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Washington DC Bankruptcy Law Blog

Will you ever recover from bankruptcy?

Residents in Washington D.C. may be looking at bankruptcy as a potential option for financial relief. However, just as many may also take that option off of the table because its apparent permanence may seem too scary. After all, bankruptcy isn't something easy to recover from - or is it?

One thing to keep in mind is that bankruptcy is something you can recover from, regardless of what your situation is. A common rumor about bankruptcy is that people simply can't come back from it and will be in financial ruin for a long period of time, or even for the rest of their lives. This is simply not true. It does take work to recover from bankruptcy, but plenty of sites exist solely to get you back on your feet. Nerd Wallet, for example, hosts entire articles revolving around rebuilding credit and bouncing back after bankruptcy. There are even WikiHow articles for bankruptcy survival and recovery, including tips about bill paying and credit score monitoring.

What are risk factors for being a scam target?

There are plenty of services in Washington D.C. that are aimed at you, a person who's struggling with personal financial debt and looking for relief. Credit repair scams and debt relief scams are unfortunately on the rise along with rising debts, so the best thing you can do for yourself is keep an eye out on signs of these potential scams.

The first thing you should know is what makes a person a viable scamming target in the first place. As the Federal Trade Commission states, you're already a prime target if you have large credit debt, and the larger your debt is, the more likely you are to be targeted. This is a devious ploy that partially plays on the emotional instability and fears that you may have if you feel threatened by severe and looming debts. You are more likely to take help offered in a state like this, even if that help would normally set off alarm bells.

You do not have to stand for illegal collection practices

It is normal and well within their legal rights for a debt collector, collections agency or other similar Washington D.C. organization to attempt to collect on owed balances. However, these efforts sometimes cross over from what is appropriate and expected to borderline harassing and illegal. If you are experiencing what you think are illegal collection practices, you do not have to deal with it alone. 

If you are in an extreme amount of debt, it is normal to get phone calls, letters and other forms of contact from debt collectors. However, you do not have to put up with harassment, threats and other untoward behavior. Fortunately, you have legal options to make this type of behavior stop.

Can you dig yourself out of debt without bankruptcy?

As a Washington D.C. resident who's trying to avoid filing for bankruptcy, you may be looking into alternative debt relief. At Ammerman & Goldberg, we aim to provide you with information about all of your possible financial options before you make your final decision.

Restructuring mortgage payments is one of the best ways to alleviate your debt. Talk to your lender directly to discuss potential debt reorganization options. In some cases, you may find yourself being able to adjust your mortgage rate to a set of payments that falls more realistically within your price range. Reduced monthly payments or a longer period of time to stretch your payments across can both be lifesavers.

Will bankruptcy affect your ability to get a job?

As a resident of Washington D.C. who has recently filed for bankruptcy or is considering filing, you may have a number of questions regarding the long term effects of this financial move. For example, you may be wondering if having bankruptcy on your record will affect your ability to find employment in the future.

Monster.com states that while discriminating against people for filing bankruptcy is illegal, but that bad credit, which precedes bankruptcy, may be taken into consideration. Not only that, but some employers may find this to be a financial red flag and a sign that you do not manage money well. This can be even more of a problem if you're looking into fields that have to do with money, such as accounting or financing.

How can you protect yourself from mortgage fraud?

If you're shopping for a home in Washington D.C., you have a lot of things on your plate. Not only do you have to worry about finding a good area with a convenient location that falls within your price range, but you also have to deal with the possibility of mortgage fraud. Protecting yourself from the possibility of falling victim to mortage fraud can substantially lower your overall unease with the moving process, but just how can you do that?

The Federal Bureau of Investigation (FBI) is the organization that handles most mortage fraud cases, and the numbers have only risen over the years. They say that it's important for you to protect yourself from fraud before you become a victim. They include several tips such as never signing any document that has any blank lines, and researching into the neighborhoods you're looking at for yourself before you agree to a price that's being set.

What should you avoid when relieving your debt?

Washington D.C. residents like you may have acquired debt from a number of sources. School loans, mortgages, credit card bills and medical expenses all stack up over time, potentially making you desperate for debt relief. However, we at Ammerman & Goldberg wish to help you avoid certain pitfalls that may look like salvation but could actually worsen your debt.

The first thing to avoid are companies that promise they can net you lower minimum monthly payments. This option may sound enticing to you, but oftentimes these companies and their "too good to be true"offers are exactly that: too good to be true. Many creditors bank on the fact that they'll get back as much money as they can if they demand immediate payment. If you have not filed for bankruptcy, there is no automatic stay, so they can legally do this. Not to mention the fact that these companies often charge an arm and a leg to reduce those monthly payments, all but negating the supposed benefits.

How can you break debt traps?

Residents of Washington D.C. like yourself may feel trapped in a cycle of financial instability and debt. It is possible that certain things may be contributing to this cycle and adding to your debt without you even knowing it. These are known as debt traps, and if you don't know how to avoid them, you could be in for a rough time.

One such example of a debt trap, as stated by TwoCents, is skipping out on car insurance. Taking a higher deductible to pay less per month or avoiding insurance entirely might seem tempting. It may even seem like a relatively small risk compared to the amount of money spent on monthly premiums. The truth is, it's a huge gamble that could end up thrusting you directly into a debt cycle if one thing goes wrong with your car. These are the sorts of things you need to weigh and consider; what will cost you less in the long run.

Using 401(k) funds to pay off debt may not have desired results

Having substantial debt can affect anyone during his or her life. If you have accrued a debt amount that has made your life more difficult, you may wonder how you could potentially address the outstanding balances in hopes of bettering your financial situation. Though various ideas may come to mind, you may wish to remember that certain tactics could potentially make your situation worse rather than giving you the reprieve for which you had hoped.

For instance, you may consider dipping into your retirement account in order to use those funds to address your debt. However, this action may not have the desired results for a variety of reasons.

What is the Credit Repair Organization Act?

As a resident of Washington D.C. who is looking into the potential of credit repair, you have a lot of information to consider. What are the legitimate credit repair companies? What tactics will work best for your situation? Are there other options that might be better for you?

In the past, there were many shady practices that you had to keep your eyes peeled for. This is exactly why the Credit Repair Organization Act (CROA) was created. The Federal Trade Commission says that this was part of the larger Consumer Credit Protection Act of 1968, which was designed to help protect people like you from being taken advantage of by companies while trying to repair your credit and pay back your debts. It was added in 1996.

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