The main issue is that a large portion of your payment goes towards the interest, rather than the principal balance. This means that you’re not significantly reducing your debt, and it could take years, even decades, to pay off. Additionally, consistently making only the minimum payment can negatively affect your credit score, as it shows lenders that you may be at risk of defaulting on your debt.

Why Should I Consider Chapter 7 Bankruptcy Relief?

Filing for Chapter 7 bankruptcy is not a decision to be taken lightly, but in certain circumstances, it may be the best option. If you’re struggling with insurmountable debt, Chapter 7 can provide a way to discharge most, if not all, of your unsecured debts. This includes credit card debt, medical bills, and personal loans.

While it’s true that a bankruptcy will appear on your credit report for up to 10 years, it doesn’t mean that you’ll be unable to obtain credit during this time. In fact, because Chapter 7 discharges your debt, you may be in a better position to manage new credit responsibly.

Will Chapter 7 Bankruptcy Ruin My Chance of Future Credit Approvals?

Bankruptcy, including Chapter 7, is a legal tool designed to help individuals and businesses overcome financial hardship. It’s not a sign of personal failure or something to feel guilty about. Many people experience financial difficulties due to circumstances beyond their control, such as job loss, medical expenses, or divorce.

While it’s natural to feel some level of guilt or embarrassment, remember that seeking help is a sign of strength, not weakness. Bankruptcy is a step towards regaining financial stability and starting fresh. It’s important to consult with a knowledgeable bankruptcy attorney to understand your options and navigate the process effectively.

At Liviakis Law Firm, we understand the stress and anxiety that financial difficulties can cause. We’re here to support you and guide you through the bankruptcy process. If you’re considering Chapter 7 bankruptcy or struggling with minimum credit card payments, don’t hesitate to reach out to a knowledgeable bankruptcy lawyer. We’ll help you explore your options and find the best path forward for your unique situation.

The belief that it is better to have it now and pay for it later leads millions of Americans to buy things they can’t afford, only to leave themselves crippled with debt. There is a saying that unsecured debt is a perpetual cycle of debt. Otherwise known as the “credit card trap”, many people find they can only afford make the minimum monthly payments on their credit cards; which can lead to financial failure.

How Can I Escape Credit Card Debt?

If you have found that credit card debt payments are overtaking your monthly income and putting pressure on your ability to effectively manage your money, time is of the essence. Although unsecured debts like credit cards might lead creditors to garnish your wages for repayment, the credit card debt trap can reach further into your pockets than planned. Here are a few strategies for ending the cycle of credit card debt traps:

1. Track your spending. It can be easy to utilize an out-of-sight, out-of-mind mentality when it comes to spending on credit cards. Purchases via credit cards are often made impulsively, or because cash wasn’t readily available. To form a plan to eliminate credit card debt, you need to first know where it’s going. Take advantage of free budgeting tools in your online banking platform or an app on your phone. These tools also have goal setting features which help to reach your financial goals, or alert you when spending is reaching a limit. .
2. Stop the spending. If you want to pay off your credit cards, you need to stop using them. Put at least one card aside and commit to not using it until the balance is paid. Use cash or your checking for purchases. If you are unable to meet your monthly needs on your income without credit cards alone, you may need to speak with a Modesto bankruptcy attorney sooner than later regarding your options for eliminating other debts.
3. Prioritize and pay off one or more cards at a time. When choosing one of your credit cards to prioritize and pay off first, consider the card with the highest interest rate. This will help you save money in interest as you pay down the balance. Additionally, pay more than the minimum payment each month. If you only pay minimum payments, you are likely only paying for the interest that accrued that month; not making any headway on your principal balance.

If you are struggling to repay your credit card debt or want to learn more about how bankruptcy can eliminate credit card debt; contact our team of Modesto bankruptcy attorneys today at 916-459-2364.

According to Experian, the average credit card debt per borrower is $4,858. That’s not a small amount. The average interest rate on credit cards is around 15 percent, which means that the average credit card debt can cost you almost $1,000 in interest payments alone. If you’re carrying a balance on your credit cards and you can’t pay the full balance each month, then you’re probably going to have to pay a lot of interest. Here are a few questions to ask yourself to determine whether your credit card debt is working for you or against you.

What happens if I can’t pay my credit card?

