Blogs

Below are ways that your credit card balance can impact your future. Attorney Tom McAvity can answer any other questions you might have by giving him a call under the “contact us” section below.
How Credit Card Balance Can Impact Your Future
Credit card companies are great at sending you promotions where low interest rates are offered for cash funds or for offering low interest rates to transfer a credit card balance. The low interest rates can sometimes be as low as 0%. It may seem like you aren’t paying for your purchases for a while by using these amazing offers, but the promotional offers are known to be credit traps.
 
How Does the Trap Work?
In a prospering economy where most of their customers are gainfully employed, the main goal of a creditor is to make it as easy as possible for their customers to rack up as much debt as they can. A low minimum payment is a good way for someone to feel secure enough to spend a large balance on a credit card without feeling the immediate impact of a big ticket purchase. When consumer confidence is high, credit card companies benefit by gaining life long customers who may have a big credit card balance with them for many years to come.
 
The credit card companies will make their money from interest payments in the long run. Using a credit card that has a compound interest rate with a very small minimum payment allows your balance to grow even though you are paying the minimum payment amount required on a monthly basis. On a monthly basis, the amount that the interest is calculated from continues to grow. For example, if your interest on your balance is $125 and you are only paying a minimum amount of $70, an extra $55 will be added to the next month as the basis for calculating interest for the next period. In short, as the balance goes up, so do the interest payments.
 
But Wait… There Is Another Way That Credit Cards Are Hoping To Make Money
It’s not just from interest that credit card companies are hoping to earn your hard earned money. They also want to sprinkle in some late payment fees. The more balances you have on credit cards, the more likely it is that you may just miss a payment one month and forget to pay it. They are hoping that your email inbox is swamped with a ton of junk email and the late payment warning goes unnoticed, if they even send an email for that. Once you miss a payment, a fee can be attached to your next credit card balance and if you miss another one, fees can add up. There are several imaginable scenarios that could cause you to miss a payment even though you are normally a responsible person.
 
In Tough Times, Your Credit Cards Will Be There
The previous strategies can work when customers are employed and making payments, but when times go bad, that is when credit card companies can really strike! The promotional offers get even more enticing when funds are short. They can help you postpone payments from other cards at a rate of 0%. Well why not? You might ask. You can postpone payments until times get better and you get that better paying job. What if that better paying job doesn’t come around for longer than the promotional 0% APR expires. Now you are left with late payments which cause additional fees to be added to your credit card balance and interest compounding on those higher balances. Just when you think it can’t get any worse, credit card companies will increase your interest rate and cut down your balance limit on your card. So now you can’t spend anymore money on the card, but the actual balance has grown significantly and continues to add up more and more every month just from high interest rates.
 
This is the ideal scenario for credit card companies. At this point, your balance is growing and your minimum payment has come to a point where you cannot afford to pay them because you are unemployed. Unemployment rates are currently 4.1% in Salem, Oregon according to The Bureau of Labor Statistics. This looks like the end for the credit card company getting any more of your money. Now you are so angry that they have increased the interest and added fees that you refuse to pay them anything at all. You will live with the late payments because what they are doing to you does not deserve any more payment for their unethical business practices. The only problem is that this is again another favorable situation for a credit card company.
 
Now they can take you to court and sue you for the balance. After they get a judgment, they can intercept your paycheck in a wage garnishment or they can add a lien to your home. It still does not end there. Even after a judgment in court, a creditor can still continue to charge you interest and fees.
 
This credit card trap is a trap that has worked on people year after year. Some people even fall into the trap multiple times. It is in these situations that you need to take a step back and find information you need to eliminate the debt as soon as you can.
Contact Us Today
While dealing with financial complications can be overwhelming, Tom McAvity can help you manage your unique circumstances and help you break this pattern of debt. You can eliminate credit card debt in a Chapter 7 bankruptcy filing and we can help! Please contact Northwest Debt Relief Law Firm by calling (971) 600-2828 to schedule your personal consultation.
 
The post How Credit Card Balance Can Impact Your Future appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.

