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Are you being targeted by debt collector harassment?
As a resident of Maryland, you may be looking into debt relief options. Your decision-making process could get impeded or sped up due to the harassment you may be facing at the hands of debt collection agencies.
Though it is illegal for debt collectors to harass you, they do not always follow the law. In these situations, is there anything you can do to relieve the burden of debt?
What is the Fair Debt Collection Practices Act?
The Consumer Financial Protection Bureau discusses the Fair Debt Collection Practices Act (FDCPA). This act came into existence when debt collectors began growing too aggressive in their pursuit of money. Under FDCPA, certain tactics of gaining payments became illegal. This included anything that oppresses, harasses or abuses you or anyone else debt collectors contact.
Some examples of the harassment you may face includes:
Use of profane or obscene language
3 tips on dealing with the stress of debt
Persistent stress takes a toll on your health, that is why you should minimize your stressors in life, including those surrounding your debt. Know that you are not alone in your struggles. Many Americans worry about the state of their finances.
If thoughts of your future overwhelm you because of debt, know that you can take steps to feel less hopeless.
Accept the blame for your debt
Although it might not be an easy step, accepting the blame for your debt will help you get to the bottom of the issue. The acceptance will feel empowering and through figuring out the root of your debt, you set yourself up for success. As part of taking responsibility for your debt, you can work with professionals like a CPA or financial planner to give you guidance.
Celebrate your progress towards debt elimination
You should try to decrease personal shame and isolation as you work towards debt elimination. Share your ups and downs with your friends and family. Not only will this create a special moment with your family, it will also help destigmatize debt. Small celebrations at milestones serve as inspiration to keep going.
Why are more older adults filing for bankruptcy?
Aging often comes with several health, medical and mental issues, but older adults often face financial hardship, too. In recent years, more older adults filed for bankruptcy to cope with their mounting money struggles.
MarketWatch explores the reason behind the tide of bankruptcy filings. Determine whether your or an older loved one's current financial state could lead to bankruptcy.
Medical issues
Older people often experience several health problems that require professional care, such as hearing, dental and eye issues. Medical complications often come with substantial costs, which can drain a person's insurance, personal savings and any other payment methods in place. Federal programs such as Medicaid and Medicare help, but they either do not cover all medical costs or have strict financial and asset restrictions in place that may disqualify a person from applying. Additionally, copays, deductibles and coinsurance can further strain one's finances.
Tax debts and Chapter 7 bankruptcy
Perhaps tax debt contributes to your overwhelming financial pressures, and you wonder whether filing a Chapter 7 bankruptcy can help. The answer is, it depends.
Here are some of the factors that affect whether a bankruptcy court will discharge the tax debt.
The type of tax debt
The IRS notes that you may be able to include your past income tax debts in your Chapter 7 bankruptcy, but most other types of tax debt are not dischargeable. These include property taxes, payroll taxes and trust fund taxes.
You cannot include any income tax debts for which you did not file returns. You may be able to include the penalties on dischargeable tax debt in your bankruptcy.
Eligibility for discharge
Requirements include these three factors:
- You filed tax returns for the relevant years at least two years before you filed for bankruptcy
- At least 240 days before you filed the bankruptcy, the IRS assessed your tax debt
Prepare for a credit card free holiday season
After filing Chapter 7 Bankruptcy, a person will lose his or her credit cards. While it is possible to rebuild credit following a bankruptcy, Forbes suggests that there are ways to live without a credit card.
When you have months to prepare, this is true for the holiday season as well. Here is how you can prepare for the holidays without the use of a credit card.
Earn rewards
Many people rely on credit cards for their rewards systems. Did you know that retail stores often provide rewards systems too? If you shop regularly at different retailers, investigate membership and reward programs. You can stock up on points throughout the year and use said points to help with Christmas gifts. Loyalty programs can help provide you with discounts on food and travel. Most of these programs do not require you to have a credit card.
Create a budget
Your holiday budget can begin in the summer before the holiday season. Budgets are important for financial management. Without a credit card, they are even more important. The holidays involve several expenses, explains NBC News including:
The mental advantages of Chapter 13 bankruptcy
Filing for Chapter 13 bankruptcy carries various benefits, such as granting freedom from debt and opening up new opportunities. However, bankruptcy is advantageous in other ways as well. For example, many people benefit from a mental point of view. Successfully working through bankruptcy often brings stress relief and helps people struggling with depression as a result of their finances.
