Keeping Credit Card Debt at Bay

With the economy showing little sign of improvement, many credit card companies are taking measures to cut costs. Almost everyone uses a credit card these days. So when credit card companies take action to cut their losses or increase their revenue, it will inevitably and some of their ways of doing so affect credit card holders like you and me. Here is what credit card companies tend to do when they want to increase income and avoid bankruptcy:

• Reduce your credit limit
• Increase their interest rates
• Impose higher annual fees
• Increase minimum payment amounts
• Cancel credit cards of inactive holders

Credit card companies are not fond of inactive customers because not only do you not earn money for them but they do not want to be used to pay your expenses if you lose your job (then you become a bad risk to them). If you have been subject to some or all of the above, it may have an adverse effect on your credit score. Worse than that, it may jeopardize your own financial standing.

So here are some things you can do to stay on top of things:

1. Pay of 100% of your credit card debts and control your credit thereafter. By bringing down your credit card balance to zero, you will not be in danger of financial problems should you get laid off.

2. Use your credit card for small purchases, enough for you to pay off each month. This shows the credit card company that you are an active user. Of course, you will always be presented with the latest discounts and promotions of the credit card company but you should resist the temptation to overspend on credit.

3. Keep track of all your credit cards statements and see if there are changes in the credit card company’s Terms of Service. When changes do not suit you, you should bring it up to your credit card company for discussion.

4. If the credit card company increases your interest rate, negotiate with them to pay your balance under the previous (lower) rate.

If you are drowning under heavy credit card debt, you may want to consider filing for bankruptcy protection. Bankruptcy protects you from all collection efforts of credit card companies and other creditors while you work to pay off your debts.

Call us at (813) 200 4133 for a free consultation on bankruptcy.

 

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    Bankruptcy and Credit Cards

    Many people get into financial difficulties because of overspending on credit. Before you know it, the amount of expenses you charge to your credit cards starts to catch up on you and you cannot keep up the payments. Then when the situation deteriorates, you find yourself charging basic necessities like food, rental or utilities to your credit cards. Worse still, you may start to use more credit to repay your debts like using one credit card to pay for another. Ultimately, these actions may push you to file for bankruptcy. But if you are considering filing a bankruptcy petition, you should stop using your credit card. Why? This is to ensure that your bankruptcy filing will not be in jeopardy.

    According to bankruptcy law, whatever you spend on credit just before filing for bankruptcy may be challenged by the creditor. Suppose you spend $10,000 buying things using your credit card and a week later you file a bankruptcy petition and include the $10,000 among your list of debts. Your creditor may file a claim on the debt saying you intentionally abused the bankruptcy process by making purchases on credit with the intention of using bankruptcy to discharge your debts. This action on your part is considered bankruptcy fraud.

    The consequences of bankruptcy fraud can be either the exclusion of your debt from your list of debts (i.e. the debt cannot be discharged by bankruptcy) or you could be charged in court and imprisoned. So you should stop using your credit cards if you intend to file for bankruptcy.

    If you intend to file a bankruptcy petition, call us at (813) 200 4133 for a free consultation.

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      How Bankruptcy Affects Wage Garnishment

      What is wage garnishment? It is an action taken by the creditors that deducts part of your wages to pay for outstanding debt. So through this, a portion of your paycheck earnings will be taken by them. But if you file for a bankruptcy petition, all wage garnishment will cease.  This is due to what is called the automatic stay imposed by the bankruptcy court on your creditors.

      Once bankruptcy is filed, not only wage garnishment but all ongoing collection efforts by all creditors will be stopped right away as the automatic stay will immediately go into effect.  After you have filed for bankruptcy and if the garnishment does not stop right away, you should inform the payroll department of your place of work.  However, a creditor can apply to the bankruptcy court to lift the automatic stay and thus be able to continue garnishing if his application is approved by the court with a valid reason.

      There are some payments that are exempted from automatic stay.  For example, if your wages are being garnished for back child or spousal support, this will be considered as a priority debt, and that means that the automatic stay will not apply because it is a priority to the court.  The automatic stay prohibiting wage garnishment will generally be effective until you exit bankruptcy.  Once your bankruptcy is completed, creditors that were garnishing your wages will not be allowed to continue even though they may not have been paid everything that was owed to them.  Your debts will be declared discharged and no further payments will be necessary.  Until your debts get discharged, the stay that’s in effect will be maintained.  However, the creditor might be able to continue to garnish wages if the court allows the stay to be removed or if your case gets dismissed before you obtain your discharge.

      There are certain qualifications that you will need to meet if you want to regain the funds that were garnished but only under specific conditions. There are some situations where the creditors actually garnishes more than they are obligated to collect and under certain state laws, only a certain portion of your wages can be garnished.  If you face some of these circumstances, you can file a complaint with the bankruptcy court.

