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While studies have shown that over the past year alone, bankruptcy filings have shown a slight decrease, this doesn’t necessarily mean the economy is improving.  A number of consumers have cut back on spending and borrowing since the housing market collapse in 2007.  But, as people try to stick to reasonable budget, dealing with other [...]

Were you aware that credit reporting agencies (Equifax, Experian and Trans Union) have assigned you a score which reflects the likelihood that you will pay a delinquent bill?  This collection score 1 helps bill collectors decide where to focus their collection efforts.Credit reporting agencies also offer “bankruptcy risk scores” which offer credit grantors a numerical rating score to determine whether a customer or potential customer is more or less likely to file bankruptcy.Financial data that may be buried in credit applications or public records can now be analyzed instantly by computer and reduced to a simple score 2These collection systems mean that if you owe money to credit card companies or other lenders and you have a good jobs, savings or checking accounts or other indicia of ability to pay you will receive more aggressive and harassing phone calls and are more likely to be sued faster.If you do get served with a collection lawsuit, do not ignore it.  In Georgia, you have only 30 days to file an answer before the lawsuit goes into default putting your paycheck and your assets at risk.Bankruptcy is obviously one response but you may have grounds to challenge the lawsuit or negotiate favorable payment terms.  If Ginsberg Law Offices can be of assistance to you in the event of a debt crisis, please call us at 770-393-4985 or click here to email us.

1. The collection score product is described in more detail here, in a brochure published by the Fair Isaac Company, the organization that also provides credit scoring algorithms for the credit reporting agencies. ↩
2. My professional colleague, Long Island, New York bankruptcy lawyer Craig Robins writes more about bill collection and bankruptcy in his excellent Long Island Bankruptcyblog.  Thanks to Craig for his excellent post about automated bill collection systems, which you can read here. ↩

The post Why Some People Face More Bill Collection Harassment than Others appeared first on theBKBlog.

The Wall Street Journal notes that people who file for Chapter 13 bankruptcy often end up owing more on their student loans at the end of the process.
If you file for bankruptcy, you’re most likely not going to be able to get rid of your student loan debt.
Though you know you’ll be responsible for the balance at the end of the bankruptcy, you may not realize that interest continues to build while you’re going through the process.
Here are some ways to deal with the situation.

Continue Paying The Loans During Chapter 7 Bankruptcy
One of the reasons why the loan balance goes up is because you’re not paying it down. The interest capitalizes, which means that interest becomes principal once it’s accrues. In the end, you’re paying interest on your interest.
If you’re in a Chapter 7 bankruptcy, there’s no reason to stop making student loan payments while your case is winding through the court system. Continue making payments and your balance will continue to go down.
See also:

• Chapter 7 Bankruptcy Basics
• How Long It Takes To Complete Your Chapter 7 Bankruptcy Case

Restructure Loans Before Filing Chapter 13 Bankruptcy
Under Chapter 13 bankruptcy, chances are good that your court will force you to make your student loan payments inside your Chapter 13 Plan. If that’s the case where you’re from, then you should do what you can to lower the student loan payments before your case is filed.
Some options for lowering student loan payments include consolidation and looking into an income-dependent repayment option. Finalizing the process before jumping into the bankruptcy court will make it more likely that the amount being sent to your student loan folks by the Chapter 13 trustee cover the interest payments.
See also:

• Chapter 13 Bankruptcy Basics
• Federal Student Loans? Choose Your Repayment Options Wisely!
• Taming The Federal Student Loan Beast With Income-Based Repayment

Pay The Student Loan In Full During Your Chapter 13 Bankruptcy
It’s a long shot, but if you can fund a Chapter 13 Plan that pays off the student loan in full then you will be able to avoid the post-bankruptcy interest charges.
I know, I know – that’s nearly impossible. Still, I had to say it.
Consider Multiple Bankruptcy Filings
If possible, look into a Chapter 13 bankruptcy after wiping out the rest of your debts in Chapter 7. Doing so ensures that all of your payments under your Chapter 13 Plan go to the student loan companies.
That, in turn, maximizes the chances that you can pay down the loan during the 3-5 year term of your Chapter 13 Plan.
When All Else Fails – Relax
If you’re filing for bankruptcy, you’re doing it because you’ve got debts you can’t pay. Working through those issues will put you in a better position to handle your student loan debts later on.
It may not be a perfect plan, but it’s better than doing nothing.

Miami Personal Bankruptcy Lawyer Jordan E. Bublick has over 25 years of experience in filing chapter 13 and chapter 7 bankruptcy cases. His office is centrally located in Miami at 1221 Brickell Avenue, 9th Fl., Miami and may be reached at (305) 891-4055.  www.bublicklaw.com

It is reported in the media every day that many Miami and Broward homeowners are "upside down" or "underwater" with their homes. That is, they owe more on their mortgages than the value of the homes. Many homeowners financed their home on an "80-20" basis. That is, they borrowed 100% of the value of the home, structuring 80% of the borrowed sum into a first priority mortgage and 20% of the borrowed sum into a second priority mortgage. In many or most cases, the value of the home has fallen at least 20-30% at present and some experts expect a further substantial decline.

What is the Miami or Broward homeowner to do? The recently passed $700 billion bailout package did not include a proposed bankruptcy code amendment that would have given the bankruptcy courts the power to modify and reduce mortgages on principal residences and reduce them to the fair market value of the home that serves as collateral. It also appears that the various well publicized federal programs have not been widely used for a variety of reasons. Many homeowners also report that they get the "runaround" when they attempt to contact their mortgage company to arrange a modification or workout. Many homeowners find that they are unable to modify their first priority mortgage due to the last of cooperation by the second priority mortgage holder.

The distressed homeowner should be aware that Chapter 13 bankruptcy does offers various possible opportunities. First, if the value of the home has fallen so substantially that there is no equity to secure the second priority mortgage, this second mortgage may be "avoided" and deemed an unsecured claim. Unsecured claims are usually only paid a percentage on the dollar in Chapter 13, typically about 5 - 20%, and the unpaid balance discharged. This would present the homeowner the opportunity to negotiate a modification of the first mortgage without the necessity of placating the second priority mortgage holder.

Another benefit of filing for Chapter 13 bankruptcy is that it may present an opportunity to get the attention of the first priority mortgage company and negotiate a modification of the mortgage, including a reduction of the interest rate or principal balance. It may also present an opportunity to stop the foreclosure and give one enough time to review and obtain relief under any of the new federal programs being put into effect for distressed homeowners.

Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.