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Medina Bankruptcy Law Blog

Is there a way to spot a debt relief scam?

Insurmountable debt is a huge problem for many Ohio residents. Unfortunately, a large number of unscrupulous individuals are poised to take advantage of those looking to get a handle on their debt. Debt relief scams victimize uncountable state residents each year, leaving them even more devastated than they already were.

Fortunately, you can learn to spot the signs of a debt relief or consolidation scam. Armed with just a little knowledge, you can avoid victimization and carry on with your efforts to pay down your debt. Common signs of a scam include the following.

  • Upfront fees: No reputable debt relief company will ask you to pay associated fees upfront. If you make contact with any person or company that asks for fees before they have helped you, it is likely a scam.
  • Guarantees: There are no guarantees when it comes to eliminating or even reducing debt. Any agency or individual who guarantees that they can get rid of your debt within a certain amount of time is not telling you the truth.
  • Nondisclosure: An honorable and honest debt relief agency is eager to share information with you about its services and its track record. If an agency will not disclose this information openly and at no cost to you, then you are probably dealing with a scam.

When will that Chapter 7 filing leave your credit report?

You know that a Chapter 7 bankruptcy filing goes on your credit report. You can't avoid that. Of course, missing payments for months or even years on end also goes on your report, so this isn't to say that adding the Chapter 7 filing is necessarily a bad thing. But it does have a negative impact on your credit score at first.

It doesn't last forever, though. How long will it stay?

There are options for resolving your medical debt

Medical debt is one of the leading reasons that individuals end up filing for bankruptcy here in Ohio and elsewhere in the country. This doesn't have to be the only result if you incur unexpected medical expenses though. There may be other options that you can pursue that won't ravage your credit as much and allow you to keep a hold on your possessions.

Before you even schedule your procedure, you may want to shop around to see whether you may qualify for a medical credit card that will cover your treatment. Many of these cards offer deferred interest from anywhere between six and 12 months from the time that your procedure occurs.

Decide if bankruptcy is right for you

Bankruptcy almost seems like a dirty word to some people, but the truth is that it's a helpful way to get out of debt if you're truly in over your head and have no way to pay back what you owe. Bankruptcy is designed as a way to help you eliminate unsecured debts and to cure debts for items you want to continue to own, such as your home.

That being said, bankruptcy isn't for everyone, and there are some people who will benefit from other debt relief methods, such as taking on another job, consolidating debts and focusing on better budgeting. Bankruptcy should be your final go-to, not the first thing that you consider.

Mortgage loan delinquency and foreclosure rates reach 20-year low

The property business intelligence company CoreLogic published data earlier this month that shows that the number of homeowners that are delinquent in paying their mortgages and are in peril of losing their homes to foreclosure is currently the lowest that it's been in nearly 20 years. The number of homeowners that were struggling to pay their mortgages was holding strong at just below 4% by the end of the third quarter of 2019. Less than .5% of those individuals were facing foreclosure.

When asked why it is that he believed that the home loan delinquency and foreclosure rates have declined, the head of CoreLogic pointed to the United States' strong labor market. He highlighted how the number of unemployed individuals in this country as of September 2019 was the lowest it's been in 50 years.

Student debt gets more attention from companies and governments

Debt has a way of making people feel like failures when they're in it. But there are a lot of reasons that someone may face a debt they cannot pay in the allotted time. It is often because someone made the attempt to improve oneself or one's business and things did not go as planned.

Medical debt, which is incurred when people need extra money to recover their health, is also a leading cause of personal debt. In the last decade or two, student debt has spiraled as more people feel the need to get a degree to support their careers. Some student loans may outlast the jobs that people can get with the degrees for which they pay.

How is a Chapter 13 bankruptcy repayment plan set up?

Chapter 13 is the repayment type of bankruptcy. Individuals who file for this type of debt relief are generally able to hold on to their property after their bankruptcy is said and done. The reason that individuals who file for Chapter 13 can hold on to what they have is because they work with their creditors to come up with a repayment plan.

One of the first things that you'll be asked to do to determine whether you can enter into a repayment plan is to total up all your sources of income. This may include your job, disability payments, a pension, business earnings, unemployment or alimony. You'll need to figure in any wages from bonuses and seasonal jobs as well.

Why do people go bankrupt? 5 major reasons

Naturally, bankruptcy can strike for many different reasons, and no two cases are exactly alike. That said, you can look at some of the main reasons for bankruptcy in an effort to understand the trends and the warning signs.

When you do this, you can identify five major reasons for bankruptcy. People often assume it's because those declaring bankruptcy are not good at managing their money, but it's usually much more complicated than that. Many of these reasons, as you will see, are completely out of your control. Five of the top reasons are:

  1. Losing your job. You could simply become a victim of downsizing when the company needs to cut costs.
  2. Getting divorced. Your spouse may file for divorce even though you want to stay married.
  3. Still facing debt when it's time to retire. Life is expensive, and you may not be able to pay everything off before your job ends.
  4. Seeing a reduction in income. Maybe you still have a job, but you're not bringing in as much money, so debt that was once affordable no longer is.
  5. Ending up with a lot of student debt. If you're still struggling with a lot of student debt in your 30s, you may regret the decisions that you made when you were just 18, and you felt like you had no other choice if you wanted to go to college.

You don't need to fear bankruptcy

You know that you need a fresh start, financially speaking, but you feel terrified at the idea of bankruptcy. It's not the process itself that intimidates you, but the ramifications. What is that going to mean for your future? Once you file, you can't take it back. You don't want to make a mistake that is going to impact the rest of your life.

Specifically, you're worried that you will ruin your credit and never be able to get a loan again. That means no credit cards. It means no mortgage. It means no student loans, no car loans, no lines of credit at your favorite stores.

Filing for bankruptcy isn't the only way to end wage garnishment

If you were to research what happens when an account goes to collections, you'd find that creditors generally only try to work out a payment arrangement with you for a short period before they pursue other legal options to recover what you owe them. One option that creditors commonly pursue is garnishing your wages. While filing for bankruptcy can put an end to wage garnishment, there are other options that can help you achieve the same result.

Many individuals who file for either Chapter 7 or 13 bankruptcy do so because they've heard that they can stop wage garnishment. What you may not realize is that creditor calls and the withholding of your payments only stops temporarily when you file for bankruptcy. Creditors may continue calling about any accounts that weren't discharged once your bankruptcy is finalized.

Get the debt relief you need, the personal attention you deserve.

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