A recent article in the California Law Review Online declared that, “The coronavirus pandemic is set to metastasize into a debt collection pandemic. This is because while evictions, foreclosures and student loan payments have been stayed by various government  orders and federal regulations, there is no blanket moratorium or order stopping debt collection lawsuits. Many debt collection law firms have ramped up credit card collections lawsuits since they have not been able to bring or finish foreclosure lawsuits. Many credit card collection lawsuits end up with the consumer getting a default judgment entered against them, since they believe there is nothing that they can do to stop these lawsuits. Debt collection law firms nationwide kept filing new cases during the shutdown, consumers be damned. For example, in Maryland, two major debt collectors alone filed over 2,000 suits in April.  These law firms must keep their gravy train rolling, even if many Americans have lost their jobs or part of their income, through no fault of their own.

After a homeowner gets a judgment against him or her, the law firm will usually attempt to get paid–voluntarily at first, and then by using court process to take the homeowner’s income and assets. There are several ways in Florida that a judgment creditor can collect on a judgment.

Americans who have become used to using credit cards as a stop-gap measure to survive pay-cuts might not be able to rely  on this method since nearly 50 million Americans just had their credit card limits cut.

For centuries, companies have used bankruptcy as a tool to survive, reorganize or to shut-down. Several airlines have filed bankruptcy over the past three decades, primarily to break contracts and modify pensions.

Our lives have changed in a flash.  The Associated Press warns that Americans must brace for new life of no school and growing dread.  We now spend more time in line at Walmart buying toilet paper than we do lining up for Black Friday sales. Parents worry about their jobs while they wonder who’ll watch their children while they are at work since schools have extended spring break or shut down for weeks.

The world has changed.  We are told to practice “social distancing” and not come within so many feet of our fellow human beings. People are wearing medical masks and gloves when they go out. Some people walk around with Lysol bottles.

Credit Counseling

Let’s start with defining credit counseling. Credit counseling is when you work with an agency or company you have hired to help you come up with a plan to pay off your debt. However, you must be very careful when choosing a credit counseling agency as many charge high rates and do not actually help you pay off your debt as promised. I have many clients who have come to me after this specific experience. It is best to choose a not-for-profit agency.

It is important to note from the very beginning that credit counseling will not reduce your overall debt. The goal is to come up with a plan to pay off your debt over three to five years. Credit counseling is also not helpful for secured debts such as mortgages and car loans. While your plan can include your secured debts, it is meant to deal with unsecured debts such as credit cards and personal loans.

The number one pro that makes credit counseling v. bankruptcy in Jacksonville, Florida a better option to many is its effect on your credit score. Credit counseling helps you to bring credit accounts in default current and also helps you to lower your balances. Additionally, the fact you are in credit counseling will not appear on your credit report. Because of these factors, your credit score begins to improve almost immediately.

Bankruptcy

Bankruptcy is the legal process in which you are no longer legally liable for your debts because your debts are discharged. A Chapter 7 Bankruptcy is a complete liquidation of your assets in exchange for your debts being discharged. However, because you are allowed certain exemptions to protect your assets, it is possible to not actually lose any of your assets.

The number one pro that makes bankruptcy appealing to many is how quick the process is (around 120 days) versus a payment plan of three to five years through credit counseling. The other major pro of filing a Chapter 7 Bankruptcy is that you do not have to pay back your debts because your debts are discharged. Bankruptcy is also better equipped to help you deal with your secured debts.

The biggest drawback to bankruptcy is its harsh effect on your credit score. Your credit score will be affected as soon as you begin the bankruptcy process and the fact that you filed bankruptcy will appear on your credit report for seven to ten years. However, many are surprised to learn they actually receive credit card applications in the mail shortly after their debts have been discharged. This is because creditors view those coming out of bankruptcy as good candidates to extend credit to because of the very low debt to income ratio. Not only are you able to obtain a new credit card shortly after bankruptcy, but many of my clients have obtained new car loans and mortgages as well. Therefore, although the fact you filed bankruptcy will remain on your credit report for seven to ten years, it is not a complete bar to obtaining new credit for nearly as long.

