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Law Office of James Keenan

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Sacramento Bankruptcy & Debt Relief Attorney

Get news, tips and information about bankruptcy filing and debt relief/elimination in Sacramento

Get Out of Debt

Debt can be crippling. Many in Sacramento are living with debt. And the situation is worsening. But how do you get out of debt? This recent news story offers tips to relieve your debt dilemma. But the options offered presume you have the money to, at minimum, pay down your debt. What do you do when you don't have the income to do that? Bankruptcy O...

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Credit Card Relief

If you owe more than $8,000 in credit card debt, you are not alone. According to this news report, the average American household owes more than $8,000 in credit card debt. The level of credit card debt is soon to exceed the credit card debt levels prior to the Great Recession. That's a lot. There are certainly benefits to credit cards. Covering un...

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Rising Credit Card Debt

 Rising credit card debt is a byproduct of the improved economy. According to a CBS News report, credit card debt has surpassed a trillion dollars nationwide. That's a lot. The more the economy grows, the more credit that becomes available. And with it, debt. Credit is beneficial in generating a stronger economy. It allows business expansion, ...

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Bankruptcy Debt Elimination

Bankruptcy Debt Elimination

Get out of debt.  Now!  A recent CNBC news story cited credit card interest and fees topped a hundred billion dollars this past year.  That's a lot.  And this number is growing.  Bankruptcy debt elimination can be a way out.

Bankruptcy debt elimination is the end-result of a bankruptcy filing.  The bankruptcy term is discharge.  A discharge is a court order eliminating your debt.  Attempting to collect on a discharged debt is against the law.  Creditors can no longer collect following a bankruptcy filing and discharge.  It is the purpose of filing bankruptcy, whether here in Sacramento or elsewhere.

Consumers often file for bankruptcy seeking relief from their creditors.  Bankruptcy does this.  As soon as a bankruptcy is filed, an automatic stay goes into effect immediately.  This means that creditors are stayed, or legally blocked, from attempting to collect upon the debt. Bankruptcy debt elimination results when the bankruptcy case completes.

Debt is expensive.  Too expensive.  When the cost of debt exceeds consumer budgets, bankruptcy is a way out.  Paying back debt is always an option.  But only for those who can afford to do so.  Most who file for bankruptcy can't.  It is why they file for bankruptcy.  The cost of debt is increasing.  The average interest rate on credit card debt is around 17%.  Debt can quickly snowball with such costs.  Bankruptcy debt elimination may be the only option at some point.  But it is a good one.

People are often reluctant to file bankruptcy.  If they can afford their debt, they should be.  For those, though, who can't financially mange their debt, bankruptcy is a solution.  Though bankruptcy is a negative on credit, bankruptcy debt elimination is a positive.  The question, then, is when does the elimination of debt through bankruptcy offset the negative of filing bankruptcy?  The answer is different for everyone.  Contact me for a free consultation to find where you stand financially.  You may be better off!

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Too Much Credit Card Debt?

Too Much Credit Card Debt?

Do you have too much credit card debt?  If so, you are not alone.  Credit card debt recently surpassed one trillion dollars for US consumers.  That's a lot!  An ABC news story depicts the deepening American debt load.  What, then, to do?

The simple solution is to pay credit card debt off.  Budget solutions suggest paying down higher interest rate creditors first.  That's well and good.  If you can afford it.  But if you have too much  debt you may not be able to afford it.  That's why you may be in debt in the first place.

Borrowing more money to pay off too much credit card debt is another way out.  But it really isn't a way out.  It is a just digging deeper into debt.  Whether you borrow against your home or take out new loans to pay off older ones, you may be only worsening the problem.

More income is another silver bullet for too much credit card debt.  But that, too, is a limited option.  Most Americans are on a fixed income.  Static income in not just for seniors.  Anyone earning a salary knows that.  Most people earn what the earn.  Raises are not enough for those living with too much credit card debt.

Bankruptcy may be the best option for those trying to manage too much credit card debt.  Bankruptcy may eliminate your debt while allowing you to protect your assets, including your home.  It may actually improve your credit  since, after all, elimination of debt is a big benefit on your credit.

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Debt or Discharge?

Debt or Discharge?