If you don’t have enough money in your bank account or have no credit card limits, you can’t pay your credit card bill. If you don’t pay your credit card bill, you’ll have to pay late fees. You may also find that the bank can take you to court and sue you. If that happens, you’ll have to pay court costs and the bank’s attorney fees. If you lose the case, you’ll have to pay a judgment against you.

How can I resolve credit card debt?

If you’re having trouble making the minimum payments on your credit card, don’t ignore it. You can end up paying a lot more in interest. Your best bet might be to talk to the credit card company about making a payment arrangement. If you are already under collections from the credit card company or you are not able to make your future payments, you should contact an Elk Grove bankruptcy lawyer. An experienced lawyer can review all of your options for resolving your debt.

From data released from the Survey of Consumer Finances conducted by the U.S. Federal Reserve, the average amount of debt for most families is around $5,700, with 41% of households carrying some form of debt. The average amount of credit card debt for households for those with revolving balances is around $9,300. Even more consistent in this pattern is the some $10,000 in debt carried by those with a household net worth of zero or negative.

It is of no surprise that individuals with the least amount of assets or liquid cash also carry the most debt. While this correlation may not come as a surprise, the fact is that only a fraction of those people will actively work to resolve their debts. Further, an even smaller percentage of those will successfully eliminate their debts and regain financial freedom.

Cracking Credit Card Debt

One tool that can be beneficial for anyone facing serious debt problems is to file for bankruptcy. One of the biggest advantages bankruptcy can provide is protection from creditors and collections. Many people seek bankruptcy relief to stop harassing debt collection calls, halt eviction or repossessions, stop wage garnishments, and prevent some lawsuits.

Further, a bankruptcy can eliminate credit card debt easily. In a Chapter 7 bankruptcy, debtors may be able to have their credit card debts wiped out in a matter of months. However, not everyone is eligible for a Chapter 7 bankruptcy; in which, a Chapter 13 bankruptcy may provide for credit card debt relief through a series of affordable payments to the court.

If you are experiencing problems paying your debts or are crushed by expensive credit card payments, contact our Sacramento bankruptcy attorney office today at 916-459-2364.

There are a few reasons why your credit score may be low. First, you may not have established credit yet. Credit scores are based heavily on your credit history, e.g. loans you have taken, expensive items you have purchased, etc. If you have little or no credit, it will be difficult to have much of a credit score. However, having too much credit can also be bad. If you have high debt balances, have borrowed more than you can afford, or have missed credit payments; chances are your credit score has taken a hit. However, there are a few simple steps you can take to improve your credit.

First, obtain copies of your credit report from all three bureaus. The reason for this is that each of the credit reporting bureaus have unique formulas for calculating credit scores. Therefore, your score may be higher or lower with one bureau depending on the information reported.

Second, review your credit reports from each bureau carefully. There could be discrepancies in what is reported between the bureaus. If you only obtain the report from one bureau, you may be missing information reported to one bureau and not all of them. If you find any errors or misreported information, dispute it in writing to the credit bureau right away.

Third, develop a plan for disputing errors or misreported information on your credit report. Do you have impended lawsuits from a creditor? Have you been contacted by creditors about missed payments and owed debts? Are you concerned about wage garnishment or repossession of assets? If you answered “yes” to any of these three questions: stop and contact a Sacramento bankruptcy attorney right away.

An experienced bankruptcy attorney can halt your credit collections, and stop further damage to your credit report while you work out a plan with the court to resolve your debts.

Wage garnishment is legal order in which your employer is required to deduct money from your salary and wages to be paid to a creditor. Wage garnishment orders can demand portions of your paycheck for resolving debts like spousal/child support, student loan debts or payments due to a credit card company. However, it can only be done after a lawsuit has been successfully filed and ordered by the court. This means that you have a small window of time to develop a plan to resolve your debts before the garnishment order is issued.

The Automatic Stay

One of the fastest paths to stop debt collections against you in any form is to file for bankruptcy protection. In doing so, an order will be issued called the automatic stay. This order prevents further debt collection from being legally levied against you, including a wage garnishment. When in effect, the automatic stay stops all current collection actions and prevents additional collection actions while your debts are being resolved by the court.

The automatic stay in bankruptcies gives you protection from wage garnishment even if you have made a voluntary decision to file for it. You should determine the best way to deal with your debt. If you cannot cover it, it may be a good idea to consult with a Sacramento bankruptcy lawyer.