When weighing your options of credit counseling v. bankruptcy in Jacksonville, Florida, which option is best for you largely comes down to which pros and cons are most important for you and how quickly you wish the process to be completed. A Chapter 7 Bankruptcy is by far a much faster and less expensive process as it is over within a few months rather than several years and you do not have to repay any of your debts. Contact the Law Office of David M. Goldman, PLLC today to speak with an experienced bankruptcy attorney that can help you better weigh your options.

Here are a few simple steps you can take to rebuild your credit score after bankruptcy quickly.

Secured v. Unsecured Credit Card: Get a credit card shortly after your bankruptcy is concluded. Use it for a few purchases each month, but pay it off in full and on time. To put it as simply as possible, do not carry a balance. You will receive several credit card solicitations in the mail, but you might want to do your own research first before applying for the first credit card application you receive in the mail. Many will have horrible interest rates with very high annual fees. Look into getting a secured credit card instead. They usually will have lower interest rates and some do not have any annual fees.

Pay everything on time: As already stated above, pay your credit card on time. However, it is important to pay EVERY bill on time. Not just your credit cards. Being late just one time or on one payment can negatively affect your credit score.

Limit the amount of credit you apply for: It can be very difficult to stay away from applying for a lot of new credit. But is it important to make sure you do not get over your head in debt again and end up where you were prior to filing bankruptcy. So be very picky and do your research before applying for new credit.

Create New Habits: Do not regret any past decisions you made, they cannot be changed, undone, or forgotten. So take them as a lesson, learn from them and move on. Figure out what old habits helped you fall into debt and do not repeat them.

Bottom line, it is very possible to rebuild your credit score after bankruptcy in a lot less time than seven or ten years. You just need to set goals and stay on track.

Contact the Law Office of David M. Goldman PLLC today to speak with an attorney today. Not only can an experienced Jacksonville Bankruptcy attorney help you through the bankruptcy process, they can also help you prepare for success after bankruptcy by helping you rebuild your credit score after bankruptcy.

When I got that credit card, I was so excited to purchase a Coach wallet (my first very own big purchase) and vowed to not use the card again until it was paid off. Of course, I fell into the same trap as many other 18-year-olds and did not stop there. I wanted another credit card and went to my second favorite store and filled out another credit card application.

When I arrived at college that fall, I was shocked to see credit card company after credit company with booths set up on campus. They offered ridiculous free items to get students to sign up, and, guess what, it worked! The booths were always busy with students filling out credit card applications. I don’t know what kept me from filling out one of those applications (maybe it was that I already had one or that it had been drilled into me by my family never to purchase what you cannot afford) I never did and am so thankful today I did not.

Today, as a bankruptcy attorney, I now see many of those “students” needing to file bankruptcy, because they racked very high credit card bills on those credit cards before they had the experience or knowledge to understand the repercussions of using a credit card. They were young, excited to be away from home, and just wanted to have a good time.

Well that all changed with the Credit Card Accountability Responsibility and Disclosure Act of 2009, better known as the Credit CARD Act of 2009. The Credit CARD Act put restrictions on how credit card companies can advertise to consumers who are under 21 years of age. Specifically, credit card companies cannot mail advertisements to persons under 21 unless they “opt in” for such mailings. Credit card companies also can no longer use free gifts to get college students to apply for a credit card. Finally, if you are under 21, you will need to have a co-signer or prove you have your own independent source of income.

For some, this is a very good thing. For others, it could be a burden. It can be burdensome on those 18-year-olds who are ready to have a credit card and understand the significance of having one. It is also burdensome for parents who choose to become a co-signer for their child. If their child abuses the credit card, they run the risk of the child ruining their credit along with their own. Regardless, the Credit Card Act of 2009 is doing a lot of good in preventing many young people from ruining their credit before they even get the chance to build good credit.

If you have found yourself in this sort of situation, it is never too late to do something about it. By filing bankruptcy, you can discharge all of your credit card debt and get a fresh start at building a strong credit report. Contact the Law Office of David M. Goldman, PLLC for more information.

Most importantly, it is crucial to make note that the fact alone that your future spouse filed bankruptcy, regardless of when, is absolutely immaterial to your individual credit report. Your credit report will not merge with your future spouse’s credit report simply because you got married. You both will maintain separate and apart credit reports. In other words, your individual credit report will remain the same as it was before getting married. However, by being married, your spouse may have to sign certain types of contracts.

