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Lafayette Bankruptcy Law Blog

Support groups and Chapter 7 bankruptcy may help with debt

When financial problems become overwhelming, many Louisiana residents are prepared to turn just about anywhere for help. Of course, not all options are appropriate or even helpful when it comes to finding debt relief. For numerous individuals, Chapter 7 bankruptcy can the method that helps them find a fresh start, but it does not mean that individuals cannot first find support.

It may come as a surprise to some to know that there is a program known as Debtors Anonymous. Its aim is to help people struggling with financial debt find support and ways to get their financial issues back under control. Meetings are available in person or even online. While it may seem odd to go to a support meeting about debt, overwhelming debt can have physical and emotional effects on a person that could worsen without the right support.

Holiday spending can leave many looking for debt relief

Though the holiday season has come to an end, many Louisiana residents may still be feeling its repercussions. Some people may just now be starting back to work after a few weeks off and dread going in, and others may still be feeling the effects of holiday-related spending. Unfortunately, spending during the holidays can often leave individuals looking for debt relief.

It was recently reported that this past holiday season saw a significant increase in spending. Consumers spent money on gifts, travel expenses and other holiday-related costs, and holiday debt increased 8% in 2019. Additionally, consumers have accumulated $1,325 on average in holiday debt this past season. While that may not seem like a substantial amount to some, it could take years to pay off, especially for those only making minimum credit card payments.

Even those with high incomes can need debt relief

Debt is a financial issue that affects people of all income levels in Louisiana and elsewhere. Even if parties earn a six-figure income, they could still be susceptible to credit card debt that could cause serious problems in the future. Before they know it, it is possible to need information on debt relief options.

It is common for people to think that individuals with higher incomes are less likely to accrue significant debt, but that is not necessarily the case. People in higher income brackets may have more access to credit and fall victim to thinking that they have more money to spend than they actually do. Plus, many individuals begin spending more as their income increases, which could result in an issue known as lifestyle creep.

Incredible student loan burdens for those 50 and up

It's no secret that student loan debt is a huge issue in the United States. College has gotten very expensive, very fast. Wages have not kept up. Many people feel they have no choice but to go to school, and it's a choice they make when they're 17 or 18 years old. They wind up with tens of thousands of dollars in debt that they can't pay off after graduation. It prevents them from buying homes, starting businesses, buying cars, getting married and doing many other things that previous generations expected of them.

However, studies have shown that you should not stereotype college students into the same age group, assuming only those in their teens and 20s have to deal with this debt. It's a big problem for those who are 50 and older, as well, with recent reports showing that their debt levels are soaring.

Does bankruptcy leave a permanent mark on credit reports?

There are many details regarding certain debt relief methods that may hold people back from using them. For instance, many Louisiana residents may worry about how long a Chapter 7 bankruptcy filing will stay on their record. While this is certainly a valid concern, individuals may want to remember that the mark is not permanent, and they can do their part to rebuild after filing.

If individuals do not have a steady stream of income or cannot pay back their creditors for other reasons, they may qualify for Chapter 7 bankruptcy. This type of bankruptcy has a more serious impact on credit scores because no repayment takes place. Additionally, this detail on a credit report will remain for 10 years, but accounts discharged in the bankruptcy process will be removed earlier.

Finding debt relief is a common goal for 2020

With 2020 just weeks away, many people in Louisiana and across the country are undoubtedly thinking about resolutions they want to make for the coming year. Some people may want to lose weight, get a new job or take care of obligations that they may have been putting off. For others, finding debt relief in the new year may be a desired goal.

It was recently reported that 84% of participants in a 2020 New Year Financial Resolutions Study indicated that they would rather save $5,000 than lose 5 pounds, and 84% want to lower their debt more than they want to reduce their screen time. The survey had over 3,000 participants. However, 51% of participants indicated that unexpected expenses could hinder their attempts at achieving these financial goals.

Another trucking company files for Chapter 11 bankruptcy

When facing financial tribulations, companies can easily start to experience major issues. In some cases, those issues may result in businesses needing to close stores or shut down operations altogether. In many instances, those financial woes lead to business owners filing for Chapter 11 bankruptcy protection.

Louisiana readers may be interested in a bankruptcy filing for a trucking company in another state. Celadon Group filed for Chapter 11 due to numerous financial setbacks, including allegations of fraud against the company's former president and COO as well as the CFO. The company agreed to pay $42.2 million to settle the allegations. However, it was also noted that issues with the trucking industry as a whole led to financial problems for the company.

Personal loans are not necessarily the best for debt relief

When trying to find the best way to handle their debt, some Louisiana residents may consider taking out personal loans. This is one option, but it is important to remember that it may not necessarily be the best option for debt relief. After all, taking out a personal loan may allow a person to cover credit card debt, but it still leaves him or her with a debt to repay.

Personal loans can also come with interest rates that vary significantly. Some individuals may find loans with substantially low interest rates if they have good credit, but if individuals do not have good credit, they could see rates upwards of 30%. Unfortunately, many people who are already struggling with debt may not have good enough credit to obtain a lower interest rate.

What to do if a debt collector calls you

You're sitting at home, minding your business, when all of a sudden your phone rings. You don't recognize the number, but you answer it anyway. It's a debt collector and they want to talk about a bill that you owe.

This may be a high-stress situation that kicks your nerves into overdrive, but it's no time to panic. Instead, take these steps:

  • Take notes: Before you do anything, grab a pen and paper so you can take notes during your call. In addition to writing down the debt collector's name, ask for information regarding the debt itself, such as how much you owe and how many days it's past due.
  • Don't admit to anything: Even if you think you owe the debt, don't admit it to the collector. Doing this may lead you to make a payment or agree to an arrangement before you truly understand the ins and outs of your debt.
  • Don't share personal or financial information: For example, the debt collector may ask how much money you earn, how many other debts you have and if you pay them on time. This is none of their business. You are under no legal obligation to share this information with a debt collector.
  • Hang up: You don't have to stay on the phone with a debt collector. If they're becoming aggressive or won't listen to your requests, simply hang up and reassess your situation.
  • Decide on the next steps: Once you get off the phone, review the information you collected to determine if you owe the debt. If you do, formulate a plan, such as making a payment arrangement or attempting to settle the debt with the original creditor.

Completing bankruptcy does not mean never qualifying for a loan

Many people think that if they need debt relief help then their finances will never be the same. They may believe that filing for bankruptcy will mean that they are never able to buy a home or car or get a difficult type of loan. Fortunately, that is not the case, and taking this route may help many struggling Louisiana residents.

If individuals qualify for and successfully complete a Chapter 13 bankruptcy case, they will repay their outstanding debts through a court-approved plan. Because the debts are repaid, this type of bankruptcy does not have as big of an impact on one's credit score as Chapter 7. As a result, individuals who complete Chapter 13 still have a good chance of qualifying for a conventional loan. However, they will need to wait the required amount of time before applying, which is four years from the dismissal date if the case is dismissed or from the date of filing if the case is discharged.

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Richoux Law Firm, L.L.C.
110 E. Kaliste Saloom Road
Suite 205
Lafayette, LA 70508

Toll Free: 888-327-5740
Phone: 337-205-7049
Fax: 337-456-6299
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