To many people, falling behind on credit card payments means a ruined credit score and an endless string of calls and letters from collectors. If you let those calls and letters go unanswered for long enough, however, the credit card company may decide to file a lawsuit.
These lawsuits, usually filed in state and local courts, are increasingly common and can have devastating financial implications. Wages and bank accounts can be seized to collect on the resulting judgments, which continue to accrue interest for years to come. Four million Americans had their wages garnished over consumer debts in 2013, and reports indicate that Black communities are hit much harder by debt collection lawsuits than others.

Once you understand how credit card lawsuits work, you can prevent the financial devastation that comes with a judgment against you.Click To Tweet
Buying Credit Card Debt Is Big BusinessPast due credit card accounts are sold along with thousands of others to a debt buyer such as Midland Funding or Portfolio Recovery Associates. These companies buy credit card and other consumer debt accounts at steep discounts with the expectation that they will collect enough to make a profit overall.
The business model works. PRA Group, the publicly traded corporate parent of Portfolio Recovery Associates, reported net income of $86.9 million in the fourth quarter of 2017. Encore Capital Group, Inc., the largest publicly traded United States debt buyer by revenue and parent company of Midland Funding, reported revenue of $1.19 billion in 2017. These numbers have caused thousands of smaller players to enter the market, each one buying thousands of credit card accounts and employing people all over the world in a determined effort to squeeze the last dollar out of your wallet.
How Do Debt Buyers Make Money?When a debt buyer purchases your credit card account, the first thing they do is send a letter or make a phone call asking you to make a payment. By the time that happens, you have been getting the regular statements for a few months.
The collectors know the psychological effects of past due debt, and use it to their advantage as a way of getting you to pay the credit card balance.
That initial contact is terrifying. You are distressed about not being able to pay, and admitting it to a faceless collector on the phone heightens the negative feelings. As a result, you’re likely to begin screening your calls and letting the mail pile up unopened.
The calls and letters increase in frequency and intensity, and the account will get transferred from one collection agency to another. Each subsequent debt collector will be more aggressive than the last, knowing full well that they are unlikely to get you to pay the credit card debt just because you’ve been asked to do so.
As the psychological pressure increases, it becomes clear that the goal is to scare you rather than extract a voluntary payment.
Collectors Use the Court System to Maximize ProfitsMany people think debt buyers prefer to avoid lawsuits to collect old credit card debts because it requires them to pay lawyers and incur costs of litigation. If this were true, however, credit card lawsuits would be far less common than is the case. In fact, there were nearly 200,000 credit card collection lawsuits filed in New York in 2011 alone. Moreover, a report by ProPublica found that these lawsuits accounted for 48% of the court judgments filed in New Jersey in 2011.
Credit card lawsuits are common because they are profitable. Over 95% of consumers do nothing when they receive court papers because they have become convinced that there’s no way to prevent a judgment from being filed against them. Some end up filing for bankruptcy, but most people accept the consequences of a court judgment.
Those consequences can include wage garnishment, funds seized from bank accounts, liens on property, and even the forced sale of automobiles and other assets to pay the debt. What’s worse is that the judgment continues to accrue interest, rising steadily over the years as the balance remains unpaid.
How Collectors Train You to Ignore The LawsuitWhen you get court papers about a credit card lawsuit, you have a choice: take no action, or use the laws to level the playing field.
The debt collectors have done everything possible to convince you they have all the power, but that’s not true. Being sued for a credit card debt merely means that someone is claiming you borrowed money, that you failed to pay, that the balance is what they claim it to be, and that you are legally obligated to pay this company.
Do nothing, and the court will assume the debt buyer is telling the truth. If you defend the case, however, you can force the credit card company’s lawyers to prove every claim they have made against you.
Defending the case forces the collection attorney into a defensive posture because their entire business model depends on you taking no action. Not only do the statistics bear this out, so do your actions up to the point when you got sued – you didn’t make payments, you didn’t answer the phone calls, and you didn’t respond to the letters.
In other words, the entire collection process is designed to condition you to do nothing. Like a sick psychological experiment, you’ve been unwittingly trained to be passive in the face of the credit card collector.

Debt collection calls and letters are stressful, so people avoid them. By the time the collector sues, avoidance has become psychologically engrained. Collectors get judgments because people ignore court papers.Click To Tweet
Take These Steps Instead of Accepting a Judgment Against YouHere’s what you’re going to do.