Debt or discharge, that is the question. But what does it mean?  Simply put, its a decision.  It's a decision whether to live with debt or without it.  Discharge is the end result of a bankruptcy.  When you file bankruptcy, here in Sacramento or elsewhere, you  have debt.  Likely a lot of it.  Enough debt to prompt you to file for bankruptcy.  But, again, why?

Bankruptcy is a legal process that can eliminate your debt.  The end result of a bankruptcy filing is a discharge. Here is an explanation of it from the Sacramento bankruptcy court. A discharge is a legal order from the bankruptcy court.  It orders your debts no more.  Hence the title of this blog being debt or discharge.

Before you get the discharge, you must complete the bankruptcy filing process.  It's not too difficult to do with legal guidance.  But it must be done right.  Otherwise, no discharge.  Then your debt or discharge question is answered for you.  Some of the basic components of a bankruptcy filing are listing your creditors and assets.  You have to put down everyone you owe money.  Even if is Aunt Edna or Uncle Charlie.  Everyone must go onto the list, or schedules in bankruptcy.  Including your assets is an obvious one.  Bankruptcy law allows you to protect, or exempt, your property.  But you have to list it.  

When the bankruptcy filing process is done, the judge orders orders a discharge.  Poof, no more debt or discharge dilemma.  Maybe this is an oversimplification.  But maybe it's not.  The point is you have a choice choice.  There are several facts that lead to debt.  And there are several factors that can lead to a discharge.  Each debtor is different.  But all have options.

Contact my office for a free consultation to evaluate your options.  

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Credit Card Debt Elimination In Bankruptcy

Credit Card Debt Elimination In Bankruptcy

Credit card debt elimination in bankruptcy is one of the most common causes of bankruptcy filing. Consumer debt has increased dramatically in the past few years. The level of credit card debt is now near it‘s pre-recession level. And that’s a lot. This Consumer Reports article describes the recent rise in credit card debt. The article also describes the perils of excess credit card debt. In depicting the problem of too much credit card debt, the article points out what can be done to diminish the hard harm of the excess debt.

Eliminating credit card debt is the ideal solution to excess credit card debt. But that is easier said than done. Trimming expenses, paying your debt down faster and tapping your savings are all options to decrease your debt. These are great ideas. But not if they won’t work for you. Maybe your expenses are already shaved to the bone. Perhaps you can’t pay your debt off any faster. And what if you have no savings? If so, credit card debt elimination in bankruptcy may be your best bet.

Credit card debt elimination in bankruptcy may be your only option if your debt is beyond your ability to repay. And those in that position are not alone. Tips to improve your credit position are meaningless if you can’t employ them. And paying more on your debt often falls on deaf ears of those in debt. The reason people are in debt is often because they can’t repay it. If they could, they would.

The Consumer Reports article is right. Too much credit card debt is bad. But if you can’t repay it, credit card debt elimination in bankruptcy is your only option. And a good option it is. Though filing bankruptcy is a negative on your credit, eliminating your credit card debt you can’t repay is a positive. Weighing these options is the key to evaluating whether filing bankruptcy is the right financial option.

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Bankruptcy and Credit Card Debt

Bankruptcy and Credit Card Debt

Eliminate credit card debt through bankruptcy or pay it off? That is the question. For many consumers, though, it is a loaded question. They would like to pay off their credit card debt, but they can’t. And they know it. What, then, to do? Eliminating (or discharging it in bankruptcy parlance) is the only viable option for many.

Credit counseling often provides tips to reduce your credit card debt. Tactics such as paying off high interest credit card debt first is a prudent policy. Eliminating non-necessary expenditures and creating a budget are others. But the bottom line is it takes money to pay off your debt. If you don’t have it, you can’t do it.

Paying only minimum payments will get you nowhere. It’s only financial benefit is to the credit card industry. Using this credit card debt calculator confirms for many that there is no way to pay off their credit card debt. Ever.

Bankruptcy viablity takes into consideration a calculation, too. As addressed in other areas of this website, there is a cost-benefit analysis in determining whether a bankruptcy is worthwhile. Is it better for your financial well-being to have the amount of debt you have and no bankruptcy? Or would it be better to file bankruptcy and eliminate your debt? That is the real question to consider.