If you are considering bankruptcy, it is important to think about all of the ways in which your life would turn around by eliminating debt.
Depression, anxiety and bankruptcy
Those who work through a Chapter 13 bankruptcy properly often feel less stressed out once the process is complete. For those with depression, or feelings of hopelessness, this is also true in many instances and a lot of people feel more positive and optimistic after they get rid of debt. Sometimes, people who have emotional challenges feel even more stressed out prior to filing for bankruptcy because they are unsure of how to approach the situation. However, many feel very relieved once their bankruptcy is over.
Will I lose my home if I file bankruptcy?
If you are in the process of considering bankruptcy, it is likely that you have multiple financial concerns. Many people are aware that filing bankruptcy can lead to asset loss. Thus, one of the most common concerns bankruptcy filers have is if they will be able to keep their homes after they file bankruptcy.
In many cases, you will be able to keep your home after bankruptcy. According to FindLaw, whether or not you can keep your home depends on the type of bankruptcy you file and your particular financial situation.
How does the type of bankruptcy matter?
If you qualify and file for a Chapter 13 bankruptcy, you will be able to keep your home. In fact, one of the biggest advantages to a Chapter 13 bankruptcy is that you will not lose any assets during the process.
If you file a Chapter 7 bankruptcy, there is a chance that you will lose your home. However, this depends on other financial factors.
How can I avoid losing my home with Chapter 7?
Much depends on the equity you have in your home. Equity is the value of your house after subtracting any mortgages or home equity loans you have. If your Equity is negative, the courts will exempt your home from the liquidation process.
Can bankruptcy discharge medical debt?
Medical emergencies are extremely hard to prepare for. When an injury or illness can appear instantly, victims have very little time to build a savings to pay for the debt. When tens of thousands of dollars of medical debt become a significant obstacle for someone, what can they do to recover?
Health care is extremely expensive. Every year, the United States spends 3.5 trillion dollars on medical expenses. Staying in a hospital can cost more than $5000 per day. Medical debt can keep a family from getting ahead on other debt and deny the chance to improve their lives, but bankruptcy may be the answer to beating it.
What bankruptcy can do
Personal bankruptcy comes in two primary forms: Chapter 7 and Chapter 13 bankruptcy. While both options discharge unsecured debt like medical debt or credit card debt, each of these options impacts medical debt differently. Chapter 13 bankruptcy allows an applicant to restructure the debt payments into a payment plan lasting between three and five years. After this period, the court will discharge any remaining debt.
Qualifying for a mortgage after a Chapter 7 bankruptcy
Seeking Chapter 7 bankruptcy protection can help you get out from under your mounting debts and finally re-establish yourself on a firm financial footing. Yet at the same time, such an action does have an impact on your credit rating, which may make it difficult for you to secure financing for large purchases (such as a mortgage) in the days and months immediately following your bankruptcy.
Many come to us here at The Law Office of Donald L. Bell asking how long after filing for a Chapter 7 bankruptcy might they be able to qualify for a mortgage. If you share the same question, you should know that there likely is not an easy answer to this question.
How long to wait to apply for a mortgage
Officially, there is no mandatory waiting period after filing for bankruptcy for you to apply (and qualify) for a mortgage. Simply based on approval rates, however, a general pattern emerges for the different home loan programs available to you. Per Lending Tree, these are:
Explore these options before considering bankruptcy
Many people with financial problems may consider filing for bankruptcy. This legal process provides individuals relief from their debt and a second chance at financial success. Though bankruptcy might be the only choice for many people in Maryland, other options might provide better solutions.
Before filing for bankruptcy, many states require that people try credit counseling and financial evaluation. Credit counselors are very resourceful and may find a solution that benefits creditors and debtors alike.
Credit counselors examine finances for opportunity
Credit counselors can help those with financial problems find solutions. By reviewing one's entire financial situation, including income, debt, savings, spending habits, and more, a counselor can professionally assess one's situation and recommend a course of action. Counselors will try many tactics before recommending filing for bankruptcy.
Financial counselors may recommend the following:
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