1. Don’t panic. Nothing terrible is going to happen to you so long as you keep on top of the situation.
2. Identify who’s suing you. This is the name you’ll see before the word, “Plaintiff.”
3. Identify who’s being sued. This should be your name. If your name doesn’t appear here then you’re not being sued. If someone else’s name appears with yours, that person is also being sued – you should have a talk with them about what’s going on.
4. Note the name of the law firm representing the Plaintiff. These are the people you need to communicate with from now on. The creditor won’t communicate with you directly anymore (that’s why they hired the lawyers).
5. Write down the date, time, and how you got the papers. Remember, you’ve got a limited amount of time to do anything about the lawsuit before the court enters a judgment against you. Better to know when the clock starts running than to guess about it later on.
6. Review the claims. You’ll want to read the Complaint carefully because it will give you valuable information about the name of the original creditor (the debt may have been sold or transferred, so the Plaintiff may not be the same as the original company) as well as the amount of money they claim you owe.
7. Organize any documents you have. Go through your files, bank account records, and old mail to get any information you may have about the credit card debt. Even if you don’t think a document is important, it may contain helpful clues.
8. Get your most recent paystub and tax return. These financial documents will help analyze your ability to pay a settlement or judgment, as well as to understand what you may have at risk in the event of a wage garnishment or bank account freeze.
9. Talk with a collection lawsuit defense lawyer. You aren’t legally required to have a lawyer represent you in court, but you should make sure to talk with an attorney who practices in the field of collection lawsuit defense. Even if you don’t hire that attorney or decide to go it alone, it’s important that you have all the information you need to figure out if you’ve got any valid defenses or should use the magic words. An attorney will also tell you how long you have to file papers with the court to protect yourself – and what the impact of a judgment will be on you.
10. Show up. You have to either hire a lawyer or go to court to file papers within the period of time provided for under the law (a phone call to the credit card company’s lawyers won’t protect you). If the court schedules a hearing, you or your lawyer have to appear in the right place and at the right time. When a trial is scheduled, you need to be there as well. If you don’t do what you’re required to do, the creditor wins a judgment against you. That’s why it’s important to always show up – there’s no legal excuse for forgetting to file papers with the court or for failing to hire a debt collection lawsuit defense lawyer on time.

Over Your Head? Here’s Where to Get Help.The mechanics involved in defending a credit card lawsuit can be confusing. Pleadings need to conform to certain standards, and making a mistake could mean the difference between success and failure. That’s why it’s a good idea to get some help before venturing into the courtroom on your own.
I’m available to speak with you if you’re being sued in either New York or California, but I may not be the right lawyer for one reason or another. If you’re looking to go it alone, many courts have weekly or monthly events when you can speak with a volunteer lawyer to get tips on defending yourself. Go to the courthouse and speak with the clerk to learn about the resources available in your area.
Free and low-cost legal services are also available for people who have incomes below certain thresholds. Get in touch with the bar association (a good starting point is to search online for “bar association near me”) and ask about pro se (that’s the legal term for someone who handles their own case without a lawyer) resources.
No matter what you do, one thing is for certain: when facing a credit card lawsuit, don’t ignore it. Your financial future is at stake.

The post 10 Steps To Take If You’re Sued For A Credit Card Debt appeared first on Shaev & Fleischman P.C..

