We frequently write about the various logistical challenges that individuals may face when their debts have become to unwieldy to manage. However, logistical and legal challenges are not the only hurdles that individuals must clear on their way back to financial stability.
We have previously written about the fact that overwhelming student debt can be particularly tricky to navigate. This kind of debt cannot generally be discharged in bankruptcy save for the most desperate of situations. In addition, while some student debt can be consolidated and other debts can be deferred, deferments generally are only available for a certain period of time.
If you are in debt and have missed one or more payments, you may have begun to receive calls, letters and/or emails from your creditors. If you are several payments behind, you may be receiving communications from debt collectors and collections agencies. Creditors and debt collectors may attempt to communicate with you so frequently that you begin to dread the sound of your phone ringing and the knowledge that the daily postal mail has been delivered.
It seems that aggressive, unethical and deceptive tactics are being employed quite regularly by creditors in regards to military personnel who find themselves in debt. According to the Consumer Financial Protection Bureau (CFPB), veterans, active military personnel and military families have recently filed a staggering number of complaints with the agency against creditors.
By Christopher P. Walker
The American Bankruptcy Institute, a nonpartisan group that provides research and education on bankruptcy and insolvency, recently released statistics gathered from all U.S. bankruptcy courts, finding that the overall rate of bankruptcy dropped in 2013 by 13 percent over the previous year. Moreover, this is the fourth year in which that rate went down.
When people with debt problems reach the conclusion it’s time to file for bankruptcy, many find it hard to justify the expense of hiring a bankruptcy lawyer. Even though bankruptcy services are generally quite affordable, taking on any new expense can feel like a mistake.
On Dec. 3, a U.S. Bankruptcy Court judge ruled that the City of Detroit can file for Chapter 9 municipal bankruptcy. That makes Detroit the nation’s largest municipality to file for bankruptcy, greatly eclipsing others on the list, including three California municipalities. Orange County, Stockton and San Bernardino County came in at third, fourth and fifth, respectively, with the largest involving debt levels only a ninth the size of Detroit’s.
If you’ve been hit hard by the Great Recession, you probably have more bills than you know what to do with. A job loss, for example, not only means less income but a cascade of negative financial events. When people are struggling with unmanageable debt, they often try to throw every penny at debt and leave off saving for less urgent needs like retirement and college funds for the kids.
In order to get a discharge in bankruptcy, sufficient time must pass between the filing of two separate bankruptcy cases. So if a bankruptcy case is filed too soon, a discharge may not take place. While there is nothing to stop a debtor from filing bankruptcy too soon, it would be a waste of time and money to do so.