Tag: Kingcade

Consumer News, Credit Card Debt

Credit Card and Car Loan Defaults Hit 10-Year High

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A number of consumers are defaulting on their credit cards and car loans to the point where the number of defaults reported are the highest seen since the financial crisis. With inflation not nearing an end any time soon and interest rates continuing to rise, the number of consumers defaulting is expected to grow.

This information comes from data provided by the credit agency, Equifax. The agency found that credit card delinquencies have hit 3.8 percent while car loan defaults have hit 3.6 percent. These figures are the highest ones seen in more than 10 years.

Bankruptcy Law, Credit, Credit Score

The Impact Bankruptcy Has On Applying for Loans and Credit Cards

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While not all bankruptcies cause a huge drop in a person’s credit score, it is possible a person’s score could rise after bankruptcy.

A consumer’s FICO score is one of the biggest determining factors in whether a person will receive approval for credit or financing. The FICO score will also help determine the interest rate a person receives on a credit card. Some lenders are willing to accept credit applications even with lower scores. However, if this happens, it is unlikely that the terms of the credit application will be favorable to the consumer.

The bankruptcy filing may or may not have a significant impact on the consumer’s credit score, depending on what the score was before the filing. The consumer’s payment history makes up approximately 35% of the person’s credit score. If the person had a poor payment history to begin with, the bankruptcy filing will not have as much of a noticeable impact on the score. If the person had an excellent credit score previously, the effect the bankruptcy will have on the credit score will be more significant.

Bankruptcy Trends, Business Bankruptcy, Consumer Bankruptcy

Bankruptcy Filings on the Rise

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Local courts are seeing a 10 percent increase in bankruptcy filings, according to a recent United States Courts report.

According to the report issued on July 31, the number of personal and business bankruptcy filings increased by this percentage in the 12-month period ending on June 30, 2023. The Administrative Office of the U.S. Courts reported that a total of 418,724 bankruptcy filings were made in the year ending June 2023, as compared to the 380,634 filed in the year ending June 2022.

Bankruptcy Law

What Assets are Exempt in Bankruptcy?

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Bankruptcy filers often fear losing everything they own when going through a Chapter 7 or Chapter 13 bankruptcy case. You may think that filing for bankruptcy means you have to give up your home, your car, and other important assets.  This is simply not true. The vast majority of Chapter 7 cases are no-asset cases, meaning the debtor gives up no possessions. This happens for two reasons. First, you can allot for basic assets, called exemptions that are necessary for day-to-day living. What you can exempt varies from state to state, so be sure to discuss exemptions with an experienced bankruptcy attorney. For possessions that are not part of the exemption, creditors likely don’t want them.  Under Chapter 13, you keep all of your assets, but the value of them figures into your repayment plan.

The U.S. Bankruptcy Code and Florida bankruptcy laws protect a great deal of a consumer’s property, if used appropriately.

Medical Debt

Medical Credit Cards Drive Patient Debt and Inflate Costs of Health Care, according to CFPB Report

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The Biden administration has issued a word of caution to consumers about the growing concerns they have behind medical credit cards and other loans used to pay down medical bills. These concerns have been expressed in a new report published, which warns consumers that high interest rates on these cards can only increase the patient’s debt and eventually threaten their financial situation.

In the report, issued by the Consumer Financial Protection Bureau (CFPB), they reported that U.S. consumers paid $1 billion in deferred interest on medical credit cards and other types of medical financing between the years 2018 and 2020. The interest rates on these cards can be particularly high, which is why the CFPB found that medical credit card interest rates can inflate medical bills by approximately 25 percent (25%).

Consumer Bankruptcy

What Property Can You Keep in a Chapter 7 Bankruptcy?

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The fear of losing everything is a very real fear for many bankruptcy filers. However, this is one of the most common bankruptcy myths, and can keep individuals who are drowning financially from filing for bankruptcy. One concern many filers have is, what will happen to my property during bankruptcy?

The good news is Florida bankruptcy laws offer generous exemptions which allow individuals to keep various types of property. If an item of property falls under one of these exemptions, this means that the person can keep the property after filing for bankruptcy. Property that does not fall under one of these exemptions is considered nonexempt and can be sold by the bankruptcy trustee and used to pay down qualifying debts.

student loan debt, Student Loans

What the Debt Ceiling Deal Could Mean for Student Loan Borrowers

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The Biden administration and Congressional leaders reached a deal last week regarding the debt ceiling, one that will now have significant consequences for student loan borrowers. Once the agreement is signed into law, payments on all federal student loans that have been on pause since the start of the COVID-19 pandemic will be reinstated as of August 2023.

This deal affects approximately 43 million student loan borrowers who must now figure out how to make these payments after receiving relief for years since 2020.

student loan debt, Student Loans

Where You Can Get Student Loan Debt Forgiveness if Biden’s Debt Plan Fails

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If President Biden’s student loan debt cancellation plan is struck down by the U.S. Supreme Court, borrowers still have options available to them through individual state forgiveness plans.

In fact, 47 states and Washington, D.C., have their own programs, while many of them offer more than one loan forgiveness program. Every program is different with its own unique set of requirements, many of which are tailored to one profession or one specific industry. Additionally, like the Public Student Loan Forgiveness Program, many of them require the borrower to work in a specific industry for a set period of time.  However, if the Supreme Court does end up striking down Biden’s proposed program, these state programs may be the only option available to borrowers.

Credit Card Debt, Credit Score

How Credit Card Debt Impacts Your Credit Score

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Most consumers utilize a credit card at some point in their lives, and many of them carry credit card debt from month-to-month. While using credit cards responsibly can help increase a person’s credit score, having too much credit card debt can cause significant harm to that score.

The amount of debt you owe on your credit card is one of the biggest factors affecting your credit score. That’s why it is never a good idea to max out your credit card. And when your credit score goes down, you could end up having to pay higher interest rates on loans or any other credit you apply for. A low credit score can impact your applications for apartment rentals, cell phone plans, and more. Research by the Consumer Financial Protection Bureau has indicated that high income earners are as prone to financial stress because of debt as low-income earners.

Debt Relief

Debt Relief: Understanding the Options and Consequences

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Debt relief can ease the burden of overwhelming financial pressures. People with debt are more likely to face mental health issues, including prolonged stress, anxiety, and depression. To break free from the financial burden of debt, several different debt relief options are available for consumers. However, debt relief programs are not the right answer for everyone, and it is important to understand the implications, including both the positive and negative aspects of each form of debt relief before proceeding.

When to seek debt relief