Credit Card Debt Forgiveness

Are you in credit card debt?  If so, you are not alone.  Credit card debt is on the rise, and it is growing.  Take a look at this CNBC story to see the rise.  Credit card debt forgiveness is also increasing.  But how?  Why?  Credit card debt that cannot be repaid is a problem.  If you can't pay it you have limited options.  One of them, however, is to ask for the debt to be forgiven.  Even if only part of it.

Credit card debt forgiveness is available directly through creditors.  Asking a credit card company to forgive your debt is a simple ask.  Getting the debt actually forgiven, though, is a different issue.  This recent US News article elaborates the varied aspects of asking your credit card debt to be eliminated or reduced.

If credit card debt forgiveness is offered, there is a catch.  The IRS.  Whatever credit card debt is eliminated is deemed income by the IRS.  You will receive a 1099 for whatever amount of credit card debt you can be reduce or eliminate.

Beware, too, of all debt consolidators.  They are often scams.  Credit card debt forgiveness  in this manner, as such, is rarely worthwhile.  The cons outweigh the pros.

Bankruptcy, therefore, may be a better option for credit card debt forgiveness.  Bankruptcy is a negative on your credit.  It can, however, eliminate your debt, and that is a positive.  It's tax-free, too.  Forgiveness of debt through bankruptcy is not a taxable event.  If you discharge debt in bankruptcy there is no tax to pay.  It's also not a scam like many debt consolidators.  It is a reliable option for those unable to pay their debt.

Too Much Credit Card Debt?

Do you have too much credit card debt?  If so, you are not alone.  Credit card debt recently surpassed one trillion dollars for US consumers.  That's a lot!  An ABC news story depicts the deepening American debt load.  What, then, to do?

The simple solution is to pay credit card debt off.  Budget solutions suggest paying down higher interest rate creditors first.  That's well and good.  If you can afford it.  But if you have too much  debt you may not be able to afford it.  That's why you may be in debt in the first place.

Borrowing more money to pay off too much credit card debt is another way out.  But it really isn't a way out.  It is a just digging deeper into debt.  Whether you borrow against your home or take out new loans to pay off older ones, you may be only worsening the problem.

More income is another silver bullet for too much credit card debt.  But that, too, is a limited option.  Most Americans are on a fixed income.  Static income in not just for seniors.  Anyone earning a salary knows that.  Most people earn what the earn.  Raises are not enough for those living with too much credit card debt.

Bankruptcy may be the best option for those trying to manage too much credit card debt.  Bankruptcy may eliminate your debt while allowing you to protect your assets, including your home.  It may actually improve your credit  since, after all, elimination of debt is a big benefit on your credit.

Common bankruptcy myths are many.  But they shouldn't deter filing for bankruptcy for those in need.  Why?  Because they are not true.  Bankruptcy is a powerful financial tool for those unable to afford their debts.  Your debts can be eliminated or, at the least, reorganized.  Some of the most common misconceptions of bankruptcy are laid out in this post.

Common Bankruptcy Myth:

You Must Surrender Your AssetsNot true.  One of the most common bankruptcy myths is that you cannot protect your property.  Not so.  Bankruptcy law allows you to protect your assets.  Usually all of them.  Exemption laws provide protection of your property when you file bankruptcy and, as a result, you don't have to lose everything.  As I have counseled countless clients in Sacramento, you don't have to give up your possessions when you file bankruptcy.  Bankruptcy laws let you keep your home, cars, cash and retirement.  And the list goes on.  Every case is different, as are individual finances.  But the point is you don't have to surrender your property to gain debt relief through bankruptcy.

Common Bankruptcy Myth: Bankruptcy is Bad for Your Credit

It is.  But if your debt is worse your credit can improve by filing bankruptcy.  The key to determining whether to file for bankruptcy is weighing these factors.  It is understandable that this is one of the most common bankruptcy myths.  But your debt load must be considered in evaluating your bankruptcy options.  Is it better on your credit to file bankruptcy and remove your debt?  Or is it better to avoid bankruptcy and live with  the debt on your credit?  This is the question to ask.  A Time Magazine article points out this balance.

No matter the financial need, bankruptcy can be a good option.  Therefore, don't disregard bankruptcy.  Living in debt is hard.  Often debt begets more debt.  It is a cycle bankruptcy can break.  Bankruptcy myths should not be part of your decision whether to file for bankruptcy.

