Tag: Kingcade

Coronavirus, Debt Relief

Mortgage Debt Reaches Record High of $10 Trillion

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The American housing market is booming, even though various aspects of the nation’s economy are struggling due to the coronavirus (COVID-19) pandemic.  During the last quarter of 2020, the nation’s mortgage debt load reached a record high of $10 trillion, according to figures from the Federal Reserve Bank of New York. Low interest rates for home mortgages is a big catalyst for this boom in the housing market.  

Consumers are taking advantage of record low interest rates when making home purchases. At the start of November 2020, mortgage rates reached a 12th record low in 2020.  As a result, mortgage debt jumped by $85 billion between July and September 2020, reaching a high of $9.86 trillion.  

Business Bankruptcy, COVID-19

Stimulus Relief Fails to Save Hundreds of Businesses

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The financial ramifications of the COVID-19 pandemic have been significant for countless businesses throughout the United States.  At the start of the pandemic, federal stimulus funds were issued in various forms to help businesses survive the economic crisis. However, as the virus continues, many of these businesses are being forced to close.  

According to a Wall Street Journal analysis of legal filings and government data, over 300 U.S. companies that received approximately half a billion dollars in stimulus relief have also filed for bankruptcy this year. These 300 companies employ a total of 23,400 workers who are being adversely affected.  

Credit Card Debt

What to Do After Paying Off Your Credit Card Debt

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Credit card debt is a source of stress for many consumers. Once a large balance is accrued, the high interest rates can make credit cards nearly impossible to pay off.  Whether you have been able to pay off your credit card debt or have had the debt discharged in bankruptcy, it is important to modify your financial behavior moving forward.   

Monitor Your Credit Score 

Consumers should monitor their credit reports on an annual basis to ensure that there are no inaccuracies. Once a credit card is paid off in full, that should reflect on the person’s credit report. Additionally, paying down a large sum of debt will have a positive effect on the consumer’s credit score. As the person’s credit score goes up, his or her chances of being approved for financing in the future also improves. After paying off debt, the consumer should check his or her credit report to ensure that this payment is reflected on his or her score. To make sure that the consumer’s credit score improves, periodic monitoring of his or her credit report should also occur.  

Debt Collection

Debt Collectors Will Soon Be Reaching Consumers via Text and Social Media

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Debt collectors will soon have another way to reach consumers. The Consumer Financial Protection Bureau (CFPB) released a ruling outlining how collectors will soon be able to reach consumers via text messaging and social media.  The federal government has cleared the way for collection agencies to send unlimited texts, emails and even instant messages on social media platforms. 

Debt collectors will be required to include instructions on how to opt out of these messages within the text of the communication. The CFPB will also limit collectors to calling consumers to seven calls per week per debt.  

Credit Card Debt, Debt Collection

Debt Does Expire- Here’s Why You Shouldn’t Wait for the Clock to Run Out

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At some point, consumer debt is so old that it is no longer legally collectible. At this point, the debt is said to be past the statute of limitations, meaning no creditor or debt collector can take the consumer to court to collect on the debt. However, even though creditors cannot collect on debt past a certain time period, it does not mean this is the best strategy for consumers to seek in cancellation of this debt.  

Every state has a set of laws that govern how long a party has to pursue a legal cause of action. After the timeline has passed, the individual can no longer file a lawsuit. For debt collection, the statute of limitation hinges on the type of debt. In Florida, the statute of limitations for debts involving written contracts, such as personal loans, is five years. The statute of limitations is four years for debts that stem from oral contracts or revolving accounts, the most common of these being credit card debt. After that point, the creditor is not able to legally collect on the debt. 

student loan debt, Student Loans

Baby Boomers and Higher-Income Earners Carry Largest Amount of Student Loan Debt

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Student loan debt affects more than 44 million Americans, a collective $1.67 trillion in outstanding student loans.  Members of the Baby Boomer generation owe the largest portion of student loan debt, as well as borrowers who earn higher incomes. 

According to a recent study by Fidelity, that surveyed 250,000 outstanding student loans, Baby Boomers owed 33 percent (33%) more debt in 2020 than they did in 2019. The biggest reason for this increase has to do with the number of Baby Boomers who took out Parent Plus loans to help their children and grandchildren attend college.  

Coronavirus, COVID-19, Credit Card Debt

How the Pandemic is Changing Americans’ Credit Card Habits

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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.  

Bankruptcy Law

What Happens When You File for Bankruptcy? 

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The bankruptcy process is meant to give consumers who are struggling financially a fresh start. However, many consumers hold off due to the fear of filing for bankruptcy, even if it is the best option. Bankruptcy cases have both positive aspects, as well as negative ones, that go along with beginning and successfully finalizing a case. It is important to understand how a bankruptcy case works before moving forward with filing so that the person filing knows what to expect.  

Automatic Stay 

One of the most positive aspects of proceeding with a consumer bankruptcy case is the automatic stay that accompanies the filing. As soon as a Chapter 7 or Chapter 13 bankruptcy case is initiated, an automatic stay of all collection efforts against the filer is issued. What this means is the consumer’s creditors are temporarily blocked from moving forward on collecting any outstanding debt. This stay also stops wage garnishments, foreclosures, or completion of legal collections cases. The purpose of the automatic stay is to give the consumer a chance to work with the bankruptcy trustee on determining how various debts should be handled. A creditor can file a request to continue collection even though an automatic stay has been issued, but they can only continue if the request is granted.  

Medical Debt

What Are the Options When You Can’t Pay Medical Debt?

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Medical debt presents a major problem for so many in South Florida. The cost of receiving medical care, even with health insurance, can push a financially stable person into debt. Escaping that debt can be a struggle. The coronavirus (COVID-19) pandemic has pushed countless consumers further into debt, and with a second wave of the virus likely, the problems could be far from over.

Medical debt is the leading cause of approximately two-thirds (2/3) of all consumer bankruptcies filed. According to a recent poll from U.S. News of approximately 1,500 Americans, just under 40 percent of them reported having serious trouble with managing their medical bills with at least one of these bills being sent to collections. Within this group, seven percent have been sued for collection of their medical debt. Six percent of them said they filed bankruptcy due to medical debt. 

Debt Collection

State and Federal Agencies Teaming Up to Combat Illegal Debt Collection

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Debt collection is a profitable business in the U.S., but not all debt collectors follow legitimate, legal collection practices. According to officials from the Federal Trade Commission (FTC), most consumer complaints made annually involve illegal debt collection practices, which is why they have made recent efforts to crack down on these types of tactics. 

In response, the FTC has launched a multi-agency campaign called “Operation Corrupt Collector.” This crackdown campaign focuses on educating consumers on how to identify illegal debt-collection practices, as well as enforcement against debt collectors who are found to be breaking the law.