, this increase is the largest one since 2003.

Credit Card Debt

Red Flags That Indicate Dangerous Credit Card Habits

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Credit card spending can quickly become a bad habit that can get out of control. Certain behaviors can end up dragging the consumer deeper into debt. It is important that the consumer identify these spending habits ahead of time and spot red flags before falling deeper into a debt trap.

Many consumers fall into the trap of only making the minimum monthly payment listed on their credit card statements. It can be tempting to make that small payment instead of paying off the balance in full or making at least a substantial payment towards the principal. However, minimum monthly payments only end up covering the interest accrued during that month. In the end, the consumer makes absolutely no progress towards paying down the balance owed, and the consumer will find that the balance never goes down. At the very least, the consumer should make more than the minimum payment on a monthly basis in order to avoid falling into this debt trap.