Mistakes to Avoid When Dealing with Consumer Debt

Many residents of the Chicago area find themselves with medical debt, credit card debt, and other forms of consumer debt. According to a recent article from U.S. News & World Report, dealing with debt is a typical experience for most Americans. On average, according to NerdWallet.com, “the average American household has $15,310 in credit card debt and has $132,086 in overall debt.” While facing significant debt may be common, it does not necessarily make it any easier. For many debtors, personal bankruptcy can help to alleviate the stress associated with unmanageable debt.
Whether you are considering filing for consumer bankruptcy or taking steps to get out of debt through other means, the U.S. News & World Report article cites frequent mistakes made by debtors as they try to get their finances in order. What mistakes should you avoid as you work to get out of debt?
1. Do Not Assume that There is a “Quick Fix.”
There are many debt-relief programs being advertised on the internet, and companies may offer to help you get out of debt quickly and without any serious ramifications to your financial profile or your credit rating. While there are some legitimate credit counseling services and government programs that can help consumers to manage debt (and, hopefully, to pay it off eventually), many of these debt-relief companies scam debtors who are in need of financial help.
What should you do to avoid the mistake of getting wrapped up in a fraudulent debt-relief program? Simply do not assume that there is a “quick fix” to getting out of debt. Even for Chicago debtors filing for Chapter 7 bankruptcy, bankruptcy law is complicated and, although you may end up with a discharge of all of your debts, it is always important to work with an bankruptcy lawyer who has experience with cases like yours.
2. Do Not Avoid Reading the Fine Print in Debt-Consolidation Agreements
Whether you are considering working with a legitimate credit counseling operation that can help to consolidate your debt. For example, if you transfer balances to a single credit card to consolidate debt or take out a home equity loan, be certain that you understand the terms of your monthly payment and any associated fees. In some cases, the fees connected to debt consolidation can be quite hefty.
3. Do Not Assume Your Spending Habits Will Change Automatically
For certain debtors, the balances they owe resulted from unexpected expenses or medical issues. However, a lot of credit card debt has to do with the debtor’s spending patterns. If you do find a workable solution to getting out of debt, you need to take steps to ensure that your spending habits change so that you will not find yourself back in the same situation in a matter of months or years.
If you file for Chapter 7 bankruptcy and have your debts discharged, it is important to rebuild your credit and to avoid poor spending habits that could result in unmanageable debt.
Contact an Oak Park Bankruptcy Attorney
If you have questions about managing your debt, an experienced bankruptcy attorney in Oak Park can assist you. Contact the Emerson Law Firm today to discuss your options.
See Related Blog Posts:

Comments

Post a Comment

Popular posts from this blog

Phantom Debt Collection Scams on the Rise in Illinois

Have you been contacted by a person claiming to be a debt collector who is seeking to recover a debt you allegedly owe? If so, you are not alone. According to a recent report from CBS Chicago , such parties claiming to be debt collectors are on the rise, and they are scamming Chicago-area residents. These alleged debt collectors are part of schemes known as “phantom debt collection scams,” since they involve the attempt to collect on a debt that the consumer does not actually owe. How can you avoid becoming a victim in a debt-collection scam ? What should you do if you have been targeted by a fake debt collector? How Do Phantom Debt Collection Scams Work? Now, you might be thinking to yourself: I would never agree to make payment on a debt that I did not owe. But the scam is not always that simple. Parties at the center of debt-collection scams often target consumers who do actually owe debts (to someone or to some entity), and they prey on the fact that these c...
Read more

Payday Lending and Predatory Lenders in Illinois

If you are in substantial debt in the Chicago area and are living in a paycheck-to-paycheck cycle, you may have taken out a payday loan to make ends meet. While payday lending is illegal in a number of states due to the predatory nature of these loans, it remains legal in Illinois. As a result, many debtors in the state have used payday lenders, and far too many of those borrowers cannot repay what they owe. According to a recent article from Progress Illinois , consumers have filed complaints about payday lenders in the state, illuminating a need for federal rules that address harmful lending practices . Predatory Payday Lenders and Protections for Consumers Due to the perceived predatory nature of payday loans, twelve states in the country have banned these lenders from operating completely, according to a fact sheet from loans.org . The states that currently have laws prohibiting payday lenders from operating include Arkansas, Arizona, Connecticut, Georgia, Mary...
Read more

New Information on Debts That Bankruptcy Cannot Discharge

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti...
Read more