Contact my office for a free consultation to evaluate your options.  You have nothing to lose, but your debt.

Debt or Discharge?

Debt or discharge, that is the question. But what does it mean?  Simply put, its a decision.  It's a decision whether to live with debt or without it.  Discharge is the end result of a bankruptcy.  When you file bankruptcy, here in Sacramento or elsewhere, you  have debt.  Likely a lot of it.  Enough debt to prompt you to file for bankruptcy.  But, again, why?

Bankruptcy is a legal process that can eliminate your debt.  The end result of a bankruptcy filing is a discharge. Here is an explanation of it from the Sacramento bankruptcy court. A discharge is a legal order from the bankruptcy court.  It orders your debts no more.  Hence the title of this blog being debt or discharge.

Before you get the discharge, you must complete the bankruptcy filing process.  It's not too difficult to do with legal guidance.  But it must be done right.  Otherwise, no discharge.  Then your debt or discharge question is answered for you.  Some of the basic components of a bankruptcy filing are listing your creditors and assets.  You have to put down everyone you owe money.  Even if is Aunt Edna or Uncle Charlie.  Everyone must go onto the list, or schedules in bankruptcy.  Including your assets is an obvious one.  Bankruptcy law allows you to protect, or exempt, your property.  But you have to list it.  

When the bankruptcy filing process is done, the judge orders orders a discharge.  Poof, no more debt or discharge dilemma.  Maybe this is an oversimplification.  But maybe it's not.  The point is you have a choice choice.  There are several facts that lead to debt.  And there are several factors that can lead to a discharge.  Each debtor is different.  But all have options.

Contact my office for a free consultation to evaluate your options.  

Sacramento Bankruptcy Basics

Sacramento bankruptcy basics is a primer post for those considering filing for bankruptcy.  Bankruptcy can be a hard decision.  A really hard one.  But bankruptcy can bring relief.  Lots of it.  The most basic equation for those thinking of bankruptcy is debt.  More debt than income.  That is the common denominator for bankruptcy filers.  So, if you have more debt than you can afford, bankruptcy should be considered.  Not because you want to.  Since you have to.

But bankruptcy is not that bad.  What many fail to consider is the benefits of bankruptcy.  Namely, it eliminates debt.  Many in Sacramento are living with debt they cannot pay.  Something needs to be done.  But what?  The first Sacramento bankruptcy basics evaluation should be whether your debt is growing.  If it is, that's a sure sign you have more debt than you can afford.  And it's also a sign your debt is likely to get even bigger.  Borrowing to pay off borrowed money is a common phenomenon.  It is unsustainable, though.  Something will eventually have to give.

Debt consolidators are commonplace.  Their pitches are good.  But their impact is bad.  Consolidating your debt is a ding worse on your credit then bankruptcy.  Plus it doesn't eliminate your debt.  Here is a news story revealing the problems.  Sacramento bankruptcy basics should always include avoiding these companies.  This is not a scare tactic.  It is a fact.  Having third parties pay your debt, if that even happens, is worse than bankruptcy on your credit.  And if some of you debt is eliminated, it is taxed.  Debt discharged, or eliminated, in bankruptcy is not taxed.

As a final Sacramento bankruptcy basics point, I invite you to evaluate your bankruptcy options.  You can go to the Sacramento Bankruptcy Court to gather information.  Or you can contact my office for a free evaluation.  All you have to lose is your debt!

Can you discharge student loan debt? Maybe. Ordinarily student loans cannot be discharged through bankruptcy. Meaning that student loan debt cannot be eliminated through a bankruptcy filing and discharge. Other types of debt can be discharged, or eliminated, in bankruptcy. But not student loans. Usually, that is. Student loans are on the rise. The ...

Abbey Lee, the reality TV star of "Dance Moms," filed for bankruptcy several years ago. And the Dance Moms bankruptcy did not go well. Why? She didn't disclose all her assets when she filed for bankruptcy. That's bad! Filing bankruptcy provides protection from creditors. It allows you to eliminate debt you cannot afford. And that's good. But you mu...

Financial Stress

Financial stress is, well, stressful. That is not news to millions of Americans coping with money woes. This Forbes article points out the percentage of Americans who are struggling to make financial ends meet. It is a tough task.

Much of the advice given out to counter financial stress often involves debt elimination or reduction. That’s a good way to go. If you can. The reason so many are struggling with debt is they don’t have the income to pay it down. That’s why they are in debt in the first place.