Answers to questions when Filing a Chapter 7 or Chapter 13 Bankruptcy in Seattle, Washington from Lawyers at Northwest Debt Relief Law Firm.
Disclose All of Your Income, Expenses and Assets
Anyone that files for bankruptcy protection must disclose all income, expenses and assets in their petition.  The backbone of bankruptcy is the automatic stay, but the body is treating creditors according to the type of debt owed and the priority of payment of debts required under the bankruptcy code.  Without full disclosure treating all parties fairly cannot take place.  It is not the bankruptcy court’s duty or the duty of the trustee assigned to your case to find assets.  It is the bankruptcy filer’s duty to be open and honest about their income, expenses and assets in exchange for the discharge of their debts.  If you have not fully disclosed everything you may not only lose your right to a discharge of your debts, but criminal charges could be filed and fines imposed.
Do Not Borrow Funds or Take an Early Withdrawal from an Individual Retirement Account or 401(k) Plan
Bankruptcy provides exemptions to protect assets such as retirement funds.  We meet with client after client that has unfortunately borrowed or withdrawn from their retirement accounts all of their retirement money trying to pay off debts or stay afloat.  You must weigh all the positives and negative before choosing to withdraw or borrow against your retirement accounts.  Bankruptcy provides exemptions that can protect for the average person all of their retirement funds.  You can file bankruptcy and still keep your retirement.
Do Not Transfer Money or Assets to Friends or Family Members
The simple transfer of a car to a friend or family member before filing bankruptcy to reduce your assets is not allowed.  It must be disclosed and will only complicate your bankruptcy case.  When filing bankruptcy the sole goal is to successfully discharge all of your eligible debts.  Transferring assets in an attempt to hide assets will only complicate your bankruptcy case and possibly have your right to a discharge take away.
Do Not Continue to Use Your Credit Cards
One of the most common complications in a consumer bankruptcy is the use of credit close in time to filing for bankruptcy.  The problem is the recent use of credit is circumstantial evidence that the user never had the intent to pay the debt back.  If you are unable to pay your bills as they come due how can you incur more debt?  If you are not making payments to your creditors do not continue to use your credit cards.  If you are having trouble paying your credit cards and are missing payments regularly you need to stop incurring more debt.
Save Your Pay Stub or Proof of Income Each Month
In 2005 Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) changing the bankruptcy code and creating what is commonly called the Means Test.  The Means Test is based upon local and national standards for expenses.  The Means Test also uses the six-month average of your gross income extrapolated to 12 months.  You will need all six months of your pay statements or other proof of income.
Do Not Take a Cash Advance on a Credit Card
Taking a cash advance close in time to filing bankruptcy can be a huge problem.  This can be a problem for the same reasons detailed in Number 4 listed below.  It really depends upon the circumstances, but if you take a $5,000 cash advance on a credit card three weeks before filing bankruptcy you will probably hear from the credit card company when you file bankruptcy.  An adversary alleging fraud could be the likely result.
Review and Document Self-Employment or 1099 Income
If you are self-employed or receive 1099 income it is essential that you know what your income is and what your expenses are for each of the six-months prior to filing for bankruptcy.  Just like in Number 6 below, the Means Test uses a six-month average of your income to determine if you have disposable income available to creditors each month.  Determining what your take home pay is when self-employed or receiving 1099 income is always more time consuming, but absolutely necessary prior to filing bankruptcy.
Make Sure All of Your Tax Returns Are Filed
In 2005 the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) provided new guidelines for the filing of tax returns and bankruptcy.  If you file for bankruptcy you will need to provide your tax return for the previous year, or the current year if requested.  If you fail to file your return that becomes due after you file for bankruptcy the IRS can request dismissal of your bankruptcy case.  Section 1308 of the Bankruptcy Code requires filers of chapter 13 bankruptcy cases to have filed all of their tax returns for the previous four years before the filing of the bankruptcy petition.  This is one of the standard questions asked by the standing chapter 13 trustee at the meeting of the creditors.
Review Your Monthly Expenses
All consumer bankruptcy petitions include Schedule J.  Schedule J is the estimate of the average or projected monthly expenses for your household at the time the bankruptcy case is filed.  Prior to scheduling a free consultation with an experienced bankruptcy attorney take a few minutes and review your bank account statements and get a better idea of where your money is going each month.  This will help to determine if you have any disposable income available to creditors.
Do Not Wait To Speak To An Experienced Bankruptcy Attorney
Even if you are not ready to file bankruptcy speaking with an experienced bankruptcy attorney will give you the information you need to make educated decisions.  To determine if you are speaking with an experienced bankruptcy attorney, ask the attorney how many other areas of law they practice, how long they have practiced bankruptcy law, how many bankruptcy cases have they filed and to name the trustees in the jurisdiction and what document requirements each trustee requires.  If the attorney does not know who the trustees are and what each of them requires they do not regularly file bankruptcy cases.  One the most common problems we face is meeting with potential clients when it is already too late.  If you have been served with a summons and complaint you need to speak with a bankruptcy attorney.  If you owe taxes and the IRS or FTB has indicated, they are going to garnish your wages you need to speak with a bankruptcy lawyer.
Contact Us Today When Filing a Chapter 7 or Chapter 13 Bankruptcy in Seattle, Washington
While dealing with financial complications can be overwhelming, Tom McAvity can help you manage your unique circumstances. If you have additional questions regarding bankruptcy, contact Northwest Debt Relief Law Firm by calling our Seattle location at (206) 486-1280 to schedule your personal consultation.
The post The Top 10 Things to Do Before Filing a Chapter 7 or Chapter 13 Bankruptcy in Seattle, Washington appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.