Credit card debt is a billion-dollar problem in America. Large credit card debt is always a cause of concern for an individual. Thus, a lot of people file for Chapter 7 bankruptcy to remove their credit card debt quickly and with minimal repayment of debts owed.

What are the possible consequences of having credit card debt?

If you fail to pay your credit card debt on time, you could face harassing debt collection calls, bad credit, and lawsuits. For example, missed payments often motivate credit card companies to raise your interest rate. The credit company could also charge late fees for unpaid debt. Sometimes, the credit company could also turn your account to a debt collector. Thus, you should always consider ways to either pay the debt or remove this debt off your card, and filing for Chapter 7 bankruptcy is a good way out.

Why is Chapter 7 filing always a good option?

It is often a challenging task to keep on paying your credit card debt each payment cycle, and on average, it takes over ten years to clear all of an individual’s credit card debts. Secondly, if you miss even a single payment or are late to it, then the credit card company raises your interest rates.

In such scenarios where the credit card debt keeps on rising, a Chapter 7 bankruptcy filing is a good option because it always removes almost all of your debts barring a few exceptions. If your debts get out of hand, then Chapter 7 can undoubtedly come to your rescue.

Credit Cards Debt that does not get removed by a Bankruptcy filing

You have to always keep in mind that there are certain transactions that a bankruptcy filing cannot erase. A bankruptcy court could find non-dischargeable transactions, including purchases of luxury items, fraudulent transactions, and payments made for alimony, student debts, and child support.

Contact a Sacramento bankruptcy attorney to find out how you can eliminate your unsecured credit card debt.

A common bankruptcy myth is that filing bankruptcy will ruin your credit for the future. The truth is, many people find their overall credit starts improving following a bankruptcy. While bankruptcy will be recorded on your credit score for up to ten years, it is not the end of the road for obtaining credit. You can slowly rebuild your credit score and return to your financial life before bankruptcy, along with some discipline and patience.

Consider a co-signer

Co-sign with a family member or friend to be qualified for better cards or loans and re-establish your credit much more quickly. When choosing this option, you should sustain an absolute payment record going forward, not only for your sake but also to protect your co-signers credit report.

Maintain the payment of your non-bankruptcy accounts

Do not neglect your other accounts that are not integrated into your bankruptcy, such as student loans. Any active non-bankruptcy accounts will eventually continue to affect your credit score, so try to pay any existing loans on time.

Solicit new credit frugally

A portion of your credit score depends on the number of new credit applications you make. Do not try to apply for various credit card or loan applications at once, especially when you get rejected because you might be seen as desperate for credit. Instead, focus on paying off your existing debts and try applying again after six months or so.

Avoid job hopping

Recurrent job changes will not influence your credit score, although lenders look beyond your credit report while you are applying, particularly after a bankruptcy. Holding many jobs in one year might show that you have issues with discipline or responsibility. You will not be the kind of borrower on whom a lender can rely on. On the contrary, if you have a stable job and you have maintained it for a while, it might be seen as a sign of stability so that it can swing a decision in your direction.

Take the process slowly. Don’t be in a rush, so you don’t find yourself surrounded by mistakes that will just postpone your credit repair progress. It will indeed take a few years, but you can eventually win back an excellent credit score.

If you would like more information about bankruptcy, contact a Roseville bankruptcy attorney today.

Credit card debt is a significant problem in the United States. Americans owed over a trillion dollars in credit card debt in 2019.

The Credit Card Accountability Responsibility and Disclosure Act of 2009 put federal rules and regulations on the use of debit cards. Financial institutions have lost income due to excessive bank fees no longer being allowed. Consumers must agree to overdraft before they can be charged an overdraft fee.

Encouraging Credit Cards

Banks are encouraging shoppers with great promotion rates, and 0% offers to obtain new credit cards. Banks receive more profit from credit card usage, than from debit cards. If consumers are hooked on credit cards, banks can replace the debit card usage fees in overdraft charges for interest rates and fees on the credit cards.

Cycle of Debt

One of the most common causes of financial issues is credit card debt. It can start a cycle of purchasing everyday items on your credit card when you have run out of paycheck. You tell yourself you will pay the balance at the end of the month, but often only the minimum amount due gets paid.

Bankruptcy can help you eliminate your credit card debt and stop the harassing phone calls and texts and emails regarding your credit card debt. A court order called the automatic stay protects you from any further collection activities while your bankruptcy case is active. If the creditor does not stop collection attempts made against you, you can take them to court, and they may be found in contempt and face penalties.

