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Posts tagged "filing for bankruptcy"

Easing credit restrictions may help Kentucky borrowers

According to a Federal Reserve Bank of New York survey released in February 2015, borrowers with credit scores under 680 had a roughly 50 percent chance of increasing their credit card limits. This represents an increase from October 2014, where a similar survey showed that borrowers with subprime credit scores had a success rate of roughly 33 percent. While this may be good news for borrowers with checkered credit pasts, it has consumer advocates concerned.

Credit card debt climbs

Though defaults on credit card payments reached a six-year low last year, Kentucky and the rest of the United States added a record-breaking $57.1 billion in net credit card debt. These and other findings related to American consumer debt are based on the results of a recently released CardHub survey.

Bankruptcy filing for debtors with tax debts

Kentucky individuals who are struggling with debt and considering filing for bankruptcy may not know that past due tax obligations are not always eligible for discharge. A Chapter 13 bankruptcy establishes an arrangement for the debtor to repay all obligations over a period of three to five years in accordance with an approved plan, but Chapter 7 allows the discharge of certain types of debt, including federal tax debt if it meets strict requirements.

Cancelled debt may return as a tax bill

Anyone in Kentucky who has their credit card debt forgiven in whole or in part can expect to receive a 1099-C form from the issuer or collection agency. When this form is sent out, it is also sent to the Internal Revenue Service. In many cases, the amount of cancelled debt becomes taxable income for the card holder and could potentially result in a very large tax obligation.

Options for settling credit card debt

Many debt settlement companies offer assistance to Kentucky residents with paying off their credit card debt. One major drawback of these services can be the fees that these companies charge. Federal law requires these companies to disclose all of their prices and policies to the consumer up front and any consequences that the consumer could suffer as a result of their actions.

Restrictions on debt collectors under federal law

The Fair Debt Collection Practices Act places restrictions on what debt collectors may do when attempting to collect an overdue credit card debt from a Kentucky resident. For example, a debt collector may not call before 8 a.m. or after 9 p.m. without permission to do so. They are also prohibited from calling a debtor at work unless given permission to do so.

Distinctions between Chapter 7 and Chapter 13 bankruptcy

Kentucky residents struggling with financial challenges and seeking debt relief may be interested to know about how personal bankruptcy might work to help them manage or eliminate debt. The two most common types of individual bankruptcy are Chapter 7 and Chapter 13, which differ from each other in certain key aspects.

Medical debt gets revamped by FICO

Debtors in Kentucky may benefit from recent changes made to how medical debts will effect consumers' credit scores in the future. During August 2014, Fair Isaac Corp., better known as FICO, announced its plans to mitigate the impact medical debt has been having on its credit score algorithm. The changes are expected to raise credit scores by 25 points for those consumers whose ratings have been adversely impacted by outstanding medical expenses.

Getting credit again after bankruptcy

Kentucky residents who are struggling with debt often wonder how filing for bankruptcy will affect their credit and use of credit cards in the future. The fact is that it is possible to get credit again after filing bankruptcy, but the terms will be drastically different from what people with excellent credit enjoy. However, investing in the right credit cards can help consumers rebuild a positive credit history and eventually restore their good credit rating.

Learning the basics of bankruptcy in Kentucky

In 1934, the Supreme Court stated in one of its opinions that bankruptcy represents an opportunity for the honest but unfortunate debtor to get a fresh start without being discouraged by previous debt. There are several different chapters in the Bankruptcy Code that allow individuals, married couples and businesses to get the fresh financial start that they need.

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