Lafayette Bankruptcy Law Blog

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.

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.

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.

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.