Contact a Roseville bankruptcy attorney to find out how you can eliminate your credit card debt today.

People are often hesitant about filing bankruptcy because of what it will do to their credit. They know that a bankruptcy can stay on your credit report for ten years. They should also consider that being behind in their payments can cause a negative impact on their credit report.

Things like late payments, over the limit balances, default on payments, foreclosures, evictions, repossessions, all stay on your credit report for at least several years. Prospective lenders will not look favorably on these negative marks and would weigh them along with a bankruptcy in terms of credit favorability.

If you are overwhelmed with debt, your credit score may not be the most important thing to worry about right now. If a lender sues you for nonpayment, it may be able to get a court-ordered judgment against you. This can involve a lien on your home or wage garnishment. None of those actions taken against you will help you get out of debt.

Bankruptcy

Instead of ignoring the calls and letters from creditors, you may want to consider filing bankruptcy. The creditors won’t go away, but bankruptcy can eliminate the legal obligation to pay on much of your debt. Your unsecured debt like credit cards, medical bills, payday loans, past utility bills, and personal loans can all be discharged in as little as four to six months in a Chapter 7 bankruptcy liquidation.

Saving your Home

If you have received notice of an upcoming foreclosure sale, a Chapter 13 bankruptcy may help you keep your home or other secured debt like a car. You can attempt to retain your assets in a Chapter 13 bankruptcy case if you are able to pay the arrears with a court-approved payment plan for three to five years. At the end of the payment period, any remaining unsecured debt will be eliminated.

Getting Credit

If, after bankruptcy, you pay your bills on time for a couple of years and do not acquire more debt, lenders will start to look more favorably on you when you apply for a loan. By avoiding the “No Credit, Bad Credit, Ok” lenders with their high-interest rates and unfavorable terms, you can set yourself up for better credit opportunities in the near future.

If you have more questions about your credit and bankruptcy, contact an Elk Grove bankruptcy attorney today.

Credit card debt is one of the most prolific types of consumer debt in California. In fact, the total credit card debt in 2018 for Americans exceeded $1 trillion. For the first time in history, this equates to an average household credit card debt figure of over $8,600. As such, individuals commonly approach a California bankruptcy attorney to discover if Chapter 13 bankruptcy can help them with troublesome credit card debt. Chapter 13 bankruptcy, or “reorganization bankruptcy” allows an individual to establish a repayment plan while eliminating or discharging any remaining amount at the end of that repayment plan. A Chapter 13 discharge can be quite helpful in dealing with excessive credit card debt.

How Credit Card Debt is Prioritized

Chapter 13 bankruptcy is helpful in eliminating credit card debt because of its ability to reduced unsecured debt within the US Bankruptcy Courts. When you file for bankruptcy in California, the bankruptcy trustee divides up your debt into three different debt classifications called priority debt, secured debt, and unsecured debt. This is the actual order that you must pay your debt, with priority debt and secured debt repayment being required. You pay back unsecured debt last but only if you can still afford to do so. Credit card debt falls into the category of unsecured debts, although some credit card companies can and will create credit agreements which are secured. For this reason, read your original credit card agreement to ensure that it is, in fact, an unsecured agreement.

How Much Credit Card Debt is Paid Back

How much credit card debt you will have to pay back in Chapter 13 bankruptcy depends on how much money you earn before and during your Chapter 13 repayment period. Your credit card debt repayment amount is also contingent on the amount of priority debt and secured debt you owe. To calculate how much of the credit card debt you will be liable for in Chapter 13 bankruptcy, look at your overall budget. Consider how much you can afford to pay based on income and expenses and deduct the amount of priority debt and secured debt that you intend to pay in the future. Any money left over from your Chapter 13 repayment amount goes toward paying back your unsecured debts. The balance between this amount and your credit card debt is discharged at the successful conclusion of your California bankruptcy.

Avoiding Lawsuits

Creditors have the right to file a lawsuit against consumers to force them to repay a debt by obtaining a judgment in a civil court. If you are currently being sued over a credit card balance, time is of the essence. Filing bankruptcy offers a consumer an automatic stay which can stop a credit card debt lawsuit in its tracks, but it is much easier to discharge this debt using bankruptcy than it is to clear up a lien on your property because of a judgment. Contact a Sacramento bankruptcy attorney if you have received a summons to court because of credit card debt to avoid further adverse actions.