Bankruptcy is a way to eliminate debt when you cannot afford to pay it back. Bankruptcy is normally considered a last financial resort. And it should. But for those who can not pay their debts it is their only resort. It is also a way to eliminate not just your debt, but the financial stress that accompanies it.

Debt is a big source for financial stress. There’s no doubt about that. But financial woes are not just about money owed. Financial stress can cause a mindset of dispair. A feeling of not being able to get out from under. Money problems can stress not only your finances, but other parts of your life. Relationships, friendships and work bonds can all be stressed when finances are unstable.

Bankruptcy can eliminate your debt. And it can eliminate the emotional baggage that goes along with not being able to repay the debts you owe. Bankruptcy is not as bad on your credit as many believe. That’s because there is an obvious benefit to your credit through bankruptcy. It eliminates your debt. That is good for your credit. And it usually counters the detrimental aspects of filing for bankruptcy. Bankruptcy is a powerful financial tool. Bankruptcy can eliminate your debt. More importantly, it can eliminate the stress that goes along with the debt you owe.

Bankruptcy Plan

Bankruptcy plan. What is it? Bankruptcy is a legal tool that allows you to eliminate your debt. Sometimes all your debt. Sometimes some of your debt. Each bankruptcy filing is different. But the basics for all bankruptcies remain the same. When you can’t repay the debt you owe, what do you do? That’s the premise of bankruptcy.

If you cannot afford to pay any of your debt, bankruptcy may allow you to eliminate it. Eliminating debt through bankruptcy is known as a discharge. A discharge is a legal order issued by the bankruptcy court relieving the debtor of his or her financial obligations. It eliminates the debts. If, though, you can afford to pay your debt, bankruptcy laws require you do so. Even if it is only a small percentage of your debt you can afford to pay back. Repaying your debts through bankruptcy is done through a bankruptcy plan.

Normally a bankruptcy plan is initiated with the filing of a Chapter 13 bankruptcy. The Chapter 13 plan will provide the terms of your debt repayment. Both businesses and individuals can file. It will list how much you will pay back. For how long you will repay your creditors. And it will include who you will repay. News of the bankruptcy of ‘American Idol’ producers’ debts were disclosed in a bankruptcy repayment plan.

If you cannot afford to repay your creditors in a Chapter 13 bankruptcy, a Chapter 7 may be an option. A Chapter 7 bankruptcy normally does not require you repay your debts. There is normally no type of bankruptcy plan with a Chapter 7 bankruptcy.

Providing for a bankruptcy plan where you repay your debts, or at least some of them, can be of benefit to a debtor. Sometimes a debtor who files for bankruptcy wants to repay some debts. Repaying mortgages are a common example, particularly when a debtor is in default on their mortgage. If a debtor is in foreclosure on their home, the mortgage arrearages (delinquent mortgage payments) can be made up through a Chapter 13 bankruptcy plan.

Sacramento Bankruptcy Statistics

Sacramento bankruptcy statistics have been telling the past decade. Bankruptcy filings peaked in 2010. Over 50,000 bankruptcy filings were reported in Sacramento that year. The bankruptcy court in Sacramento is the United States Bankruptcy Court. It serves the entire eastern district of California. The court serves a broad area. It covers everything from Fresno to the Oregon boarder. From the delta to Lake Tahoe. It’s a wide geographical base. This is the link to the court. Here is the district map. This shows all the locations the court covers. It is bag.

Bankruptcy filings in Sacramento are now down. They are less than 2010. Much less. The reason for the decline is due to credit. Or a lack thereof. The great recession caused economic chaos. Credit was too high. Jobs were lost. And debt could not be repaid. It was that simple. It has taken a long time. But credit is now on the rise. This CNBC story is telling. Read it. See for yourself. This may be a recipe for moving Sacramento bankruptcy statistics. Just as it did several years ago.

The economic theory here is not complicated. Rising debt. Stagnating economy. Rising Sacramento bankruptcy statistics. They all go along. Consumers need money to pay debt. The more debt they have, the more money they need. With this increasing debt, increasing income is needed. It’s not happening. So far. The economy may catch up with the debt. But it hasn’t yet.

