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Tips for dealing with medical debt

It doesn't take much for a person to go into debt because of medical bills. Car accidents, illnesses or other injuries can all lead to hefty medical bills that can put a person in debt or further in debt in an instant. Today, we will provide some tips for you to deal with medical debt so you can begin to regain your financial freedom.

Never ignore the medical bills when they arrive in your mailbox or email inbox. Ignoring the bills will not make them disappear. The companies will not stop sending bills to you if you fail to pay them. Be sure to double check what came in the mail because sometimes it could simply be an explanation of benefits, which is not a bill that needs to be paid.

What rules apply to annual credit card percentage rate increases?

The United States Congress passed the Credit Card Accountability Responsibility and Disclosure Act in 2009. This act, also known as the Credit CARD Act, was meant to address abuses committed by credit card companies in their dealings with the public. As such, the act offers credit cardholders and credit card applicants various protections, including protection against abuses related to annual percentage rate (APR) increases.

Under the Credit CARD Act, credit card issuers are not permitted to increase the APRs of cardholders within a year of the opening date of a particular account except in the following situations:

  • The bank disclosed beforehand that the rate would be increased at a certain time when the customer opened the account.
  • The APR increase happened as a result of indexes that the issuer cannot control.
  • The consumer did not follow the workout arrangement provided by the card issuer. Such arrangements could be provided to a customer who is having a difficult time making payments.
  • The holder of the card has failed to submit the minimum payment for a two-month period.

3 warnings about bankruptcy

The bankruptcy process is a financial lifeline that has saved countless Americans from falling into financial ruin. However, it's important for those who wish to benefit from this process to understand what they're getting into before they begin.

Here are three warnings that every bankruptcy filer should consider before they begin:

Should I freeze my credit cards in a block of ice?

If you're reading this blog -- and considering the unthinkable thought of freezing your credit cards in a block of ice -- then you're probably struggling with some debt problems. In fact, many people try and fail to curb the impulse to use their credit cards at the drop of the hat, but the odd strategy of putting your credit cards in a block of ice just might work.

The idea behind this strategy is the fact that -- if our credit cards are readily available -- we might buy something on a whim and have little self-control over the decision. However, when the credit cards are trapped in a block of ice, a delay will be required to get to them. In fact, it usually takes long enough that by the time the cards have melted, you probably won't want to buy the item in the first place.

What property is not exempt in a Chapter 7 bankruptcy?

One of the most important responsibilities of a bankruptcy attorney during Chapter 7 proceedings is to ensure that his or her clients get as much of their personal property exempt from liquidation as possible. The process of getting certain property exempt may require some strategic legal action, but sometimes, bankruptcy filers are surprised at just how much of their property actually qualifies for exemption.

That said, there is certain property that will never be exempt. This no-exempt property usually includes:

3 reasons you should file for bankruptcy

There are several reasons why you might want to file for Chapter 7 bankruptcy immediately. The problem is, many people in these situations still continue to wait a very long time before reaching out to a bankruptcy lawyer. This kind of a delay will only make your debt situation worse. If you're currently experiencing one of the following debt scenarios, Chapter 7 bankruptcy could be right for you.

You're putting low-cost necessities on your card: If you're having to buy things like toothpaste, gas, food and toilet paper on your credit card, this is a very bad sign. It means that you don't have enough income to support your credit card payments in addition to your daily needs. You may want to pursue bankruptcy fast.

What Chapter 13 bankruptcy exemptions can I receive?

Asking about bankruptcy exemptions in Chapter 13 proceeding is not the norm, but it indicates a more detailed understanding of the law. In fact, most people associate "exemptions" with Chapter 7 bankruptcy because this process requires you to forfeit certain property over to the bankruptcy estate for liquidation purposes. With Chapter 13, you never need to forfeit your property because Chapter 13 proceedings involve you making three to five years of regular monthly payments, which are a part of your debt reorganization plan. Once you complete these payments, all debt covered by the process will be dissolved.

That said, the same exemptions that apply to Chapter 7 proceedings will still apply to your Chapter 13 proceedings. Ultimately, if you own nonexempt property, the bankruptcy court will want to evaluate the total value of that property because the value of that property will represent the minimum amount you must pay over time as a part of your debt repayment plan. Because of this fact, you will still want as much of your property as possible to qualify as exempt.

Why do people prolong filing for bankruptcy?

You could suffer under a mountain of debt for a decade, two decades or an entire lifetime -- barely scraping by to make your financial ends meet. Or, you could file for Chapter 7 or Chapter 13 bankruptcy and get your debt problems in order relatively quickly. If you qualify for one of these helpful bankruptcy processes, there's literally no reason to prolong yours any longer. You may have everything to gain by filing for bankruptcy right now.

Nevertheless, if you're like most Americans who are suffering from debt problems, you will probably delay filing for bankruptcy until the last possible moment. Here are two reasons why people tend to wait longer than they should to file for bankruptcy:

Will consumer debt reach 4 trillion before 2019?

If you are currently dealing with high levels of credit-card debt, you are certainly not alone. Consumer debt levels in the United States have been growing steadily since 2012 and, before we reach 2019, those debt levels are expected to reach new heights.

Some analysts estimate that individuals in America spend approximately 10 percent of their monthly incomes paying debts related to automotive loans, student loans, credit cards and home mortgages.

Paying off debt with the snowball method

Imagine a little snowball that you pack tight with your hands. Now imagine putting that snowball on more snow on the ground and gently rolling it around until it gets bigger, and bigger and bigger. Now, push the giant snowball down a hill and watch it continue to pick up more snow until it's a gigantic force to be reckoned with. This is kind of how the snowball debt payoff method works.

First, you select the debts that have the highest interest rates and start to slowly pay them off first with whatever money you have available. Once you pay off that high interest rate debts, you can use the money you were applying to that debt and apply it to your debt with the next highest interest rate. When that debt is paid off, you pay the debts with the next highest interest rate.

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Law Office of Ruth Nelson
7742 14th Avenue NW
Seattle, WA 98117
Phone: 206-633-2517
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