Obviously, too, your income, housing costs and other living expenses are part of this financial evaluation. These issues dictate whether you can repay your debts. If you can’t, bankruptcy may be your only option.

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Sacramento Bankruptcy: Credit Card Debt

Sacramento Bankruptcy: Credit Card Debt

Credit card debt is one of the most common forms of debt for bankruptcy filings in the Sacramento region.

There are a number of reasons credit card debt can cause bankruptcy. The ease of ability to obtain credit card debt is first factor to consider. Often consumers are bombarded with credit card applications, cash advances and debt consolidation offers. Rarely are these offers solicited.

Once the credit card companies obtain your business, they continue to encourage further credit use and, in so doing, foster further debt. If the debt with one credit card debt becomes beyond the ability to repay, at least realistically, other credit card companies are alway there to “rescue” you financially with more debt. Low introductory interest rates, promotions and teasers to draw you in are part and parcel of credit card marketing strategies. This strategy is particularly so amongst younger americans as this study suggests. When the low interest rates and payments expire, consumers are often left with only more debt. Soon robbing Peter to pay Paul can become a lifestyle.

Credit card companies have an obvious interest in extending credit: profit. Loaning money is one of the most profitable businesses in America. Only relatively recently have credit card companies been required to show how long it would take to repay your debt if you made only the minimum payment each month. Those figures will show the obvious profit built into their payments.

As credit card companies pad their profits, consumer debt grows. Debt can begin to beget more debt. It’s a tough cycle to break once you are in it.

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Sacramento Bankruptcy: Credit Card Debt Cost

Sacramento Bankruptcy: Credit Card Debt Cost

Credit card debt interest cost for the average consumer in 2015 exceeded $2,600 according to a recent survey. Eliminating credit card and other consumer debt was the crux of the survey’s conclusion for consumers to regain financial stability. Money spent on credit card interest and other charges buys nothing and results in no return.

Much credit card and consumer debt is driven by the rising cost of living for most americans. While there are other options to deal with your debt, including loan consolidation and borrowing against your home equity, such alternatives do not eliminate your debt; they only lessen or elongate the loan costs.

Bankruptcy discharges your debt. It is eliminated. Often with individuals facing growing consumer and credit card debt, that debt does not diminish. With rising credit costs comes the need to obtain more credit which then creates more costs. Robbing Peter to pay Paul suddenly can become a lifestyle. If further borrowing no longer is an option, at least not one that can be tolerated any longer, bankruptcy may your best solution.

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Bankruptcy and credit card debt

Bankruptcy and credit card debt

Credit card debt is one of the most common types of debt discharged in bankruptcy. It is normally unsecured debt, meaning the debt does not need to repaid after filing for bankruptcy.

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Sacramento bankruptcy filings: Credit card debt

Sacramento bankruptcy filings: Credit card debt

For those filing bankruptcy in Sacramento, credit card debt is commonly one of the biggest forms of debt eliminated through a bankruptcy discharge. If you have credit card debt you are considering eliminating through a bankruptcy, you are not alone!

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Sacramento bankruptcy: is written-off credit card debt still collectable?

Sacramento bankruptcy: is written-off credit card debt still collectable?

Yes. Credit card debt written off by the bank does not mean the debt is done. Credit card debt that is written off is a way the credit card company can remove the debt they are owed as an asset from their books. It doesn’t mean you no longer owe that debt. You do.

Typically debt that credit card companies write off is then sold to collection companies at a fraction of the dollar amount owed. That collection company can then collect that debt from you. Collection companies are often more aggressive in their efforts to collect the debt than the originating credit card company you initially owed the debt. They are not lenders, they are collectors.

Even if you avoid collection efforts from collection companies, the credit card company that wrote off the debt can still do you damage. As discussed in earlier posts, the debt credit card companies write off can be considered forgiven. Though forgiven debt can still be collected upon by another company or collector, the credit card company can send you a 1099 for the forgiven debt they wrote off. This means you must pay taxes on the amount of that forgiven debt.

Bankruptcy is a cleaner fix. Debt that is discharged in a bankruptcy is eliminated forever. No one else can collect on that debt and the amount discharged is not considered income for tax purposes.

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