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October 2014 Archives

How soon is debt discharged under Chapter 7?

Because Chapter 7 is a liquidation approach to bankruptcy that allows many unsecured debts to be wiped out, the discharge is a significant step in the process. An individual debtor residing in Washington, D.C., who has filed a petition under Chapter 7 may view the discharge as the point at which relief is obtained from the stress of their financial troubles, but some relief will come much earlier as a stay on collection activities is issued at the time the petition is submitted.

Foreclosure rescue scams and how to avoid them

It may be important for homeowners in Washington, D.C. to be aware of foreclosure rescue scams. Any claim that is made about stopping foreclosure for a fee should be subjected to scrutiny by a homeowner. Homeowners should also never make mortgage payments to a party that is not their mortgage servicer or sign the ownership of their home over to a third party.

What are the credit counseling requirements in bankruptcy?

Federal law requires people who are filing for personal bankruptcy, including those in the District of Columbia, to complete credit counseling and file a certificate of completion beforehand. Only an approved organization listed in the U.S. Trustee Program can issue a certificate of completion, which is numbered and created via a central automated system for fraud protection purposes.

How are debts treated in a Chapter 13 plan?

Chapter 13 debtors in Washington, D.C., are required to submit a repayment plan within 14 days after the bankruptcy petition is filed, unless the court extends the deadline. The plan must outline the terms and amounts of payments to be made to the trustee on a regular basis, typically monthly or biweekly.

Residents in Washington, D.C. struggle with debt

Household debt in collections in Washington, D.C., was more than 40 percent as of June 2014, which is one of the highest rates in the nation, according to the Urban Institute. This debt, mostly from mortgages, credit cards, car and student loans, coupled with one of the highest unemployment rates in the country, has residents in the capital struggling to decide whether to consolidate debt or file for bankruptcy. Deciding the best option for debt recovery requires that individuals calculate the benefits versus the cost of both choices.

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