William H. Lively, Jr

Smith County Bankruptcy Blog

Many Americans do not realize they are in debt

In Texas and across the United States, 20% of Americans do not know whether they owe money on their credit cards, and 30% have no knowledge about their credit line interest rates. A current U.S. News & World Report survey also shows that 24% of Americans have debts equaling more than $10,000. Furthermore, 25% of the survey participants indicate they have revolving balances as high as $2,000 on their credit card accounts. In addition, 16% of the participants do not know how much money they owe on their credit cards.

The majority of participants say they confine their credit card debt to one card. On the other hand, 60% of Americans taking the survey say they pay their credit card statements by the due dates and do not have any credit card debt. Yet many Americans struggle with mounting financial problems. Many workers live from paycheck to paycheck and struggle to pay their bills.

Millennials struggle with delinquent credit card payments

In Texas and across the United States, millennials are experiencing difficulties with their credit card debts. Millennials frequently become tempted by credit card perks. Consequently, many millennials are delinquent in the payments on their credit cards. The delinquency ratio was not as severe in previous generations. Many young people formerly viewed stock trading with wary eyes in the past. These individuals were previously known for their frugality. However, current studies conducted by the Federal Reserve Bank of New York shows that many young consumers have lost control over their spending habits.

Signup bonuses appeal to younger generations who seek out the best cash back offers. Others want credit cards with no interest. A typical credit card charges an 18% interest rate for consumers with good credit. However, some credit cards carry higher interest rates. Although millennials might want to save money via bonuses, young people between the ages of 18 and 29 cannot afford to pay the high interest rates.

Medical debts may hurt credit scores

A study conducted by Consumer Reports magazine found that 30 percent of Americans have at least $500 in outstanding medical bills. People in Texas who are struggling to pay medical debts might see their credit scores negatively impacted. Medical debt is handled differently than other outstanding debts when it comes to a person's credit score. It is generally reported to credit agencies later than other debts because the healthcare provider does not do the reporting directly.

If the debt is unpaid long enough, the healthcare provider may send it to a collections agency to get it paid. The collections agency, after some efforts, will report the debt to a credit agency. Additionally, the major reporting agencies will not report medical debt to the credit bureaus until 180 days after it occurred. FICO 8, which is the most commonly used model for credit rating, does not consider medical debt balances of less than $100.

Rule would allow more creditor contact

A rule proposed recently by the Consumer Financial Protection Bureau would allow debt collectors to contact consumers in Texas a lot more frequently. Collectors could make phone calls up to seven times each week and they would be allowed to send unlimited emails and text messages. Once collectors speak to the consumer though, they would not be allowed to call again for one week. This rule change would represent the first major update to the CFPB rules in 40 years.

According to an attorney who works with the National Consumer Law Center, the rule would open the door to contact through existing channels that debt collectors have not utilized. She said people should know they have the right to tell collectors how to contact them and they can revoke their consent to be contacted.

Where can they repossess your car?

You have been missing car payments. Ever since you lost your job, you just cannot find a way to make those payments on time. You have to make paying rent and keeping food on the table a priority; you have kids, after all, and you need to care for them.

However, as much as you know that you're making the right decision, you feel worried that they're going to come and repossess your car. You have been out going to interviews, turning in applications, handing out resumes and trying to get another job in Gregg County. You can't do that without your car. It's a serious worry for you and your family.

Credit impact of bankruptcy lessens with time

Many Texas consumers face seemingly insurmountable debt.. They may have credit card bills with balances that got out of control, or they may have found an unexpected illness saddling them with medical bills. They struggle to pay their bills each month and face creditor calls, late fees and high interest rates. While personal bankruptcy could present a way forward out of this situation, many people are concerned about the effects of bankruptcy on a credit score. Of course, a bankruptcy filing is a serious negative entry on a credit report and will affect a person's ability to access new credit.

However, in most cases, people who file for bankruptcy already have a bad credit score. They may have late payments, closed accounts or judgments against them due to outstanding debts. In fact, many people wait for longer periods than may be optimal to file for bankruptcy over these concerns, further perpetuating the negative credit entries on their records. In some cases, people may find that their credit scores actually go up even shortly after bankruptcy as their significant debts are removed.

American consumer debt continues to rise

People in Texas and across the country owe an ever-increasing amount of debt. In February, consumer credit rose less than expected, but still grew by $15.2 billion. Outstanding debt had been predicted to rise by $17.5 billion in February, according to the Federal Reserve. This increase marks a 4.5 percent growth. Every month, the Fed tracks the amount of debt Americans owe. It grew by a smaller amount than it did in January, when outstanding credit obligations grew by 5.2 percent. However, it was larger than the December 2018 growth, which was a 4.2 percent increase.

These figures are subdivided into revolving and non-revolving debt. Revolving credit includes credit card debt and other types of consumer loans. It rose by $35.4 billion dollars in February, 4 billion more than the $31.4 billion increase in January. On the other hand, non-revolving debt, which includes items like student and auto loans, rose by $146.8 billion in February, less than the $181.2 billion growth in this sector in January. In total, Americans owed $4.05 trillion in consumer debt as of February 2019.

Out-of-network medical bills

Some hospital patients in Texas may find themselves unpleasantly surprised when they receive their medical bills. In some cases, certain treatments or services are not eligible for in-network insurance coverage. This can mean that some patients get hospital bills that they cannot afford to pay.

Health insurance plans in the United States typically provide a higher level of coverage for services provided by medical professionals, laboratories and hospitals that are "in-network," which means that they have entered into an agreement with the insurance company. Services provided by out-of-network hospitals, professionals and laboratories may still be covered by insurance, but the patient will be expected to pay a larger percentage of these costs out-of-pocket.

You can still get credit after filing for bankruptcy

Many people who are up to their necks in debt put off filing for bankruptcy because they worry that they will no longer be creditworthy after filing for debt relief. While your credit rating is sure to take a steep hit in a bankruptcy filing, if you are considering filing for bankruptcy, you are already in serious financial distress.

There are a lot of myths surrounding filing for Chapter 7 bankruptcy relief, and one is that you will not be able to obtain future credit. In actuality, you will likely be bombarded with offers of credit after your debt is discharged. True, the interest rates will be higher than those you might be used to, but the offers are real.

Getting help to pay off debt through an employer

Many Texas residents are dealing with debt. Many would likely say that their financial situation is one of their primary concerns. This debt may be related to credit cards, student loans, or medical bills. Because employers understand the considerable impact that debt has on their employees, some companies in the US have started to offer help to their employees. US companies are taking different approaches to help their employees deal with debt.

One approach is offering employees emergency loans or payday advances. This is a better option than having an employee take out a payday loan from a company that solely provides this service. Other companies offer interest-free loans that get repaid by automatically taking it out of the person's check.

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William H. Lively, Jr

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William H. Lively, Jr
432 S Bonner
Tyler, TX 75702

Phone: 903-920-0008
Phone: 903-593-3001
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