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Edmonds Bankruptcy Law Blog

Repairing credit score damage during debt relief efforts

Very often, Washington residents take an overly narrow focus in regard to managing their debt. Once the decision is made to seek debt relief, attention turns to the steps required to complete that process. While this is certainly a worthwhile endeavor, consumers may also want to consider addressing credit repair at the same time.

The first step in the credit repair process is to secure copies of all three credit reports. Highlighter in hand, go ever each report carefully, noting any errors or inaccuracies. Include basic information such as address history and employment information, as well as accounts that should no longer be included in the reports. Next, determine the dispute process for each of the three credit bureaus.

Errors can lead to accusations of bankruptcy fraud

Many Washington residents will encounter a period of financial strain. Whether that span of time lasts for a few weeks or a few years, it can be incredibly stressful to deal with mounting bills and expenses while income and savings dwindle. Personal bankruptcy is a tool that can help individuals and families regain their financial footing and work toward a more stable future. However, it is important to avoid errors in the paperwork surrounding a bankruptcy case; failure to do so can result in accusations of bankruptcy fraud.

The courts do not take bankruptcy fraud lightly, as evidenced in the case of a former neurosurgeon who stands accused of lying under oath and fraudulently concealing and transferring assets. Prosecutors allege that the man intentionally hid financial transfers that totaled more than $500,000. He is also accused of attempting to shield certain items of personal property from the bankruptcy proceeding.

Are African American consumers given poor bankruptcy advice?

Faced with serious financial problems, many Washington residents will look for relief. That relief may come in the form of a bankruptcy filing. As part of that process, consumers sit down with a bankruptcy attorney and go over the process to determine if bankruptcy is the best option for their needs, and which type of bankruptcy is most advantageous. According to a recently published report, not all consumers receive that level of advice.

The report looked at the bankruptcy services marketed to African American consumers in one southern state. According to some, black men and women who are struggling to pay their bills are at risk of falling victim to questionable legal "services" that provide no guidance through the bankruptcy process. In fact, many people found themselves in the middle of a Chapter 13 bankruptcy case with absolutely no understanding of the differences between Chapter 13 and Chapter 7.

The right response to mounting credit card debt

At one point or another, virtually every Washington resident will encounter some level of financial strain. When that happens, bills tend to go unpaid, and credit card debt mounts. Knowing how to respond to mounting credit card debt during a financial shortfall can have a big impact on how things will ultimately be resolved.

If bills are just 30 or so days late, the best thing to do is to take a proactive approach. Reach out to creditors and let them know what's going on. Tell them that you have run into a temporary budget squeeze, but that you will be making your payment in a short period of time. At this stage, the creditor will be more concerned with keeping you as a customer than in pursuing aggressive collections.

Chapter 7 bankruptcy and estate planning needs

There are a multitude of reasons that lead Washington residents to seek bankruptcy protection. One of the lesser known motivations involves estate planning. When an individual is expected to receive a substantial inheritance, filing for Chapter 7 bankruptcy may be a wise financial decision. As with so many financial matters, timing is everything when it comes to bankruptcy and estate planning.

When an individual is overwhelmed with debt and receives an inheritance, his or her creditors have the right to pursue inherited wealth to make good on those debts. That can mean the partial or even total loss of an individual's inheritance. Avoiding that outcome requires advance planning, and is a process that should involve both the person making estate planning decisions and the prospective heir.

Deciding between debt settlement and Chapter 7 bankruptcy

When searching for debt relief options, many Washington residents consider debt settlement. The process of debt settlement involves negotiating directly with creditors to reduce the total amount of an outstanding debt. While debt settlement can result in the forgiveness of a large portion of consumer debt, there are many cases where Chapter 7 bankruptcy offers a better path out of financial turmoil.

By the time most consumers are in need of debt settlement or relief, their balances on credit cards and other outstanding obligations are usually bloated by interest, fines and fees. The original balance owed may represent a small portion of the bottom line. Debt settlement negotiations may reduce the total amount that is owed, but there will be a cost for that service.

Prioritizing student loans in relation to credit card debt

Faced with serious debt issues, many Washington residents are uncertain how to proceed. They may be acutely aware that they need to embark on a path toward debt management, but knowing where to begin is another matter entirely. When considering various options, one of the most important things for people with student loans to consider is how to prioritize those debts in relation to credit card debt.

There are cases where credit card debt should be addressed before turning one's attention to student loan repayment. An example is for individuals who qualify for flexible or non-standard loan repayment plans. Individuals who plan to take advantage of the Public Service Loan Forgiveness program may also want to hold off on paying down their student loan debt. Consumers should also consider the tax benefits that come with claiming student loan interest payments prior to making a decision.

Know your rights when speaking with credit card debt collectors

Receiving calls from debt collection agencies is not something that anyone looks forward to. By the time debt collectors come calling, Washington residents are usually deeply mired in debt. As they struggle to regain control of their finances, dealing with aggressive or misleading debt collection agencies over credit card debt is just one more source of stress. When interacting with debt collectors, it is important to understand the consumer protections that are in place.

To begin, no one should ever feel as if they are required to provide personal information at the request of a debt collector. These individuals already have files for each person they contact. Consumers are not required to provide additional information, including their date of birth, address history or Social Security number. In fact, doing so exposes an individual to a heightened risk of identity theft.

How debt relief could make finding love a little bit easier

Living with high levels of debt is difficult, and can impact many different areas of a person's life. For some people, excessive debt can even have a negative impact on their ability to find love and build a lasting relationship. Most Washington residents know that money management is one of the top causes of contention between partners. What many fail to recognize is that a lack of debt relief can mark someone as a "bad bet" when it comes to choosing a mate.

Recent research suggests that a large percentage of people consider student loans and other types of debt to be "baggage" that is brought into a relationship. Concerns over how that debt will be managed and how long future debt will be addressed can cloud an otherwise promising relationship. People who are thinking about a partner's debt are likely looking for certain answers.

Foreclosure scam results in prison sentences for 3 men

For many Washington residents, owning their own home is the culmination of a long held goal. A great deal of pride comes from purchasing a home of one's own, and when that home is threatened due to financial pressures, the stress can be unbearable. Many homeowners will go to great lengths to keep their property out of foreclosure, and that leaves them vulnerable to many different types of scams.

An example lies in a scheme that led to prison sentences for three men. The group ran a company known as Star Reliable Mortgage, which promised distressed homeowners a chance to own their homes "free and clear." The company collected up-front fees, and in return filed fraudulent documents in county court offices. One approach was to file fictitious trust documents to make it appear that a different party was a trustee for a property. That slowed down foreclosures in a process known as "clouding the title" of a home.