Answers To Common Bankruptcy FAQ
If you have questions about filing for bankruptcy protection in the state of Oregon, attorney Tom McAvity has extensive knowledge of bankruptcy law and can provide sound legal counsel. To answer your bankruptcy FAQ, we can review your financial needs in a personal consultation with a Bankruptcy Lawyer in Portland Oregon to ensure you understand your legal options. For individuals in Portland, OR, our team can help you design financial goals suited to your unique circumstances and determine if bankruptcy is right for you.
 
What Can Bankruptcy Do for Me?
Bankruptcy can eliminate any legal obligation requiring you to pay all, or most of your debts. In some circumstances, it can stop the foreclosure of property by issuing an “automatic stay,” protecting your car or home. Bankruptcy can also ensure your utilities remain on, while you catch up on any missed payments. Filing for bankruptcy can put an end to wage garnishments and prevent creditors from attempting to collect unpaid balances.
 
Bankruptcy can eliminate any legal obligation requiring you to pay all, or most of your debts.
 
Is There Anything Bankruptcy Cannot Help Me With?
Filing for bankruptcy will not discharge debts that bankruptcy law singles out for special treatment. You must continue to pay child support, alimony, some student loans, restitution orders, and criminal fines even after filing for bankruptcy.
 
What Type of Bankruptcy Am I Able to File for?
Chapter 7 Bankruptcy: This option is appropriate for those with low incomes or for individuals with extensive expenses. Also called “straight” or “liquidation” bankruptcy, Chapter 7 allows you to sell certain types of property to pay creditors. Chapter 11 Bankruptcy: Also known as “reorganization,” Chapter 11 bankruptcy is designed for businesses with very large debts. This option enables organizations to pay debt over time.  Chapter 12 Bankruptcy: This form of bankruptcy provides debt relief for family farmers or fishermen. It enables these individuals to restructure their expenses to avoid foreclosure.
Chapter 13 Bankruptcy: This type of bankruptcy is best for individuals with a regular income. An individual can design an installment plan to pay debts back using their current source of income.
Will I Have to Appear in Court?
In most bankruptcy cases, you will be required to meet with creditors and the bankruptcy trustee to address financial information and answer questions. You will only be required to appear in court if you need to dispute a debt.
 
What Happens to Anyone Who Has Co-Signed On My Loan?
Unfortunately, if a friend or family member has co-signed on a loan, he or she may be liable for your debt if you file for bankruptcy. However, these circumstances may be mitigated by filing for Chapter 13 bankruptcy.
 
Will Bankruptcy Help with My Student Loans?
Generally, students will not be affected in bankruptcy. However, there are two exceptions to this rule:
If a student loan is not insured or guaranteed by a unit of the government, the loan may be discharged. If paying back the loan will “impose an undue hardship on you and your dependents,” then the student loan may be discharged.
Northwest Debt Relief Law Firm have Bankruptcy Lawyer in Portland Oregon that can review the details of your student loans to determine whether these circumstances apply to you.
 
How Can I Make Creditors Stop Calling Me Regarding My Past Due Bills?
When you file for bankruptcy, all creditors and bill collectors must stop collection efforts entirely once they are aware you have filed. If any creditor continues to try to collect after they have been made aware of your bankruptcy, they may be sanctioned in court.
 
Contact Us Today
While dealing with financial complications can be overwhelming, Tom McAvity can help you manage your unique circumstances. If you have additional questions regarding bankruptcy, contact Northwest Debt Relief Law Firm by calling our Bankruptcy Lawyer in Portland Oregon at  (503) 828-0964 to schedule your personal consultation.
The post Answers To Common Bankruptcy FAQ’s from a Bankruptcy Lawyer in Portland Oregon appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.