Archive for October, 2015

Fix Your Credit So You Can Buy a Home

Saturday, October 31st, 2015

Ok, so if you haven’t noticed, housing prices are rising again. Experts say that rental prices will continue to increase every year for losing homethe next 3 years. If your credit is a problem, you should consider getting started on fixing it so you can buy something before the prices get out of sight.

Credit card debt is the third largest source of household debt in the United States, behind home mortgages and student loan debt. According to recent credit card debt statistics from the Federal Reserve, total credit card debt in the United States for May, 2014 was $872.2 billion, with the average household having credit card debt of $7,221.

During good economic times, consumer spending on goods and services can lead to more jobs and higher incomes. However, when wages and employment rates are rising at a slow rate, increased consumer spending can be a sign that families are using credit cards to make ends meet.

Paying Off Credit Card Debt

For individuals whose credit card balances are causing financial problems and stress, experts recommend the following suggestions for trying to get credit card debt under control:

Know Where You Stand– The first step in getting control of credit card debt (as well as other debts) is to gather all monthly statements together and make a list of exactly what is owed. Often peoples’ lives are so busy that they go from month to month scrambling to pay bills, but they do not take the time to sit down and actually focus on how much is owed to whom and at what interest rate. Once a debt list is made, it is easier to develop a plan on how to attack the outstanding balances.

Target One Debt At A Time – For individuals who carry balances on more than one card, experts recommend two possible plans. The first involves determining which card charges the most interest and working to pay off the balance on that card first. Another possible option is to pay off the card with the smallest balance first until that card is paid off, then move to the next lowest balance card and repeat.

Pay More Than The Minimum – Every dollar paid over the minimum payment is applied toward the credit card balance. Because interest is charged on the balance every month, a reduction in the balance will result in less interest being charged.

Consider Consolidating Debt – Consolidating debt can allow an individual to combine several higher-rate interest credit card balances into one with the goal of moving the debt to a lower rate card. However, balance transfers typically involve balance transfer fees of 3 percent to 5 percent so it is important to determine whether the lower interest rate will offset the fees that will be charged for the transfer.

Consider A Home Equity Loan – If an individual has equity in his or her home, a home equity loan may be useful if the loan would have a lower rate than the credit card interest rate. Home equity interest payments also may be tax-deductible.

Avoid Dipping Into Retirement Savings Or 401(k) – Using savings and retirement funds, such as those in a 401(k), may be helpful under some circumstances, but it should not be done without serious consideration, especially for individuals who may be considering filing for bankruptcy as 401(k) assets and other retirement funds are generally protected from creditor access in Florida.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Bankruptcy and Child Support

Saturday, October 24th, 2015

You may be considering bankruptcy to give yourself a fresh start and wipe out all those existing debts. You may owe a lot of childchild support support and you may be wondering if you can wipe that out too. Probably not.

If you plan to file for Chapter 7 or Chapter 13 bankruptcy, it’s important to understand that you cannot get rid of child support obligations or child support  through bankruptcy. This rule extends to any type of domestic support obligation.

What is a Domestic Support Obligation?

A domestic support obligation is child support, alimony, or any other debt that is in the nature of child support, maintenance, or alimony.

A domestic support obligation is non dischargeable if it was established:

  • through a separation agreement, divorce, or property settlement agreement
  • by a court order authorized by law, or
  • by a child support enforcement agency (or other government agency) determination.

How Child Support is Treated in Chapter 7 Bankruptcy

In Chapter 7 bankruptcy, you are able to wipe out (discharge) most of your debts. In return, you must give up nonexempt property. The bankruptcy trustee sells this property and uses the proceeds to pay your creditors.

Not all debts are dischargeable, however. The bankruptcy code carves out some types of debts that you will continue to owe despite your Chapter 7 bankruptcy. Domestic support obligations are one of the types of debts that cannot be wiped out in bankruptcy.

How Child Support is Treated in Chapter 13 Bankruptcy

In Chapter 13 bankruptcy, you keep your property and repay your debts through a Chapter 13 repayment plan. Some debts must be paid in full. Others might be paid in part — the remainder will be discharged at the end of the repayment period.

Here’s how domestic support obligations are treated in Chapter 13 bankruptcy:

  • Domestic support obligations owed directly to a child or ex-spouse must be paid in full through your Chapter 13 repayment plan.
  • Domestic support obligations owed to a government child support collection agency do not have to paid in full during the life of your repayment plan. However, any amount remaining after your plan is finished is not discharged — you’ll still owe it. For example, if you owe $5,000 to a child support collection agency and you pay $2,500 through your plan, you will still owe the remaining $2,500 after you receive your Chapter 13 discharge.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.