If the debt and income aspects of the economy don’t reconcile, something has to give. Consumers are typically left holding the bag. But bankruptcy can be a financial fix. Bankruptcy is a way to eliminate debt when you can’t afford to repay it. That is why Sacramento bankruptcy statistics showed such a spike several years ago. And may do so again. Chapter 7 bankruptcy can eliminate all your debt. Chapter 13 bankruptcy can pay off part of your debt. And it eliminates what you can’t afford to repay. Whatever your need, bankruptcy can cure what the economy is not.

Debt Statistics

Average Credit Card Debt in America: 2016 Facts & Figures
The following debt statistics outline the median credit card debt in america.
Average Credit Card Debt in America
The mean credit card debt of U.S. households is approximately $5,700, according to most recent data from the Survey of Consumer Finances by the U.S. Federal Reserve. This information comes from data collected up through to the year 2013, and represents the most reliable measure of credit card indebtedness in the United States. The “mean amount of credit card debt” considers balances that Americans above the age of 18 have on average, throughout the year.

Another method for estimating average credit card debt is to look only at indebted households – excluding who pay their balances in full on a monthly basis. To obtain this figure, we looked at data reported by the Federal Reserve for Outstanding Revolving Debt – we then divided that number by the number of card-carrying households each year. As of March 2016, the average credit card debt for these households is $16,048.

Period Outstanding Revolving Debt (Billions) Estimated Total Outstanding Credit Card Debt (Billions) Avg. Indebted Household Credit Card Debt Percent Change in Average Debt
2010 $841 $673 $15,024 -3.51%
2011 $843 $674 $14,915 -0.73%
2012 $846 $677 $14,671 -1.63%
2013 $852 $682 $14,609 -0.43%
2014 $890 $712 $15,165 +3.81%
Q1’15 $891 $713 $15,020 -0.95%
Q2’15 $910 $728 $15,336 +2.10%
Q3’15 $923 $738 $15,547 +1.37%
Oct. 2015 $924 $739 $15,568 +0.14%
Nov. 2015 $929 $743 $15,652 +0.54%
Dec. 2015 $936 $749 $15,779 +0.81%
Jan. 2016 $938 $751 $15,812 +0.21%
Feb. 2016 $941 $753 $15,863 +0.32%
Mar. 2016 $952 $762 $16,048 +1.16%

Average Credit Card Debt by Region

Average credit card debt varied widely by state or region. According to data from the credit reporting agency TransUnion, the typical Alaska residents carried the most credit card debt – an average of $6,910 – this is 23% more than Colorado, which is the next state carrying the highest average credit card debt.

Dischargeable Debt

Dischargeable debt. What does that mean? Debt needs no definition. But dischargeable does. Dischargeable debt is debt that can be discharged by law. This means that the debt is eliminated. Normally this is done though the filing of bankruptcy. And once discharged, the debt can no longer be collected upon.

The reason people file bankruptcy is that they cannot afford to repay their debts. Filing bankruptcy allows their debts to be discharged. When a bankruptcy case is completed, a discharge is ordered. This means he bankruptcy judge issue an order. The order declares the debt is legally discharged. This means it is no longer owed. But only dischargeable debt can be eliminated. Or discharged.

Most forms of debt are dischargeable. But some are not. The most common forms of debt that are dischargeable include credit card debt, medical bills, car repossessions (or surrenders), foreclosures, past-due rent, social security and unemployment overpayment, and more. These are all types of dischargeable debt. They can all be eliminated through the filing of bankruptcy.

Some debts, though, are not dischargeable. Certain types of taxes are not dischargeable. For example, sales tax and employee withholding are types of debt that may not be dischargeable. So even if you file bankruptcy, you may not be able to eliminate these debts. There are forms of bankruptcy, Chapter 13 bankruptcy for example, where you can provide repayment plans for these debts. But none that eliminate them.

Income tax and student loans may be dischargeable debt. Stress on the may. Income tax can be discharged through bankruptcy. But the taxes must be old enough. There are other restrictions, too. But typically income taxes more than 3 years old can be discharged in bankruptcy. Student loans are another maybe. Typically student loans are not dischargeable. Even if you file for bankruptcy. But is you are in a hardship situation, as this US News Report & World Report article points out, you might be able to eliminate your student loans.

Medical Bill Relief

Medical bill relief is a much needed commodity for many American consumers. This is especially so for surprise medical bills, as this Fortune Magazine article reports. The reason medical bills can cause such financial chaos is simple. Medical bill are expensive. Really expensive. And it is only getting worse.

