Law Offices of Jennifer LaRese, LLC
Call Today 203-583-8668

Larese Law Blog

Avoiding Chapter 7 through debt reduction

Financial literacy can be a challenging topic for many Americans, particularly as it pertains to credit card use. American society is built on credit, and the resulting debt load can weigh heavily on Connecticut residents. However, the key to lowering debt and avoiding the need for a Chapter 7 bankruptcy filing is to understand how credit cards work, and how best to mitigate the debt they generate. 

A research study conducted by a prominent financial website suggested that some 35 percent of Americans with outstanding balances on credit cards only pay the minimum amount as proscribed by their lender. Combined with the 8% who routinely made less than the minimum payment, this accounts for nearly half of all credit card users who are making the same error. A minimum payment simply is not enough to counter debt in most cases.

Club members hoping to avoid asset forfeiture

There are many private resort clubs in Connecticut. Depending on various factors, such clubs may enjoy high levels of profitably or may be financially struggling to stay afloat at any given time. Club members of a private ski resort in another New England state can relate to the latter, as they are currently hoping a quick sale of their resort will help them avoid asset forfeiture.

The club's lender will be allowed to continue a foreclosure on the property if funds are not generated through a sale of the resort. Members say they are hoping things go smoothly so the club can reopen by winter. A judge has ordered a trustee to be appointed to oversee the sales process.

Many fear credit score damage after Chapter 7

Many Connecticut residents who are struggling with significant debt likely have numerous worries that stem from that particular issue. They may worry about their daily needs, fear that creditors will call and have concerns that even if they do take steps to manage their debt, their credit scores will suffer permanent damage. All of these fears are valid, but fortunately, when it comes to credit scores, the effects of Chapter 7 bankruptcy can be mitigated.

Permanent damage to a person's credit score does not have to take place after completing bankruptcy. Certainly, the petitioner's score will likely lower as a result of the process, but a consumer can begin rebuilding his or her credit soon after completing the bankruptcy process. In fact, taking this route often gives individuals the motivation to manage their finances better in the future.

Seeking debt relief for credit card debt

Credit card debt is among the most difficult types of debt to erase, considering high interest rates and monthly payments. Connecticut residents understand the challenges associated with carrying debt, as the average household carries some $8,000 or more in credit cards alone. For those seeking debt relief, there are a variety of options, from consolidation to Chapter 7 bankruptcy. 

Consolidating credit card debt essentially means the act of taking out a single loan to replace multiple loans, consolidating all monthly payments into a single payment. In the best case scenario, this payment carries a lower interest rate than the individual credit cards. There are two major ways to consolidate debt in this way. 

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.