Credit Card Debt

How Credit Card Debt Affects Your Health

Credit card debt can cause a lot of damage, and not just to your credit score. Credit card debt can cause stress and wreak havoc on relationships. It can also lead to depression, anxiety, and other health problems. Once you are in debt, reaching your financial goals becomes much harder. Spending money paying debt leaves you with less money for retirement savings, purchasing a home, and achieving other financial milestones.

According to a recent study, carrying significant debt can lead to more than just a bad day. Researchers followed a group of baby boomers, starting when they were between the ages of 28 and 40 and then checking in with them again in their 50’s and older. The group was then separated into subgroups based on how much unsecured debt they had. According to the data, the more unsecured debt a person had, the higher level of physical pain he or she lived with when compared to individuals in the other groups.

This study is not the first one conducted on the effects of debt on consumers’ overall health. This research, however, does show that a link exists between physical pain and how much debt a person is carrying.

The study evaluated the financial and health situations of 7,850 people within the Baby Boomer generation, originally starting with their responses the 1979 National Longitudinal Study of Youth. The researchers found that individuals who consistently carried high debt levels had a 76 percent greater chance of reporting daily chronic pain in their lives as compared to consumers who reportedly had very little to no debt.

Even individuals who had taken steps to reduce their overall debt load reported higher levels of physical pain with a 50 percent higher chance of individuals within this group feeling chronic pain.

Several different factors can play into why debt has such a negative impact on a person’s health. If a person has a significant amount of debt, he or she likely has fewer resources to use towards other areas of his or her life that would help prevent any medical issue, including adequate healthcare and preventive medicine.

Additionally, debt can lead to extra stress on that person, which can result in higher blood pressure, depression, anxiety, and other serious health issues.

It is for this reason that experts recommend consumers rid themselves of their debt load as much as possible, whether this be through payment plans with the creditors, debt consolidation or filing for bankruptcy.

When it comes to filing bankruptcy, secured debt is handled differently than unsecured debt. If you are filing a Chapter 7 bankruptcy case, unsecured debt normally ends up being discharged at the end of the case, while secured debt can stay with the asset. If you are struggling to pay unsecured debt, such as credit cards or medical bills, filing a Chapter 7 bankruptcy case may be a viable option for dealing with the debt. If you are struggling to pay for both secured and unsecured debt, a Chapter 13 bankruptcy case may be a good option to allow you to continue paying on your mortgage and stay in your home while discharging unsecured debt at the end of the payment period. An experienced bankruptcy attorney can evaluate your financial situation, after looking at the different types of debt you are carrying to determine which plan is best for you.

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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Debt Collection, Debt Relief

Understanding Zombie Debt and the Statute of Limitations

Consumer debts have what is called a statute of limitations. This is the amount of time the creditor can use the court to force a consumer to pay a debt. After the statute of limitations has expired on a debt, it is no longer legally enforceable. Occasionally, however, a consumer may be contacted regarding an old debt by a collector who hopes the consumer will ‘restart the statute of limitations.’

Zombie debt is debt that the consumer thinks is “dead,” meaning it is past the statute of limitations that the debt collector is now trying to bring back to life. While the debt collector cannot take the consumer to court to collect on the debt, there are no laws saying they cannot continue to contact the consumer to collect what is owed. Many times, debt collection agencies will purchase expired debt to turn a profit. Since the cost to buy expired debt is exceptionally low, even if they collect on a handful of accounts, they are still earning a profit.

Consumer Bankruptcy, Debt Relief

Defaulting on Debt v. Filing Bankruptcy

It can be tempting to want to walk away from debt in lieu of filing for bankruptcy. But doing so will not provide the consumer with the clean slate that a bankruptcy discharge offers. It is often better to face these debts in a Chapter 7 or Chapter 13 bankruptcy case instead of choosing to default on them.

Whenever a consumer fails to make payments on a loan or financial obligation, this failure to pay is otherwise known as a default. Lenders all have their own requirements on what exactly qualifies as a “default,” including how many payments have been missed before the account is officially considered in default.

Bankruptcy Law

What is a ‘No Asset’ Chapter 7 Bankruptcy Case?

In a no-asset Chapter 7 bankruptcy case, the person filing for bankruptcy keeps all of their property because it falls within the exemptions provided under federal law or the law in their state.

