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How to stop creditor harassment

Debt collectors may not always employ the most honest of practices. In fact, some of the practices got so bad that federal government enacted the Fair Debt Collections Practices Act. The Federal Trade Commission has information about what constitutes abuse and how creditors are allowed to contact people in debt. 

Debt relief is possible. People can always contact an attorney if debt is getting out of hand. In many situations, bankruptcy is a viable option that can prevent people from losing their homes, cars and other possessions. Also, bankruptcy can end creditor harassment.

Time limits exist between bankruptcy filings

Some people may mistakenly think that bankruptcy is a one-shot deal: that once you file for bankruptcy, that is the only chance you get. However, this is incorrect. There is no limit to the number of bankruptcy filings you can go through. But there are time limits between your filings.

If you file for Chapter 7 bankruptcy and have debts discharged through the process, then you are unable to file for another Chapter 7 bankruptcy for eight years. For Chapter 13, in general you are not allowed to file if you have previously filed for Chapter 13 bankruptcy within the last two years or filed for a Chapter 7 bankruptcy within the last six years. Some people don't need to file for bankruptcy more than once -- but many people who fall on hard financial times once fall upon those times again.

When the discharge process starts, which debts can be eliminated?

One of the most important aspects of a bankruptcy filing is the debt discharge process. This is the stage of the bankruptcy that sees many of your past debts eliminated (either partially or wholly) and it can free you up after the bankruptcy so that you can get your financial life back on track.

But what debts can be discharged during this process? And are there any other aspects to the discharge process that the filer should worry about?

What debt collection practices are illegal?

Having a large amount of debt is undeniably overwhelming, and if you are among the many Americans who are finding themselves in this position, know that you are not alone. Medical bills often have the capacity to catapult even the most financially responsible people into uncomfortable situations, and the discomfort can be amplified by debt collectors who rely on aggressive methods to try and collect on your debts.

There is a fine line between aggressive debt collection tactics and illegal ones, however, and you do not have to put up with debt collectors who directly infringe upon your rights. Examples of illegal debt collection practices include:

Should you file for bankruptcy?

Filing for bankruptcy is a big step in any person's life. It doesn't matter how sure you are going into the bankruptcy -- because you will still have plenty of questions, and probably some fears too. So it is best to get as much information as you possibly can before you decide to file for bankruptcy.

One of the first things you need to figure out is what type of bankruptcy you are going to file. This is largely decided by whether or not you qualify for certain types of bankruptcy. Chapter 7 and Chapter 13 are two of the most common forms of bankruptcy, and they each have strict rules about income.

Chapter 13 repayment plans can be beneficial

Chapter 13 bankruptcy is one of the two most common forms of personal bankruptcy. Many people use Chapter 7 bankruptcy. This forms requires a means test to be passed. If you earn too much then you won't qualify for Chapter 7. Chapter 13 is a great option for those who are looking to repay their debts under a new payment plan, and/or for those who are looking to protect significant assets from the bankruptcy process.

Repayment plans under Chapter 13 bankruptcy often last for three to five years. While under these repayment plans, the bankruptcy individual would be paying the trustee assigned to their bankruptcy, as opposed to directly paying his or her creditors. The trustee then distributes the money to the creditors.

Which to file first: bankruptcy or divorce?

Perhaps the only thing harder than facing bankruptcy is facing divorce along with it. What are you to do when your savings account ends the same time as your marriage does? Does it make a difference which event you handle first?

Yes, it does. Whether you should file for bankruptcy before or after your divorce depends on many factors. Reviewing these and your circumstances with a bankruptcy attorney can help you determine which is the right course for you.

Is the ACA tied to a significant dip in bankruptcy filings?

Personal bankruptcy filings have been on a steep decline in the last six years, and that's a great sign for many Americans across the country that have been in -- and know -- stressful financial situations. In the last six years, personal bankruptcy rates have dropped roughly 50 percent. But what is driving this decline in bankruptcy filings?

It is difficult to exactly pin down a cause for this decline. When you file for bankruptcy, there is no question or requirement that forces the filer to disclose the reason why he or she is filing for bankruptcy. However, there are some educated guesses that can be made, and without getting to deep into the political side of the issue we're about to raise, it seems to be a solid indicator as to why bankruptcy rates are declining.

Discussing Chapter 7 bankruptcy

People can be in a good financial position and still lose control of it very quickly. Consider this: you have been working hard and saving up for months on end. After accruing a solid amount of savings, you prepare to make a big purchase. But all of a sudden, your car breaks down; and then coupled with that, your work tells you that across-the-board pay cuts need to be made.

The combination of these events make you turn to credit cards to make the purchase that you have long been waiting for. But weeks later, that debt becomes difficult to pay off. So you keep turning to credit cards, and you keep falling further and further into debt. This unending spiral is how many hardworking, honest people end up in a position where a bankruptcy filing is their best outcome.

We have reached same levels of household debt as 2008

The Federal Reserve Bank of New York released new information recently that shows that American households have now surpassed the 2008 level of debt. In that fateful year, households accumulated a peak of roughly $12.68 trillion in debt. Today, that number sits around $12.73 trillion, with about 71 percent of that debt being tied up in housing itself (mortgages and home equity loans). The remaining 29 percent of the debt was listed as student loans (10.6 percent), auto loans (9.2 percent), credit cards (6 percent) and "other" (2.9 percent).

The comparisons to 2008 immediately give off apocalyptic vibes, because the obvious thought is that households are accruing debt that could trigger a 2008-like financial meltdown. However, it seems that there isn't as great a threat this time around.

McBride Law Firm

McBride Law Firm
301 Jackson Street Suite 101
Alexandria, LA 71301

Phone: 318-625-0471
Fax: 318-445-8066
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