Bankruptcy Law, Consumer Bankruptcy

When Is Filing for Bankruptcy the Best Option?

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.

Consumer Bankruptcy

Fear Holds Many People Back from Ever Filing Bankruptcy

There are many people who can benefit from bankruptcy, but put off filing due to fear and the myths surrounding bankruptcy. Bankruptcy offers consumers a fresh financial start and relief from the burden of debt, but for many, it is the fear of the unknown that holds them back from ever taking the first step. Every year, only a small portion of consumers who could benefit from bankruptcy actually move forward with starting a case.

According to the Federal Reserve Bank of New York, approximately 14 percent (14%) of U.S. households or nearly 17 million consumers owe more than they own. While most of these individuals could benefit from bankruptcy, less than one percent (1%) of them file for bankruptcy annually. In 2020, there were only 752,160 personal bankruptcies filed. 

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.

Coronavirus, COVID-19, Debt Relief

5 Ways to Protect Your Stimulus Check from Creditors

As Americans begin receiving their stimulus checks from the $2.2 trillion CARES Act, many who are struggling with debt, worry this money will be intercepted by creditors seeking payment. More than 80 million stimulus checks have been processed thus far, which is a huge source of relief for the 20 million Americans out of work.

Many creditors view these stimulus payments as a chance to receive payment on outstanding debt, especially those that have already been reduced to court judgments. If a financial institution is given a garnishment order, it is possible they will immediately freeze that amount of money deposited into the account, only providing the consumer a limited amount of time before the funds are taken by the creditor.  However, certain measures can be taken to protect this stimulus money from creditors.

Bankruptcy Law

Timing is Important When It Comes to Filing for Bankruptcy

When it comes to filing for bankruptcy, it is not always a matter of “if” but rather a matter of “when.” Depending on a person’s financial situation, it can pay to properly time out a bankruptcy filing. Whether it is the right time to file for bankruptcy can depend on several factors including whether someone is facing foreclosure, vehicle repossession, wage garnishment, or any of the following.

Mortgage Modification

When someone is facing foreclosure, a few different steps can be taken to delay or even prevent the process. One of these solutions is through a mortgage modification. Homeowners facing foreclosure should try this approach first before filing for bankruptcy.

Bankruptcy Law

How Long Does the Bankruptcy Automatic Stay Remain in Effect?

One of the benefits of filing for bankruptcy is the automatic stay and the protections it offers filers who are facing a multitude of collection calls from their creditors. It can also protect a person from lawsuits, wage garnishment, repossession, and losing valuable property.  As soon as the bankruptcy petition is filed, the automatic stay goes into effect. After this point, creditors and debt collectors are legally barred from attempting to collect on any debt owed by the filer.

The automatic stay will remain in effect throughout the duration of the bankruptcy case from filing to discharge. However, certain factors can affect the automatic stay and how long it remains in effect.

Bankruptcy Law, Medical Debt

University of Virginia Health System Sues Patients, Putting Liens on Homes and Seizing Paychecks

Medical debt remains the leading cause of bankruptcy in America. Thousands of patients at University of Virginia Health Systems (UVA) have seen the devastating consequences of past due medical debt.

Over the course of six years ending in June 2018, the University of Virginia Health System sued former patients over 36,000 times for a sum of over $106 million. The hospital has seized wages and bank accounts of former patients and have put liens on homes and property. This information comes from a Kaiser Health News study, which reviewed UVA Health System’s court records, hospital files, and interviewed hospital officials, as well as former patients.

Credit Card Debt, Debt Relief

How to Protect Your Wages from Credit Card Companies

A credit card company can garnish a person’s wages following a successful judgment, which is why it is important to not ignore collection attempts. While it can be hard to fight wage garnishment after it is entered, consumers do have options to protect themselves in the event this does occur.

Settling the Debt

One of the best ways to avoid a wage garnishment is to work directly with the credit card company or debt collector. Many times, the company may be willing to work with the consumer rather than go through the effort and spend the legal fees to take them to court.

They may require the consumer provide some type of proof that his or her financial situation is solid enough to handle the settlement amount. If the debt is large, they may require some type of security to ensure payment will occur.

Bankruptcy Law, Debt Relief

The Biggest Violations Made by Debt Collectors

Debt collectors can be persistent to the point of becoming threatening or intimidating. However, this does not mean consumers are without rights. The Fair Debt Collection Practices Act (FDCPA) protects consumers from unfair debt collection practices by third-party debt collectors. The law provides when debt collectors can contact individuals, what information they can provide to third parties, and other protections.

In 2018, the Federal Trade Commission received a total of 84,500 complaints regarding debt collectors. The following violations are the most common offenses made by debt collectors.

  1. Failure to Provide Written Verification of the Debt.

Any person who is contacted regarding a debt has the right to get written verification of the amount owed. Under the FDCPA, the debt collector must send written verification of the debt within five days after making initial contact. In that communication, the debt collector needs to provide the amount owed, the name of the original creditor, and information regarding how the individual can dispute the debt. However, many debt collectors fail to follow through on this requirement. Alternatively, many consumers are not aware they have the right to request this information.

Credit Card Debt, Debt Relief

When Can a Credit Card Company Garnish Your Wages?

When someone is facing a credit card collection action, the last thing that person wants is to have his or her wages garnished by the credit card company. However, credit card companies do have the right to garnish a cardholder’s wages, just like any other creditor.

Before credit card debt can be collected, it must be considered delinquent.  At the time a person gets a credit card, he or she enters into an agreement to make monthly payments. If these payments are not made on time, that contract is considered broken and the debt delinquent. Once this happens, the credit card company is within its right to collect on the debt. Normally, missing a credit card payment results in a significant interest rate hike, but if the debt goes unpaid for too long, the credit card company can file a legal action to collection on the debt.

This step is where garnishment comes into play. Credit card companies cannot garnish the cardholder’s wages without first filing a legal complaint to collect on the debt and serving the complaint on the cardholder. The accountholder has a chance to respond to the complaint and file an answer within a set period of time. If he or she does not respond, the credit card company can obtain a default judgment against the cardholder, speeding up the process. However, if the cardholder does respond, the credit card company must prove that the debt is owed at a hearing before a judge.