Much of the need for medical bill relief is related to healthcare insurance changes. With the implementation of the Affordable Care Act (Obamacare), millions of Americans’ medical insurance plans changed. The changes typically involved higher costs and fees. With the increased costs came decreased coverage for many. This resulted in medical bills. Medical bills consumers thought were covered by their insurance. But they weren’t.

Ambulance bills, once considered covered by insurance, no longer were for many new medical insurance policies. An extra $1,500.00 for an unanticipated health emergency could soon result in a financial emergency. Medical bill relief for many became a must.

Medical bills are rarely welcomed or invited. But collection efforts for medical bills can be some of the most aggressive. Collection companies often contribute to the problem facing many in need of medical bill relief. Expensive medical bills are a problem. A big one. Pressure to pay these bills can be bigger. Lawsuits often result. Perhaps even a bigger problem.

What, then, can be done? Paying them is an option. But not a good option for most. Not paying them can leave you in peril. But this is the only option for too many. Bankruptcy may be the only option. But it is a good one. Medical bills are unsecured debt. This means they can be discharged in a bankruptcy. Discharged debts are eliminated. You are legally relieved of these debt. This is a big benefit to those in need of medical bill relief. Bankruptcy may not be anticipated. But neither may be medical bills.

Wage Garnishment Relief

Wage garnishment relief is a must for those in need. A wage garnishment is the result of an earnings withholding order. It means a creditor can collect what they are owed directly from your paycheck. Without your consent. Often creditors obtain authority to garnish wages through the sheriff’s office. Typically creditors obtain the ability to garnish wages after obtaining a judgment. They can then take the judgment to the sheriff who can then initiate a wage garnishment to collect the debt.

There is little employees can do to stop a garnishment. Some can seek a hardship waiver. But most cannot. A wage garnishment can take up to 25% of an employee’s pay. Wage garnishment relief becomes a big priority for those facing a garnishment. And for good reason.

U.S. News and World Report recently published an article depicting the need of wage garnishment relief for former students’ salaries being garnished by the U.S. Department of Education. It was for student loan repayment. And it was for a school that no longer was. No education. No degree. Now no normal paycheck. Tough spot to say the least. If student loan default can result in garnishment by the government, what does that say about the vulnerability of the American employees’ pay? It says a lot.

There are, though, ways around a garnishment. Paying off the underlying debt is an obvious choice. So is contesting the basis of the debt. But both these options are likely not to result in wage garnishment relief. Employees can rarely pay off debts resulting in garnishments. And rarely can the debts be contested. They are owed. They just can’t be paid. That’s why the wage garnishment was imposed.

The only option for many is bankruptcy. And a good option it is. Bankruptcy is often viewed as a last line of financial defense for most. And it should be. But a wage garnishment is obviously a sign of needing to play your last card. Besides, if you are facing a judgment and the need for wage garnishment relief, your credit is already impacted. Big time. Bankruptcy at this stage only serves to benefit your credit. Not to mention stopping any wage garnishment. Bankruptcy is a powerful financial tool. And a wage garnishment is predicament in need of a powerful fix.

Sacramento Bankruptcy Debt Relief

Sacramento bankruptcy debt relief is needed for many in the region. The economy in Sacramento is better since the great recession. But it is not back. Not even close. Those living and working in Sacramento know this.

Debt, though, is back. Consumer debt has risen far beyond the economy has grown. It is a recipe for Sacramento bankruptcy debt relief. When debt peaked in 2007-2008, the economy could support it. But that changed. The economy tanked. Along with it went the ability to repay that debt. The same scenario may be reemerging. But in a different dimension.

Debt is growing again. But the economy hasn’t kept pace. At least enough to support the growing debt. Debt is increasing. The economy is not keeping up with the debt. Financial problems are on the horizon. So is more debt. Financial relief is increasingly needed. So is Sacramento bankruptcy debt relief.

Bankruptcy offers debt relief by eliminating debt. It’s that simple. Sacramento bankruptcy debt relief is a solution to get a fresh financial start. This Sacramento Bee story pointed out a state legislator’s personal need to avoid mounting negative equity in her home. Bankruptcy can do this.

Bankruptcy can eliminate most forms of debt. Credit card debt can be discharged. Car repossessions cancelled. Medical bills cleared. Income taxes erased. Lines of credit, payday loans and mortgages are all subject to discharge through bankruptcy. Bankruptcy is a powerful financial tool.

