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Edmonds Bankruptcy Law Blog

Homeowners who were trying to avoid foreclosure were ill-served

According to the Consumer Financial Protection Bureau (CFPB,) a company that promised to assist homeowners who were at risk of losing their homes failed to meet that obligation. An investigation into the matter found numerous violations of loan servicing regulations, and resulted in a fine of more than $1 million. The move should serve as a cautionary tale for Washington homeowners who are facing serious financial strain, and looking for ways to avoid losing their home to foreclosure.

The action was taken against Fay Servicing, a company that has worked with more than 85,000 borrowers over the past decade. An investigation completed by the CFPB found that Fay Servicing kept borrowers in the dark in regard to their foreclosure prevention opportunities. In addition, the company moved forward with foreclosure proceedings on borrowers who were actively seeking foreclosure relief options, which is in violation of CFPB regulations.

Understanding credit utilization after Chapter 7 bankruptcy

Once a Washington consumer has taken charge of his or her financial future by seeking the elimination of unsecured debts, the next step is to begin rebuilding a solid credit score. Many people believe that completing a Chapter 7 bankruptcy will lead to a permanent black mark on their credit, and an inability to secure new lines of credit in the years to come. In reality, however, there are many ways to raise a credit score after a successful bankruptcy.

Understanding the role of credit utilization is an important part of that process. When looking to boost one's credit score, it is absolutely imperative to learn how those scores are calculated. While the exact formulas used by credit bureaus are not made known to the public, financial experts have determined the "weight" that various uses of credit are given when creating the scores. Credit utilization accounts for as much as 30 percent of the scoring rubric.

When will Chapter 7 bankruptcy drop off of credit reports?

When looking into debt relief options, many Washington residents will cast a wide net. Chapter 7 bankruptcy is a common choice, and one that can lead to the permanent discharge of many types of unsecured debt. However, many consumers are concerned about how long a personal bankruptcy will remain on their credit reports. A newly published article delves into the matter, and finds that a great many Americans will soon see their bankruptcy drop off of their credit histories.

Researchers believe that millions of Americans will soon enjoy a boost in their credit score as their Chapter 7 bankruptcy drops off of their current credit reports. This is due to the fact that around six million Americans sought bankruptcy protection due to to the decline in the housing market and overall economic instability, peaking in the year 2010. As we near the seven year mark on these filings, the bankruptcies will begin to drop off of individual credit reports.

Consumers must be wary of the threat of debt relief scams

A college education can prepare an individual for a great many challenges, but few students are prepared for the heavy load of debt that they will face shortly after graduation. In some cases, they will struggle for years to learn to manage that debt, and some will experience stress and anxiety as they try to make their student loan payments every month. Faced with a serious need for debt relief, many Washington residents are at risk of falling victim to debt relief scams.

One such operation has been halted by the federal government after scamming more than $11 million from individuals across the nation. The company, known as Strategic Student Solutions, promised students significant debt relief. In addition to reducing or eliminating student loan debt, the company also made promises of credit repair and other services.

New economic statistics suggest need for debt relief

Washington residents may be aware of recently released statistics concerning the total level of household debt among American consumers. It is estimated that total household debt has reached a new high of $12.7 trillion. That level is higher than the total debt held in 2008 at the beginning of the collapse of the global financial system, and could mean that debt relief is a growing need for many households.

Economists often relate high levels of household debt with economic stability. However, not all debts are the same. For example, it is estimated that 10.6 percent is accounted for by student loans. Getting an education is always a positive choice, but when new graduates are saddled with high student loan debt burdens, they often postpone significant milestones such as purchasing a new house, car or other big-ticket items. That can stunt economic growth, which can have an impact on the economy as a whole.

The impact of Obamacare on medical debt

A great deal of media attention is in place on the Trump administration's effort to repeal and replace the Affordable Care Act. Politicians and citizens alike tend to have very strong opinions on the matter, and health care is a topic that is heavily debated both in Washington homes and on Capitol Hill. One aspect of the ACA that is often overlooked, however, is the impact that Obamacare has had on medical debt. Recent research suggests that personal bankruptcy filings are down as a result of the ACA.

According to a study recently published by Consumer Reports, personal bankruptcy filings are down by nearly half in the years between 2005 and 2016. It must be noted that part of the reason for that decline lies in overall economic improvement and changes to bankruptcy law that made personal bankruptcy harder to file and more expensive. However, the fact that millions of Americans have access to health coverage has also played a role.

Helping seniors find swift, lasting relief from bill collectors

As many Washington residents move through their lives, they envision their retirement years as a chance to slow down and take the time to enjoy their family and their hobbies. After all, many people work hard for the bulk of their adulthood, setting aside their own interests to support their family and making sacrifices to move ahead in the workplace. Reaching retirement should be a welcome change of pace, and not a source of new types of stress. However, that is the reality for some older Americans who are plagued with high levels of debt, and in need of relief from bill collectors and other financial pressures.

There is nothing to be ashamed of for most people who fall into heavy debt. Those obligations are often the result of an unplanned illness or injury, an unexpected job loss or the need to support various family members through tough times. For many people, overwhelming debt creeps up over time, and does not become readily apparent until the time comes to retire.

Best practices for effectively managing medical debt

Ask many people who have lived through a serious medical event what was the hardest part, and many will say that it was not anything that happened in the hospital or doctor's office, but the resulting debt that followed. Medical debt can be stressful, and it often takes far longer to get out from under those financial obligations than it did to recover from the illness or injury that led to the debt. The following information is offered to Washington residents who are facing serious medical debt, and looking for relief.

One thing that is important to understand is that just because a bill has a number on the bottom line, that number is not necessarily accurate. The billing process has multiple steps and passes through many different hands. Each one of those individuals can make a mistake, as can the computers that process the bills. Check each and every bill for accuracy, and don't be shy about challenging charges that seem off.

Reasons to consider filing for Chapter 7 bankruptcy

Most Americans are aware that there is a legal path out of crushing levels of debt. For most people, that path lies in Chapter 7 bankruptcy. While filing for bankruptcy is never a decision that should be made lightly, there are a number of reasons why bankruptcy is a good option for many Washington residents. The following points focus on the pros and cons of this course of action, in the hopes of making the decision on whether to file easier for individuals and families.

One of the primary benefits to seeking bankruptcy protection is the immediate cessation of all collections efforts. Once the paperwork is filed, no further collection efforts can be made, pending the order of the court. For those who feel that they are under constant attack by bill collectors and creditors, this can bring a significant degree of relief. Even better, Chapter 7 bankruptcy can lead to the discharge of many types of consumer debt, leaving individuals with a far less complicated financial landscape.

The number one tip for avoiding debt after bankruptcy

Each and every year, thousands of Washington residents find relief from overwhelming levels of debt. For many, that path is through personal bankruptcy, which can lead to the discharge of many types of consumer debt, including credit card debt. In the years that follow bankruptcy, it is absolutely essential that individuals understand how they got into debt in the first place, so that they are able to avoid sinking back into financial turmoil. Acknowledging past choices and making changes to current behavior is key to achieving lasting financial stability.

For many people, extreme levels of debt was never something that they planned. People tend to adjust their spending and their lifestyle to keep pace with their level of income. As they begin to earn more, they often purchase a bigger house, better toys and more expensive daily purchases than they made when money was harder to come by. Over time, that can lead to a scenario in which the bulk of monthly income is going right back out again to cover debt service.