Intent to Pay

If you use your credit card with no intent to pay for the items, the law presumes that these charges are fraudulent. Items obtain using fraud are not dischargeable in a bankruptcy, and it is much easier for a creditor to prove in a court of law that you never intended to pay for luxury items that were purchased using a credit card within 90 days of filing bankruptcy. The only way that this type of purchase can truly be discharged, is if an unforeseen life event pushed you into bankruptcy after making the purchases.

Cash Advances

When filing for bankruptcy protection, any cash advances totaling more than $950 within 70 days of bankruptcy may be exempted from discharge as well. The total amount must have come from one creditor and must have been used for consumer purposes and not business related. If these two standards aren’t met then the debt may be dischargeable.

Credit Card Debt in Bankruptcy

Credit Card debt in bankruptcy is typically the lowest priority for repayment, however, any debt incurred with your credit card debt by fraud will have to be repaid. It’s important to note that even if you didn’t intend to defraud your creditors by spending money on your credit card before a bankruptcy, the court may be inclined to believe that you have committed constructive fraud and will require you to pay back the credit card debt.

If you have made a number of purchases or taken out cash advances on a credit card it is typically a good idea to stop charging and wait before declaring bankruptcy. It’s important to discuss your credit card debt thoroughly with your Sacramento bankruptcy attorney before filing, in order to have a greater chance of your bankruptcy case being confirmed. Additionally, it’s important to be completely honest about your debt with your bankruptcy lawyer, as well as, the bankruptcy trustee in order to prevent your bankruptcy case being dismissed completely.

How Credit Card Lawsuits Happen

When you stop paying credit card payments, you are violating the original agreement you signed when you took out the line of credit. In many cases, the credit card company will actually sell your debt to a third party, debt buyer, mitigating the credit card company’s losses and making the debt collection firm the legal owner of the debt. The debt collection buyer will attempt to collect the debt from you and if unable to do so, will turn the matter over to an attorney who will file a complaint in the county you live in. You will then be left to file an answer to that complaint stating that you either admit or deny the debt.

Defenses to the Credit Card Lawsuit

If you deny the statements of the credit card company or debt buyer’s compliant, you are stating that the contents of the complaint are inadequate, the debt is too old, the credit card company failed to “state a claim”, or that proper notice of the lawsuit wasn’t given. By claiming that any of these situations are the case, you are raising what is called an affirmative defense to the lawsuit. With an affirmative defense, you are essentially arguing that even if everything is true, the lawsuit should be thrown out. The first step in collecting the necessary information you need is to file a discovery request with the courts. A discovery request asks the credit card company to provide information such as the original contract you signed, and other information pertinent to their lawsuit. This information can be used to further argue your case in some instances.

Outcomes of Credit Card Lawsuits

There are three primary outcomes that can arise from a credit card lawsuit. The best-case scenario is that the court rules in your favor and the credit card company can’t legally collect the debt from you. The court, however, may rule in favor of the credit card company and when this occurs they are awarded a judgment against you for a specific dollar amount. The credit card company can then proceed with a request to collect the payment that can include wage garnishments, property liens, and property seizures. The court may also dismiss the case, which can occur if the company wasn’t able to provide you with all the documents pertaining to your debt. If this happens, the credit card company can re-file a lawsuit later if they are able to correct the errors from the first case, so it’s important to ask the courts to dismiss the case “with prejudice” in order to prevent future credit card lawsuits involving the same debt.

Being sued is no light matter, and you should immediately work to defend yourself by hiring a Sacramento bankruptcy attorney familiar with debt relief if you receive a summons for a credit card related debt. There are many things that can be done, but you can’t bury your head in the sand and hope that the problem resolves itself.

Score Improving Credit Repair Solutions

• You can repair your credit score only when you are aware of what lies on your report. Check by requesting a copy of your latest credit report from any of the three credit bureaus. Analyze your report to determine all the financial pitfalls that have contributed towards your bad credit. Also, you can review your report for any false listing of late payments or inaccurate information that might be affecting your score.
• The truth is that a good 35% of your credit score is influenced by your payment history. Therefore, you must take care of your past-due accounts on priority. It is important to change their status to ‘current’ or at least ‘paid’. Whether charged off or not, clear off all your delinquent accounts. This will help you obtain a favorable account status that no longer hurts your credit score.
• Late payments end up showing as a blot on your credit report. On the other hand, timely payments will help make it spotless. Once you have cleared all your past dues, you can go ahead and work towards adding positive information. You can do this by taking out a fresh credit such as a loan or a credit card.