      If you are thinking of filing a bankruptcy petition, call us at (813) 200 4133 for a free consultation.t? It is an action taken by the creditors that deducts part of your wages to pay for outstanding debt. So through this, a portion of your paycheck earnings will be taken by them. But if you file for a bankruptcy petition, all wage garnishment will cease.  This is due to what is called the automatic stay imposed by the bankruptcy court on your creditors.

      Once bankruptcy is filed, not only wage garnishment but all ongoing collection efforts by all creditors will be stopped right away as the automatic stay will immediately go into effect.  After you have filed for bankruptcy and if the garnishment does not stop right away, you should inform the payroll department of your place of work.  However, a creditor can apply to the bankruptcy court to lift the automatic stay and thus be able to continue garnishing if his application is approved by the court with a valid reason.

      There are some payments that are exempted from automatic stay.  For example, if your wages are being garnished for back child or spousal support, this will be considered as a priority debt, and that means that the automatic stay will not apply because it is a priority to the court.  The automatic stay prohibiting wage garnishment will generally be effective until you exit bankruptcy.  Once your bankruptcy is completed, creditors that were garnishing your wages will not be allowed to continue even though they may not have been paid everything that was owed to them.  Your debts will be declared discharged and no further payments will be necessary.  Until your debts get discharged, the stay that’s in effect will be maintained.  However, the creditor might be able to continue to garnish wages if the court allows the stay to be removed or if your case gets dismissed before you obtain your discharge.

      There are certain qualifications that you will need to meet if you want to regain the funds that were garnished but only under specific conditions. There are some situations where the creditors actually garnishes more than they are obligated to collect and under certain state laws, only a certain portion of your wages can be garnished.  If you face some of these circumstances, you can file a complaint with the bankruptcy court.

      If you are thinking of filing a bankruptcy petition, call us at (813) 200 4133 for a free consultation.

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        What Chapter 13 Bankruptcy can do for You

        So what exactly can chapter 13 bankruptcy do for you? Chapter 13 bankruptcy entails a debtor repaying creditors through a bankruptcy court-approved payment plan. Basically, the payments that you have to pay according to the given schedule are usually less than the actual amount of debt you owe to the creditor. Apart from paying less, Chapter 13 bankruptcy may also allow you to pay secured debts with reduced interest rate charges. Generally, you are given 3 to 5 years to repay your debts to your creditors with your repayment plan. You, as the debtor, as well as the creditor will have to follow certain terms that have been set in the repayment plan according to the bankruptcy court regulations.  After all your debts have been paid according to the repayment plan over 3 to 5 years, the bankruptcy court will declare a discharge for your Chapter 13 debts.

        At the time your petition is filed, the automatic stay goes into effect immediately. This automatic stay stops all the collection activities against you including lawsuits, foreclosure and wage garnishment. This is a very good option for you if you want to retain important property like your house or vehicle.  Also, you have the chance to retain certain non-exempt property that may have been sold off under Chapter 7 bankruptcy.

        In the case of a co-debtor or co-signer (if you have any), your co-debtor will also be protected by the co-debtor stay under Chapter 13 whereas in Chapter 7 bankruptcy, these co-debtors or co-signers are not afforded this protection.  They are liable for outstanding debt right after you file your case under Chapter 7.

        As for those who are sole business owners, you should be able to keep your business running as your debts are being restructured with Chapter 13 bankruptcy. You might even get the chance to discharge certain unsecured debts or perhaps you will no’t have to pay your debts to certain creditors.

        Usually, after taking the means test and your income actually exceeds the requirements for Chapter 7, then you should consider filing for bankruptcy under Chapter 13 instead.  If you want legal assistance in regards to repaying debt obligations, then Chapter 13 is a good option for you.

        If you wish to file for Chapter 13 bankruptcy, call us at (813) 200 4133 for a free consultation.

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          Arkansas Coach John Smith Files Chapter 7 Bankruptcy

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            Tax Filing Deadline Extended to April 17

            Next year, Americans have a small reprieve to file their taxes. The deadline for taxes has been extended by two days, April 17th, since the normal deadline ended up on a Sunday and the following day is Emancipation Holiday. IRS will begin accepting efilings starting on January 17th, 2012. Everyone should pay close attention to their due dates and make sure they have everything prepared before submitting any and all information.

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              Seven Signs of a Debt Problem:

              Financial advice column on how to identify if you or someone you know is using credit irresponsibly. Seven Signs of irresponsible credit use include; stressing about debt, treating credit like an income source, using credit to pay off other credit, buying necessities with credit, obsessing about credit limit, only paying the minimum due, and putting off dealing with your debt.

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                Today in Bankruptcy – 9-6-2012

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