Tag: debt collection

Credit Card Debt

When Does Credit Card Debt Become Uncollectable?

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Many consumers struggle with credit card debt, with the average credit card user carrying a balance of $6,329. Loss of income, divorce, job loss and other factors can cause credit card debt to spiral out of control. At what point does credit card debt become uncollectible?

The process of credit card debt becoming uncollectible begins when payments stop. Creditors can sell unpaid debt to collection agencies after three to six months. These agencies will attempt to collect the debt, but only 20-40% of the original balance owed.

After this point, if the debt remains unpaid, it becomes uncollectible after several years, depending on which state you live in. In Florida, debt becomes uncollectible when the statute of limitations expires.

The statute of limitations for debt in Florida is five years and begins on the date of the first missed payment or when the liability occurred. After the statute of limitations has passed, the lender cannot garnish wages or sue the borrower to enforce the loan agreement.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges.

Filing for bankruptcy is a viable option for those struggling with insurmountable credit card debt. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills, and personal loans.  There are certain qualifications a consumer must meet regarding income, assets, and expenses to file for Chapter 7 bankruptcy, which is determined by the bankruptcy means test.

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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.

Bankruptcy Law

Can a Debt that was Discharged in Bankruptcy Still Be Collected?

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One of the biggest benefits of bankruptcy is the discharge of debt that comes with the successful close of a case. These debts are erased and wiped clean in bankruptcy, and the filer can walk away with a fresh financial start. However, what happens if a debt collector continues to try and collect on a debt that has otherwise been discharged?

The good news is the consumer has several defenses to help him or her in the event this does occur. For one, the consumer can report the debt collector to the bankruptcy court for violation of the order to not collect on the discharged debt. If the collector is found to have violated the court’s order, they may pay assessed fines, as well as the consumer’s damages and attorney’s fees for having to defend the claim.

Debt Collection

The Best Way to Dispute a Debt and Win

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Consumers facing debt collection often mistakenly assume that they have no choice but to pay the debt they are facing. This is in large part due to the communications they may be receiving from the debt collector. Debt collectors only receive payment from the original creditor when the consumer pays on the debt owed, which is why they will say and do anything possible to get the consumer to make payment. However, consumers do not always realize that they have the right to dispute a debt.

Successfully disputing a debt can be an intimidating concept, but it is possible to dispute the debt and win so long as the consumer knows what to say and what to ask when communicating with them.

Debt Collection

What Consumers Need to Know About Debt Collection Rules ‘Regulation F’

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Several new debt collection rules have been announced by the Consumer Financial Protection Bureau (CFPB). These rules, through what is called Regulation F, offer greater control to consumers over the various method and times they will be able to be contacted by debt collectors.

Regulation F was implemented by the CFPB on October 30, 2020, and December 18, 2020. The regulation was created to interpret the Fair Debt Collection Practices Act (FDCPA). The FDCPA is meant to protect consumers from abusive collection tactics by third-party debt collectors. Regulation F officially went into effect on November 30, 2021. The FDCPA and the regulations included in Regulation F apply only to third-party debt collectors and not original creditors.

Debt Collection, Debt Consolidation, Debt Settlement

Can Settling a Debt Harm Your Credit?

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Escaping debt can be a long, arduous process. Many times, consumers find success in working with the creditor directly on settling the total amount owed, satisfying the debt by paying an amount that is much smaller than what was originally owed. While debt settlement can lift the burden carrying a large amount of debt places on a consumer, it also comes with its negative attributes, as well. In fact, according to new reports, debt settlement can actually end up harming a consumer’s credit score more than it helps.

A debt settlement can lower a person’s credit score by 100 points or more, according to the National Foundation for Credit Counseling. It can take up to seven years to recover from that negative hit.  

Debt Collection

Can a Debt Collector Contact me on Facebook?

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Debt collectors will resort to any tactic possible to contact a consumer regarding an outstanding debt. Traditionally, these communications have come in the form of phone calls or letters, but as technology has advanced, text and email communication have become a common way of reaching consumers. Debt collectors are also resorting to tracking people down through their social media accounts.

A federal agency issued a new rule that allows debt collectors to contact people by email, text message, and social media platforms, including Twitter, Facebook, and Instagram.

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.

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.

Debt Collection

How to Dispute a Debt with a Debt Collector

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Debt collectors can be relentless. They will attempt to contact a consumer through any means necessary to collect on a debt. Financial hardships can be stressful enough but dealing with the additional stress of collection calls can be a large burden in a person’s life.

Surprisingly, this burden is even dealt with by people who don’t owe any debt at all. In fact, according to Forbes, around 52% of debt collection complaints received by the Consumer Financial Protection Bureau in the last year were made by consumers that claimed they were being contacted regarding debts they did not have.

Bankruptcy Law, Consumer Bankruptcy

When Is Filing for Bankruptcy the Best Option?

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Making the decision to file for bankruptcy is never an easy one. Many individuals hold off on filing for fear of what it will do to their credit or worse, fear of the unknown. For many consumers, taking that first step and initiating a bankruptcy case can be the best option for them. The key is deciding when to take that step.

The longer a person stays in debt, struggling to pay bills, defaulting on liabililities, the worse the financial damage will be.  Not to mention the emotional toll it takes.  By not taking action, a person can risk being sued by thier creditors or having their wages garnished. Credit card companies, creditors and even the IRS can take legal action to garnish your wages to pay off outstanding debt.