With a Chapter 7 liquidation bankruptcy, a filer surrenders their assets to the bankruptcy estate, which uses them to pay off creditors. But in reality, this is only true of non-exempt property. Many of our cases, are in fact, ‘no asset’ cases. Bankruptcy law recognizes that filers need to retain some property so they can survive the process with something on which to build a future after bankruptcy.

Bankruptcy Law, Credit Score

When Can I Apply for a Credit Card after Bankruptcy?

The type of bankruptcy can affect how soon someone can apply for a credit card after bankruptcy. A Chapter 7 bankruptcy case allows the consumer’s debts to be discharged fairly quickly, within a few months, after non-exempt assets are liquidated and used to pay off the filer’s debts.

A Chapter 13 bankruptcy case takes longer than a Chapter 7 case since it involves a three-to-five-year long repayment plan where the consumer works with the bankruptcy trustee on paying down qualifying debts while discharging what is left at the end of the repayment period.

Credit Card Debt

The 5 Best Ways to Pay Down Credit Card Debt during COVID-19

The coronavirus pandemic has compounded the stress of credit card debt for many Americans today.  Consumers have relied more than ever before on their credit cards to cover bills and necessary purchases due to the financial impact related to job losses and shutdowns.  The following methods can prove to be helpful for consumers looking to pay down their credit card debt during the COVID-19 crisis.  

Debt Snowball Method 

One method of paying down credit card debt which many consumers have had success with is known as the debt snowball method. This method works by focusing all payments on the credit card with the lowest balance first, while making minimum payments on all others. Once that card is paid in full, the consumer then focuses on the one with the next lowest balance, and so on, until all credit cards are paid off in full. By taking the smallest balance first, the consumer is likely to see progress being made paying down his or her debt. Seeing the actual progress can be motivation to keep paying down all remaining credit cards. This method is not a quick fix, however, although it does work successfully over time.  

Coronavirus, COVID-19, Credit Card Debt

How the Pandemic is Changing Americans’ Credit Card Habits

The coronavirus (COVID-19) pandemic has changed the way of life for consumers in both good and bad ways. One change has to do with the way Americans utilize their credit cards post-pandemic. 

A recent study conducted by Money and Morning Consult surveyed how American consumers have been using their credit cards during this crisis. What the study found was Americans are continuing to use their cards. However, the way by which they are using their cards has changed.  

student loan debt, Student Loans

ITT Tech Student Loan Lender Must Pay $330 Million in Debt Relief to Former Students

An agreement has been reached between the attorneys general from 43 states and the now-closed ITT Technical Institute (ITT Tech). This agreement was part of a lawsuit brought by former ITT Tech students, requesting approximately $330 million in student loan forgiveness for 43,000 loans.

This lawsuit was a joint legal effort brought on by the Consumer Financial Protection Bureau (CFPB) and 43 different states. The settlement was made with PEAKS Trust, a private lending institution that is run by ITT and is also affiliated with several Deutsche Bank entities.

Credit Card Debt

What Happens to Credit Card Debt When a Person Dies?

After an individual dies, one of the big questions that comes up from those handling the estate of the deceased is what happens to that person’s debt? These debts can include medical bills, taxes, and credit card debt. One of the main concerns brought up by clients is whether they will be personally responsible for the credit card debt of their deceased relative. The good news is only the estate will be responsible for any outstanding debt and not the family of the deceased.

Whether the person has a will or no will, his or her estate will need to be processed through probate court. If the deceased had a will, he or she will have named a personal representative who will handle the estate, and if the person has no will, the court will appoint someone to administer the estate.

Debt Collection, Debt Relief

Stopping a Wage Garnishment Once It Has Started

When dealing with a collection on a debt, the last thing a consumer wants is to face a garnishment of his or her wages to satisfy the debt. Many times, once the wage garnishment process has started, consumers fear that it is too late to do anything to stop it. It can be stopped, however, with quick action and the right steps taken.

Contact an Attorney.

The laws surrounding how to properly object to a wage garnishment can be complicated, and unless the individual is savvy with the legal system, costly mistakes can be made. Even if the person’s wages have already been garnished, consulting with an attorney is still advisable. The key is to act quickly since the law only allows a short window of time for a person to object to a legal proceeding.