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Long Island Bankruptcy Law Blog

What should I do when my credit card debt is out of control?

It is so easy to charge purchases on your credit card. Sometimes, it is too easy. You see something you really need but do not have the money, so you charge it. You run to one of the many New York shops and see an outfit that you cannot live without but payday is not until next week, so you figure you can just charge it. This can quickly snowball from an occasional charge to reliance on using your cards until the balances become too much to handle. When your credit card debt gets out of control, you have to take steps to avoid a serious financial issue. recommends that you take steps to pay down your credit card debt first. This means that you should also stop using them. If you have more than one card, focus on paying one balance down at a time. You should continue making minimum payments on each card, but try to make a bigger payment on one card to help pay that balance down.

Forget these 4 bankruptcy myths

A lot of people are hesitant to file for bankruptcy simply because they have heard some of the common myths one too many times. Their concern is not based on the reality of the situation, but on some misleading piece of information repeated by friends, family members, media outlets and other sources.

It is critical that you learn how to sort the myths from the facts when considering bankruptcy. To help you get started, here are four myths to watch out for:

How do I recognize predatory lending?

Whether you are repairing your credit after a personal bankruptcy or trying to relieve yourself of crippling debt, predatory lenders may be setting their sights on you. Like other scammers, predatory lenders target the vulnerable and easily exploited – in this case, someone who needs a loan and has few options. You and other New York residents may protect yourselves by understanding how predatory lending companies work.

According to the New York State Attorney General, predatory lending involves the use of deceptive or unfair practices to lure unsuspecting consumers into substandard or abusive loans. Lenders like these usually go after those with poor credit or low income or who are minorities or elderly and easily exploited. Predatory lending companies may operate legally, or their actions can break consumer protection laws. When considering a loan, you should watch out for the following tactics that may be considered predatory red flags:

  • High-pressure sales tactics
  • Unsolicited mail, door-to-door sales or telemarketing
  • High interest rates, surprise fees and hidden term in the contract
  • Guaranteed approval of the loan regardless of credit history

What is chapter 13?

When you realize you have more debt than you can handle, you may consider filing for bankruptcy in New York to find financial relief. There are many different kinds of bankruptcy and depending on your particular situation, chapter 13 may be a good option. 

Filing for chapter 13 bankruptcy may be a good choice if you still have a steady stream of income. According to the United States Courts, chapter 13 allows you to develop a repayment plan. This plan generally provides you with three to five years to pay back your debt, and creditors usually cannot contact you until this time period has expired. If you think this type of bankruptcy might help your family, you generally need to give a petition to your local court system. The court may ask you to provide information about your living expenses and income, as well as supply a list of your assets and creditors. 

How can you avoid debt during the holidays?

New York residents like you may dread the winter months. Holidays fly at you one after another, from Thanksgiving all the way to Valentine's Day. Between food, gifts, and heating bills, people spend more during this time of year than any other time. So how can you save some cash when everything seems to want to empty your wallet?

The Financial Industry Regulatory Authority has poignant information on how to avoid falling into debt in the holidays, a problem that many Americans face every year. In fact, it was shown that the average consumer projected to spend over $1,000 on holiday shopping alone.

What is the bankruptcy means test?

New York residents like you who are having financial struggles may need help digging yourself back out. This is where filing for bankruptcy can come into play. Today we'll take a look at the bankruptcy means test and how it relates to your ability to file for Chapter 7 bankruptcy.

FindLaw goes into detail about the bankruptcy means test. It's considered an important tool for prospective filers of Chapter 7 bankruptcy. This test sets a standard by which applicants are measured to see if they qualify to file bankruptcy under Chapter 7. In other words, you do need to pass this test in order to even have the option of filing. This test was put into place to help make standards consistent across the board. It also combats the side-effects that came from lenient handling of bankruptcy cases in the early 2000s.

Benefits of bankruptcy reorganization

Hard economic times can fall on anyone, even those who are high wage earners. When debt begins to pile up and become unmanageable, even those who have significant yearly income may realize that they are in serious financial peril if they do not take immediate action.

A well-planned bankruptcy can offer much-needed relief to people with varying incomes and debt burdens. High wage earners often qualify for Chapter 13 bankruptcy, which creates a structured repayment plan and does not always require the debtor to forfeit property. A Chapter 13 reorganization focuses on helping those with reasonable expendable income regain control of their finances while halting collections efforts, reorganizing the debtor's assets to repay some or all of what they owe.

What can Chapter 11 bankruptcy do for you?

As a New York resident who is simultaneously suffering from financial struggles while also having a high net worth, you may be wondering what options are available to you. In certain cases, your net worth may be so high that traditional or common bankruptcy options aren't available to you. Macco & Stern, LLP, are here to introduce Chapter 11 bankruptcy and what it can do instead.

These days, people who have high net worth aren't always financially sound. Despite your net worth, you may be struggling with business loans or personal guarantees. You may have bought a dream home that you're still making payments on, despite the fact that it now has significantly less market value than it did when you first purchased it. There are endless reasons as to why you could be considered a "high earner" or someone with high net worth despite struggling with money.

Is bankruptcy the only method of relieving debt?

Many people living in New York are struggling with debt just like you. Macco & Stern, LLP, are here to help if you're beginning to ask yourself if bankruptcy is the only way you could possibly dig yourself out of the financial struggle you've become embedded in.

Fortunately for you, debt relief comes in all forms. Bankruptcy is one of the most well-known ones, but the downsides can be vast. You could have to liquidate valuable items like your car or even house, or you could end up damaging your credit score and making it difficult to finance big purchases in the future.

How to recognize debt settlement scams

As a New York resident who feels as if you are drowning in increasingly overwhelming debt, you may be searching for a solution that could help you begin to rebuild your financial life. Regrettably, however, some types of companies tend to pray on people who, like yourself, are struggling to get by, and they may use less-than-ethical tactics to do so. At Macco & Stern, LLP, we understand that many debt settlement companies are out to make a buck, rather than help you get back on your feet, and we have assisted many people facing similar circumstances find alternative solutions that fit their needs.

According to the Federal Trade Commission, most debt settlement companies are for-profit organizations, so you might be wise to second-guess anything their representatives tell you about helping you out. It is also important to recognize that, while a debt settlement agency may tell you they can get rid of your debts for pennies on the dollar, your creditors have absolutely no obligation to agree to a debt settlement agency’s terms.

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