The main way your future spouse’s bankruptcy will affect you is when you want to borrow money, but only because you can only borrow as much as your credit profile will allow. When you are married, your borrowing ability is equal to your combined credit limits. In other words, your individual borrowing power will remain the same, but your combined borrowing power may be lower because your spouse’s bankruptcy may have lowered his or her credit score. Luckily, this is not necessarily the bottom line as there are some ways to get around this. One such way is to use a co-signer if you need to obtain new debt right away. Some banks might even have a program that will allow you to obtain a mortgage with a co-signer and then to refinance it without the co-signer a year later as long as you have made all of your payments during the first year.

Regardless of when you are planning to obtain new debt, the most important way to handle your future spouse’s credit history is to begin working towards improving his or her credit score. You can begin with them obtaining a new credit card in their name alone, using it, and paying it off monthly. Look at it as being 18 years old again. How did you build your credit? You most likely got a credit card, used it, made your monthly payments on time and slowly were able to obtain additional credit cards or other loans, which you also paid on time. However, be sure to shop around for the best interest rates and for credit cards that do not have annual fees.

If you or your spouse are considering filing bankruptcy, it is always best to be prepared. By meeting with an experienced bankruptcy attorney, they can help you further understand the consequences a bankruptcy might have on your credit as well as your spouse’s credit. Contact the Law Office of David M. Goldman, PLLC today for a free initial consultation.

The debt will have to be repaid.

At first, you might think that it is a good thing that your debt has been charged-off and you might even think that you no longer owe the debt. Unfortunately, when your bank decides your account is uncollectible, that is simply an accounting term. It in no way affects your liability for the entire debt owed. However, there is one caveat. The bank can only collect on the debt until the statute of limitations expires. In Florida, the statute of limitations for a credit card debt is five years.

You should expect your debt to be sold to a debt collector who will try to collect the debt.

In the majority of circumstances, the bank will not try to pursue the debt themselves, but instead, the bank will either hire a debt collector to try to collect the debt or the bank will sell the debt to a debt collector for pennies on the dollar. In either scenario, your payments will most likely be made to a debt collector instead of to the bank. Luckily though, you can usually reach a settlement with the debt collector for less than the full amount owed and then make monthly payments on the settled amount.

Your credit score will take a hard hit.

The charge-off will stay on your credit report for up to seven years and put a bad mark on your credit report. Not to mention the history of missed payments that were already there, which will make qualifying for new credit very difficult. The best thing you can do is to still pay the debt in full. This way the account will be reported as “charged-off, paid in full” instead of “charged off” or “charged-off, settled for less than full balance”. Lenders will prefer to see that the debt was paid in full even though it was paid very late.

If you have a credit card debt that has been charged off by your bank, contact the Law Office of David M. Goldman, PLLC today. By speaking with an experienced Jacksonville attorney experienced in not only debt collection related matters, but bankruptcy as well, you can determine what course of action you should take in order to cure your charged-off debt. Just because your debt has already been charged-off does not mean you are out of options. Speak with a Jacksonville Debt Collection Attorney today.

The good news is that bankruptcy will discharge the majority of civil judgments entered against you, but there are a few exceptions. It depends entirely on what the underlying debt was for and whether a lien has been placed on your real property. There are certain types of judgments that cannot be discharged with a bankruptcy.

The most common type of civil judgment is a judgment for unpaid debts, such as a credit card, medical bill, rent, repossession or personal loans, just to name a few. If your judgment is for a debt such as one of these, then it is most likely dischargeable through bankruptcy.

If the summons you received after bankruptcy is for a credit card or another kind of debt you believe was discharged in bankruptcy, then you need to respond to the summons stating that the subject debt was part of a bankruptcy. Before doing so, make sure the debt was properly listed on your bankruptcy schedules and it is a debt that can be discharged. If it was properly listed on your schedules and you received a discharge, then assert this in your response/answer to the summons. Once you show the debt was discharged, the action should be dismissed.

If you are unsure of what type of lawsuit you have been served with or whether the debt was properly included in your bankruptcy, you should consult with an experienced bankruptcy attorney. A simple review of the summons, accompanying complaint, and your bankruptcy petition by an attorney can help you determine what action, if any, you need to take. Contact the Law Office of David M. Goldman, PLLC by calling (904) 685-1200 to speak with an attorney today.