Bankruptcy Discharge

Bankruptcy discharge is the legal term applied to debt elimination through bankruptcy. Filing for bankruptcy and completion of a bankruptcy case allows filers to receive a discharge. The discharge is an order issued by the bankruptcy court eliminating debt. Here is the he full explanation of a discharge according to the United States Bankruptcy Court.

People filing bankruptcy are known as debtors. Creditors are the entities debtors owe when they file for bankruptcy. Debtors in need of debt relief list their creditors in their bankruptcy paperwork, or bankruptcy petition. Upon the completion of their case, debtors receive a bankruptcy discharge. The discharge legally eliminates the debtor’s debts. It’s that simple. Creditors who try to collect after a discharge has been ordered can be subject to penalty and sanctions as this news story suggests.

Not everyone is eligible to file bankruptcy. But those who are can eliminate, or discharge, their debts thought a bankruptcy filing. Limitations exist that may prevent some from filing bankruptcy and receiving a bankruptcy discharge. These impediments to a bankruptcy discharge may be previous bankruptcy filings, excess income or too much property. If eligible, though, a bankruptcy discharge order will result from a bankruptcy filing and successful case completion.

Just filing for bankruptcy alone will not result in a bankruptcy discharge. The bankruptcy case must be approved and completed. With a Chapter 7 bankruptcy this may mean a few months form filing to discharge. A debtor usually does not have to pay anything to his creditors in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, where a debtor does pay something to his or her creditors, this may mean a few years to obtain a discharge. Whatever the type of bankruptcy case, individual debtors receive a discharge at the successful conclusion of their case.

The bankruptcy discharge only applies to legally dischargeable debts. Not all debts can be discharged through bankruptcy. Student loans, criminal restitution and child support are common examples of debts that are not dischargeable.

Foreclosure Relief

Foreclosure relief can come in many ways. Paying you mortgage delinquency is the surest strategy. But those behind on their mortgage rarely have the money to make up the arrearage on their mortgage. That’s why they are in foreclosure in the first place. But there are ways to save your home if you are in foreclosure.

Foreclosure does not mean your home has been sold. It means it will be sold if your mortgage can’t be caught up. The foreclosure process starts with the filing of a Notice of Default and Intent to Foreclose. It is a form filed with the county recorder and mailed to the homeowner. If the arrears, or delinquent mortgage payments, are not paid within 90 days, the house will be sold. Foreclosure relief is unavailable after foreclosure sale.

Before the 90-day deadline expires, there are foreclosure relief options. Paying the past-due mortgage is usually not possible. Especially within 90 days. But working with your lender can work. Requesting a modification is a good strategy. Often a modification can put your mortgage arrears at the end of the loan. Doing so can bring your mortgage payments current. It also eliminates the foreclosure sale threat. Sometimes mortgage lenders work with homeowners. Sometimes they don’t. But it is a good option to pursue. There are also government agencies that can hep. Keepyourhomecalifornia.org is a great resource.

Borrowers must be cautious, though. Especially with looming deadlines. Even if a mortgage modification can provide foreclosure relief, it must be completed before the foreclosure period expires. That’s 90 days. That’s not a lot of time to complete a mortgage modification. But it can be done. Outside companies and individuals promising to save your home can be another risk. As this news story points out, beware of scams and pitches by people trying to prey on your foreclosure peril.

Bankruptcy may be a last resort for many. But it is a good one. Often the best for foreclosure relief. Bankruptcy can provide borrowers up to 5 years to catch up on their mortgage. That’s a lot better than 3 months. And federal law prevents a foreclosure sale for those in bankruptcy. You must continue to pay your mortgage while in bankruptcy. You also must provide repayment of your mortgage arrearage through your bankruptcy. But the bankruptcy, know as a Chapter 13, will protect your home. Bankruptcy is a great debt relief tool for those in need.

Payday Loan Relief

Payday loan relief is a common concern of those considering bankruptcy. And it should be. Payday loans are some of the most predatory loans out there. Payday loans provide quick cash. They are easy to get. But they come at a cost. A big cost. Typically payday loans charge nearly 500% interest. That is a lot even for the lending industry. As this Chicago Tribune story points out, payday lenders are taking some heat.

The way payday loans work is you post-date a check and exchange that for a quick cash loan. Lenders such as Check ‘n Go, Check Into Cash and others offer easy money for those in need. Repaying these loans is not as easy. If the post-dated check is not honored, the extreme interest rates kick in. And this is on top of the loan processing costs and fees. So if your $350 check to the payday lender offered in exchange for a $300 loan cannot be cashed when promised, watch out. No wonder so many are in need of payday loan relief.