Remember, taking care of your finances as they come is the best strategy. It is a far better than ending up with delinquent accounts and a tarnished credit report. Repairing a credit report takes time and effort. but is possible. Your score can even be repaired following a Sacramento bankruptcy if done the right way.

Understanding Credit Card Debt

Always pay your credit card debt balances in full

The revolving debt on a credit card allows you to pay off your balances in small increments. Sometimes clearing them off in one go is the smartest way of avoiding accrued interest. This will help you in not only maintaining your credit health, but also in having a manageable spending pattern.

Establish and follow a budget

Always try to create a specific budget at the beginning of the month. Then, manage your purchases accordingly. In other words, try not to be tempted into purchasing that fancy home theater system on a whim. Even small purchases outside of your budget can add up.

Refrain from making cash advances

One of the worst ways of using your credit card is withdrawing cash advances on it. If you have to end up withdrawing cash from your credit card, it simply signifies that something is terribly wrong with your finance management. Establish a fixed monthly budget and also create an emergency fund so that you do not have to make a cash advance for unforeseen financial crises.

Avoid your late fees

Missing out on your credit card payments will not only imply hefty penalties and late fees but also damage your overall credit score. An effective way of avoiding late fees is making a schedule of your due dates and setting up reminders for payment at least a week in advance.

Most importantly, you must practice self-control while splurging on your credit card. Also, limit your number of cards, in order to keep your credit card debt to a minimum.

If you are struggling with credit car debt, contact a Sacramento bankruptcy lawyer to discuss your options.

Debt Stress Relieving Strategies

First, evaluate the level of need for your debts. Are you able to make your minimum payments or more each month? Are you having a hard time making ends meet and worry you might miss a payment? If your debts are mild or moderate you can likely manage your debts on your own with a plan.

There are some common ways to eliminate a mild or moderate debt problem. The “snowball method” is used often for people who have more than one debt account. Choose the account with the lowest balance. Pay minimum payments on all other debt accounts. Pay as much above minimum as you can afford on the chosen account. Move onto the next account with the highest balance once it is paid off. Afterwards, repeat this strategy until all of your accounts are paid off.

If you are looking for a quicker strategy and can afford to repay yourself, you could borrow from yourself. Take some money from your 401(k) or savings to pay off the balance in one lump sum. However, always negotiate with your lender before paying a lump sum. Similarly, most creditors are willing to lower your total debt balance if you can pay it off at once. Take the time to talk to your lender and get the best deal. Be sure to repay what you borrowed by making payments back into your savings account each month.

However, some debt problems are too serious to approach by the snowball or borrowing method. If you are at risk of missing a payment or can’t make ends meet, call a Sacramento bankruptcy lawyer. They can evaluate your situation and discuss your options. It is important to make an educated decision about how to relieve serious debt problems.

1. Failing to prepare before applying – When you make a large purchase you shop around for the best deal, right? So why not do the same when looking to borrow money from a lender? Not all lenders are the same and they can vary in important ways when it comes to the terms and conditions of your credit account. Credit card companies make money off of high interest rates, over-limit and late fees; and they know that any one of us is likely to slip up at any time. Before applying for a credit card or line of credit at a bank, compare their terms and details to find the best deal.
2. Poor credit usage – You have to borrow money to make your mark in the credit score world, but too many people don’t know how much to borrow or how quickly they should repay it. Having a balance that is too high and paying only minimums for years on end can actually do more harm than good to your credit score. A good rule of thumb is to keep your balance lower than 30% of the total available limit. For example, if you are approved for a $10,000 spending limit, keep your balance less than $3,000. Going over 30% can reduce your credit score and reflect poorly to other lenders. Paying down your balance and keeping an open, zero balance card will not only save you money, but boost your credit score. The idea to maintaining a healthy credit profile is to use some of your allowable line of credit, repay it fully, leave it open and empty a while, and repeat.
3. Not recognizing the danger zone – That slippery slope can creep up on the best of us and debt can get out of hand before we know it, especially in tough times like job loss or a medical emergency resulting in tons of unexpected financial obligations. The key is to keep an eye out on your debt and recognize when the problems begin. Are you using credit cards to pay for essential living expenses like groceries or utilities? Are you worried about not being able to meet all of your expenses and debt obligations? Are you at risk of, or have already missed, a payment? These are all signs of the debt danger zone. Speak to an experienced Sacramento bankruptcy attorney about your debt relief options. They can review all of your options and help guide you to make an educated decision.

