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Larese Law Blog

Are you looking for mortgage loan debt relief?

Financial struggles happen to many people across the country, including here in Connecticut. When your situation makes it difficult to meet your mortgage loan obligations, you probably become fearful that you could lose your home. If that happens, you may be able to take advantage of several mortgage loan debt relief options.

Once your lender files for foreclosure, you will need to work with the court to come to a resolution. You could participate in mediation ordered by the court, which appoints a mediator to work with you and your lender. You will participate in meetings that involve the lender and just involve you and the mediator. The lender then decides whether to provide you with a new repayment plan, lower your interest rate or make some other arrangements that would allow you to keep your home and make your payments.

Some millennials in need of debt relief due to credit card debt

Millennials in Connecticut and elsewhere around the country have come of age in a financially turbulent time. They have seen major economic downturns and soaring levels of national debt. Many of this demographic group are bewildered about their own personal debt, whether it be student loans, mortgages or credit card balances. In fact, recent studies show that more millennials are in need of debt relief as a result of their handling of credit card debt.

A decade ago, just over 40% of millennials had a credit card; now, that number has increased to 52%. In addition, roughly 8% of them are seriously behind in making their payments. Since this age group also has a significant level of student loan debt, the added burden of credit card payments, interest and fees certainly does not ease their financial pressure. At the same time, some millennials are advised to take out a mortgage, because investing in a home is a good fiscal move. Securing all this debt can quickly become a problem if not managed properly.

Finding debt relief may not be as easy as debt settlement claims

Struggling with debt issues is not an unknown concept to many Connecticut residents. Unfortunately, any number of events could lead to a person facing insurmountable bills and accrued debt that leaves them feeling lost. Luckily, finding debt relief is not impossible, but it is important not to be taken in by options that may not help.

In particular, debt settlement is often considered a viable relief option, but it is not as helpful as some may believe. In fact, creditors do not even have to work with settlement companies. As a result, a settlement company may claim that it could help consumers, but if creditors do not want to negotiate, the company can do little, if anything, to actually help. If the company charged upfront fees, consumers may even be worse off than they were before seeking this type of help.

Avoiding Chapter 7 bankruptcy through alternate debt reduction

Many Americans carry credit card debt, which can be one of the most difficult forms of debt to pay down. For some Connecticut residents, options like a personal loan can help to pay down high balances. For others who are in more serious financial straits, a Chapter 7 bankruptcy filing might be a more appropriate way of handling mounting debt. 

Personal loans are often used as tools for "debt-busting" thanks to their comparatively low interest rates. A good personal loan can have an interest rate starting as low as 5% for those with good credit, as compared to the average APR of 18% for most credit cards. This lower rate allows a loan to be paid down faster than credit debt, which tends to gather more interest more quickly. 

Debt relief: Which cities have the highest credit card balances?

Topping a national list typically brings celebration to a city. Metro areas are proud to proclaim the news when they have been recognized as a best place to live or an area where the best schools are located. However, being number one on some lists may bring cause for concern. Connecticut has two cities in the listing of areas with the highest credit card debt. This level of debt may leave some consumers searching for debt relief.

In a recent survey by an online lending company, Bridgeport residents were found to have the highest level of credit card debt in the nation. The report showed that almost 23% of those who lived in that metro area carried over $10,000 in credit card balances. In fact, almost 2% of Bridgeport consumers had balances over $50,000.

Can unpaid income taxes be discharged in a Chapter 7 bankruptcy?

After experiencing continued financial struggles, some Connecticut residents and others around the nation make the decision to file for bankruptcy to get a fresh start. One option when filing for bankruptcy is Chapter 7. This type of filing is also commonly know as liquidation bankruptcy, since certain assets are sold and the proceeds are used to pay one's creditors. There are very specific guidelines regarding which debts can be discharged. Yet, how should unpaid income taxes be handled in this type of bankruptcy filing?

A person had not filed income tax returns for three years and was hoping to avoid paying those taxes since Chapter 7 protection was being sought. In general, when certain debts are discharged, the consumer does not have to pay the creditor back after the bankruptcy is complete. However, individuals must pay back those debts that are deemed as non-dischargeable. Within specific time frames, taxes are normally not discharged. Yet, if several rules are met, some income tax debt can be discharged.

Debt relief: Personal loan may help some ease credit card debt

Being saddled with a mountain of credit card debt is quite common for many Connecticut residents and others across the country. Consumers frequently get bombarded with advice on how to reduce or eliminate this type of debt because it can become quite expensive if not paid in a timely manner. One suggestion to provide debt relief from growing credit card balances is to consider taking out a personal loan.

One of the most attractive features of a personal loan is the lower interest rate when compared to the rates for credit cards. Some credit cards have an annual percentage rage of 18% or more. When there are large balances on the cards, the interest payments can grow very quickly. On the other hand, personal loans may be obtained with interest rates as low as 5%, depending on a person's credit score.

Debt relief: More consumers using credit cards for necessities

Many Connecticut residents and others across the country use their credit cards primarily for large purchases so that they can take advantage of mileage or other reward programs. They are able to pay the bills in full and not incur interest or increasing balances each month. However, there is an increasing number of people who are forced to use their credit cards for basic monthly needs. These consumers are likely struggling to make ends meet and are in need of debt relief.

A national credit reporting agency recently stated that the average household credit card debt is just over $6,500. According to the survey they conducted, almost a quarter of consumers in the country now have to use their cards to cover such basic expenses as rent, utilities and food. Roughly 12% reported that they have to use their cards to cover their medical bills.

Debt relief: Debt consolidation loan may be right choice for many

According to recent financial indicators, the economy is improving in several areas for residents of Connecticut and elsewhere around the country. However, what about those individuals who are not seeing any progress in their finances and are, in fact, in need of debt relief to ease their struggles? For many, a debt consolidation loan is a way to minimize the number of payments required each month as well as possibly paying a lower amount of interest overall.

To determine if a consolidation is the right choice, consumers would first need to check their credit scores. While a lower score does not preclude someone from obtaining a personal loan, a higher FICO number would likely yield a lower interest rate. If a person's score is lower, he or she should first make sure the credit report is correct and take action to amend it, if necessary. Of course, any late payments should be made as soon as possible. Paying off any of the debts can also improve a person's debt-to-income ratio and increase a credit score as well.

Debt relief: Proposal to cap credit card interest rate at 15%

Many Connecticut residents and others around the country carry a significant amount of credit card debt from month to month. If those consumers were told the interest rate for their credit cards was to be capped at 15%, it would apparently be good news for them at first glance. Since some of the cardholders with large balances are often in need of debt relief, this seems like a positive move for them. However, that plan could end up causing more financial strain on the very people it seemingly would help.

Some of the early contenders in the 2020 presidential race have discussed a plan to cap credit card interest rates at 15%, lower than the current total average of 17.73%. While this measure is not expected to pass immediately, some candidates are wanting to introduce their policies in this manner. The current average credit card debt per household is over $9,300. Those consumers who may take years to pay that balance off could benefit from a lower interest rate. The lower rate could considerably reduce the amount of interest paid over time.