Part of the problem, too, is the aggressive nature of the lenders. Many borrowers look to payday loan options because their credit is bad. Payday lenders are their only options. And the payday loan industry knows this. That is why they charge what they do. They can. That is little solace to borrowers who fall behind on these loans. And it is when the need for payday loan relief really shows itself.

Payday lenders charge enormous intest and excessive fees. And if you don’t pay them you need another loan to pay off the last. It becomes a cycle. For those in it, a vicious cycle. If borrowers don’t pay, payday lenders can tap the borrowers’ bank accounts. To get these loans you must provide your bank account information. All of it. And with that, payday lenders can essentially take from your account what you owe. Not good, especially if you did not know it was coming. Another reason borrowers often need payday loan relief is the aggressive nature of payday lenders. If you don’t pay the loans back, don’t expect to be ignored.

Bankruptcy is an option for payday loan relief. And it is a good option. Payday loans are unsecured debts that are commonly discharged, or eliminated, in bankruptcy. If you owe for a payday loan, you may eliminate it by filing bankruptcy.

Bankruptcy Effect on Lawsuits

Bankruptcy effect on lawsuits is a common question for those considering filing bankruptcy. Particularly so with those who are being sued. Bankruptcy filings invoke what is known as an automatic stay. It is a bankruptcy term meaning you are instantly shielded from your creditors when you file bankruptcy. This includes creditors who are suing you. And it includes creditors who have already sued you and won. No matter the creditors’ claims, they can no longer pursue a lawsuit against you if you file for bankruptcy.

Creditors can ask the bankruptcy court to continue with a lawsuit. But that is very rare. The bankruptcy effect on lawsuits is to stop them. This mens stopping lawsuits no matter where they stand. Some believe it is too late to file for bankruptcy if they have already been sued. Others think it is too late if they have already lost a lawsuit and face a judgment. Not so. The bankruptcy filing will cause the lawsuit to be dismissed. Often lawsuits prompt the filing of bankruptcies. Hulk Hogan, the wrestler, sued in a sex-tape scandal lawsuit. The party he sued filed for bankruptcy to block the lawsuit and any judgment. It is an interesting news story and a common application of filing for bankruptcy.

With the bankruptcy effect on lawsuits, not only are the suits stopped, so are the consequences. Lawsuits can result in judgments if you lose. As a law professor once told me, judgments are like hunting licenses. With a judgment a creditors can legally hunt any assets you have. Your wages, bank accounts and possessions are all fair game to a judgment. To save your stuff, lawsuits must be stopped.

If you have no defense to a lawsuit, bankruptcy is likely your only option. But it is a good one. The bankruptcy effect on lawsuits is powerful, sure and immediate.

Not Alone Filing Bankruptcy

You are not alone filing bankruptcy. As this US Magazine story portrays, even celebrities file for bankruptcy. Even celebrities who earn millions file for bankruptcy. Why? The answer is simple. Debt beyond the ability to repay is a recipe for bankruptcy. This is true whether you earn millions or much less. If you cannot afford to repay your debts, bankruptcy may be the solution.

Knowing you are not alone filing bankruptcy is often a comfort to those considering bankruptcy. Thoreau was right when he spoke of people leading lives of quiet desperation. This is especially so when dealing with debt. Feeling you are alone in your debt dilemma needn’t be. Millions of others live under the canopy of debt, often believing they are alone in their plight. They are not.

Credit availability is, obviously, tied to debt. And credit availability is now back. Much of credit market dried up during the great recession in years past. Now credit is back. So is debt. And along with it the need for debt relief. There is no more comprehensive or complete recovery from debt than filing for bankruptcy. Again, that is why you are not alone filing bankruptcy.

The basic premise of not being able to afford your debt is a simple concept. It is also the key to your bankruptcy eligibility. If you cannot afford to repay your debt, bankruptcy can eliminate it. Your debt can be eliminated entirely if you cannot afford to repay any of it. This is normally known as a Chapter 7 bankruptcy. If you can afford to repay a portion of your debt, bankruptcy law requires you do so. This is known as a Chapter 13 bankruptcy. Either way, bankruptcy offers debt relief by discharging, or eliminating, your debt. No matter your debt problem, bankruptcy can help. Know, too, you are not alone filing bankruptcy.