Applying At The Wrong Time

Before considering new credit take a look at your current credit report. Check to make sure your score is in a good position for applying for new credit. If there are inaccuracies on your report take the time to dispute them and have them removed before applying for new credit. If your credit isn’t as good as you thought, put the application process on hold until you work your score up through paying down balances and making timely payments.

Applying For The Wrong Cards

You’ve probably received many pre-authorized credit line offers in the mail as they pass them out like candy it seems. However, those offers tend to come with some unfavorable lending terms like hidden high interest rates after an introductory period, annual fees, or variable rates that fluctuate with the nation’s prime. It is important to do your own research to find the card with the lowest interest rate, few to no fees and bonus features such as cash back.

Applying For Too Many Cards

When you apply for a credit card the lender will check your credit report to ensure your score is favorable and you aren’t a lending risk. Each time a lender checks your credit report, your score takes a small drop. If you apply for too many cards at once you will have several lenders checking your score at the same time, each chipping away at your score. Try a planned approach where you apply for one and receive an offer or rejection before moving onto another application. This will protect your score as much as possible for future credit checks.

Knowledge Is Power

Credit Counseling focuses on all your debt relief options. The course walks you through outlining your income, expenses and debt obligations to better determine your path to financial freedom. For some people, debt obligations may be better resolved through a negotiated lowered lump sum; whereas others might benefit from an interest-free period of payment installments, or even to flush all extra income towards one debt until paid in full. Making the right choice depends on your unique financial situation and a credit counseling session can help you make an educated decision.

Debtor’s Education is a course that is designed to walk you through life after a bankruptcy or debt settlement arrangement. The focus here is on repairing credit and regaining successful money management habits after your debts are resolved. This course focuses on taking the steps to avoid future financial disaster and even how to boost your financial profile through smart investment strategies.

If you are interested in participating in one of these beneficial courses, contact an Elk Grove bankruptcy lawyer to find out how to find a reputable course. With so many quick sale companies out to scam a dollar from an unsuspecting victim seeking debt relief, it is important you find a Credit Counseling company certified by the U.S. Trustees Department.

Under state and federal laws, creditors are restricted in their collections activities. The federal Fair Debt Collection Practices Act (FDCPA) makes it illegal for creditors to engage in threatening, offensive or intimidating behavior against any individual debtor from whom they are trying to collect on a bill owed.

Stop Creditor Harassment. Under Federal and State Law, it Is Illegal.

Under provisions of the FDCPA, creditors may not engage in activities such as:

• Using obscene and harassing language in phone calls or collections letters
• Calling your house before 8:00 a.m. or after 9:00 p.m.
• Accusing you of illegal activities or threatening you with arrest if you don’t pay
• Threatening to call your employer about your debt and credit issues
• Discussing your debt or collections actions with minor-age children in your household
• Threatening to repossess or foreclose on property not associated with the loan or debt

If you are facing creditor harassment, there are options you have for protecting your rights.

When you file Chapter 7 or Chapter 13 bankruptcy, all creditors’ collections actions against you are automatically stopped. From the day you retain us to represent you, creditors and bill collectors are required by federal law to direct all collections calls and contacts to my office. You will receive a card with our contact information. If you receive a call within a day or two after you file through our office, you can tell them to contact your attorney.

In addition to stopping creditor harassment, any legal actions creditors have started against you will have an automatic stay of execution put on them. That means that wage garnishment, foreclosure proceedings, liens and auto repossessions will be stopped, pending the outcome of your filing. This includes legal actions by vendors and creditors against business owners filing Chapter 11 bankruptcy to restructure their debt.

Is Bankruptcy Right for You?

Our law firm works with clients who are serious about using federal debt relief laws to eliminate debt that is preventing them from building a strong financial future. Just starting over from debt isn’t enough. we can also help you protect your financial future with a variety of estate planning instruments that will protect you and future generations from probate decisions and estate taxes upon your death.

Let us help you stop debt collection calls while we work toward helping you build a stronger financial future, debt free. With offices conveniently located in Rancho Cordova and Sacramento, we represent clients in communities throughout Sacramento County, El Dorado County and Placer County, California.