Many consumers handle their finances under the assumption that carrying a balance from month-to-month on their credit card(s) will give their credit score a boost. This common misconception will not only keep the consumer with a credit card balance, but it also may not do anything beneficial for their credit score.
Tag: Miami bankruptcy attorney
Student Loan Debt Relief Scams on the Rise- Here are the warning signs:
Student loan scams existed before President Biden made his executive order regarding federal student loan forgiveness. However, with the latest announcement of widespread student loan forgiveness, the number of scams has increased, significantly. It is important that borrowers know the warning signs to avoid being scammed.
As Fed Increases Interest Rates, Credit Card Interest Rates Should Follow
Credit card interest rates are anticipated to increase after the Federal Reserve increased its benchmark interest rate an additional three-quarters of a point. For consumers who rely on credit cards to keep up with the increasing costs of gas, groceries, and other necessary expenses, this news does not come at a good time.
Understanding the Difference Between Bankruptcy and Debt Consolidation
When dealing with debt, there are different options consumers have available to them in terms of eliminating that debt. When it comes to debt consolidation and bankruptcy, it’s important to understand the differences between these two approaches, as well as the pros and cons of each.
Do I Owe Taxes if My Credit Card Debt is Forgiven?
Certain debt forgiveness can come with financial repercussions, especially when it comes to taxes. This cancelled debt includes debt that was significantly reduced through debt settlement negotiations or debt that was completely cancelled or forgiven by the creditor, including credit card debt.
Consumer Bankruptcy Filings Increase in August
Bankruptcy filings increased in the month of August for all chapters of consumer bankruptcy cases, according to a new study conducted by Epiq. A total of 35,355 bankruptcy filings were reported in August, which represents a 10 percent increase from the total of 32,276 reported in August 2021.
Commercial bankruptcy filings also increased by six percent in August. A total of 1,861 filings were made in August 2022, as compared to the 1,753 cases filed in August 2021. Individual bankruptcy filings increased by 10 percent. A total of 33,494 filings were made in August 2022 and 30,523 were filed in August 2021.
What to Expect Before, During and After Filing for Bankruptcy
The process of filing for bankruptcy can seem daunting and unclear for many filers. The uncertainty behind the process often drives the fear of the unknown, which keeps many people from pursuing a bankruptcy case. Pulling back the curtain and knowing what to expect when filing for bankruptcy can help clear up any myths or misconceptions surrounding bankruptcy.
Making the decision to pursue a bankruptcy case is often the thing that holds people back the most. It can be difficult for someone to admit that they need financial help offered through a bankruptcy case. Many see it as admitting failure, which could not be any further from the truth.
Can I Keep My Retirement Accounts in Bankruptcy?
No one wants to lose their hard-earned savings in a bankruptcy case, especially retirement accounts. In fact, the fear of losing everything is one of the main reasons why consumers hold off on filing for bankruptcy. Most people work hard over the course of many years to build up a nest egg that they hope will carry them through retirement. The good news is retirement accounts are protected in bankruptcy. A law was issued in 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which gave protection to all types of individual retirement accounts, otherwise known as IRAs.
The type of protection depends on the type of IRA. Traditional IRAs and Roth IRAs are protected to a value of more than $1 million. However, SEP IRAs, SIMPLE IRAs, and most rollover IRAs receive full protection from bankruptcy creditors, no matter how much is in each account.
Medical Debt May No Longer Affect Your Credit Score
Relief may be on the way for consumers struggling with medical debt. As of July 1, 2022, the three largest credit bureaus, TransUnion, Equifax, and Experian, are removing cleared medical debts from consumers’ credit reports.
What this means is if the consumer has paid his or her medical bill in full, and that debt is still plaguing his or her credit report, this negative mark will now be removed. This announcement comes as part of a larger endeavor by the Biden administration to either decrease or eliminate medical debt as part of government lending determinations.
Over 40 Percent of Consumers Plan to Take on More Debt Despite Rising Interest Rates
Approximately 43 percent of American consumers say they intend to accrue more debt in the next six months. This is despite interest rates increasing, making the cost of borrowing more expensive. This information comes from a recent study published by LendingTree.
LendingTree surveyed more than 1,000 individuals regarding their spending habits. They found that 61 percent of them already carry some level of debt. Approximately 80 percent of consumer debt is linked to expenses that are considered necessary, such as healthcare expenses or other emergencies.