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Michael D. Hart, P.C.
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Roanoke Virginia Bankruptcy Law Blog

FTC reveals entire industry behind robocalls

A recent crackdown by the Federal Trade Commission revealed that robocall operations out of Virginia and other states were tied to large illegal organizations. This most recent action by the FTC targeted groups that tried to sell fake products, multilevel marketing schemes or real products marketed using illegal tactics. The crackdown provides the clearest picture yet of the people and structures behind these illegal activities.

A common way for robocalls to proliferate is through a multilevel marketing scheme. Founders of these schemes push packages on to their members, and they promise that these packages will lead to large amounts of revenue with practically no effort. Members of a franchising scheme reportedly made thousands of dollars per week while one of the founders claimed to earn more than $6 million. It's unclear how much money was made in one particular scheme. The defendant's attorneys declined to comment.

Tips for dealing with a debt collection lawsuit

Some people in Virginia who have unpaid debt might eventually face one or more lawsuits. This can be stressful, and individuals who have no money may be tempted to ignore them. However, there are steps people can take to defend themselves against these lawsuits and possibly get them dismissed. Furthermore, failing to respond can lead to a judgment by default, resulting in such actions as wages being garnished. In responding to the lawsuit, people should not admit that they are liable for the debt.

Plaintiffs may be required to provide a number of documents backing their claims about the debt. This includes a credit agreement signed by the debtor, proof that the debt came from the creditor and documentation of all the money owed. Creditors may struggle to produce this paperwork in time or be unable to do so at all.

Couple caught in bankruptcy scheme after overlooking small detail

In the dawning days of the Internet age, there were only a few fonts to choose from. Times New Roman, of course, was the standard font that everyone using the early versions of Microsoft Word relied upon. 

The options were few, but the technology was new and exciting. Unfortunately, these limited font options left one married couple facing a charge of fraud under their country's bankruptcy laws.

The pros and cons of having multiple credit cards

It isn't uncommon for Virginia residents and others to have more than one credit card. In fact, there can be a variety of benefits to having multiple cards. Those benefits include having more money to handle an emergency situation and a greater chance of having a lower credit card utilization rate. However, it is important to know how to manage credit card debt as it can be easy to use the entire available balance or forget to make a payment.

It is important to know that a credit score can go down simply by applying for a credit card. This is because a lender will likely perform a hard inquiry before approving or denying an application. Furthermore, paying multiple annual fees can erode a cardholder's overall purchasing power. It may also reduce the value of any rewards points or cash back that a person receives by using a card.

Chapter 13 bankruptcy can help with the worsening debt crisis

For Virginians and people across the nation, debt is reaching critical levels. Student loans are perceived to be the culprit for the debt problems many Americans face, but there are other reasons. For example, people rely on credit cards to a troubling degree. The combination is making it nearly impossible to get ahead and forcing debtors to consider solutions like Chapter 13 bankruptcy.

Experian says that people owed $1.4 trillion in student loans in early 2019. This is 116% higher than 10 years ago. Credit card debt adds to their financial difficulties. Millennials do not accrue the same amount of credit card debt as past generations. Still, the bulk of the debt for those aged 25 to 34 is due to credit cards. A study by WalletHub suggests that credit card debt will rise by $70 billion this year.

Courts say not enough people getting bankruptcy done right

About four years after the start of the 2008 financial crisis, the U.S. Federal Judiciary pointed out that people were using more non-attorney preparers to file bankruptcy, much as many use tax preparers who are not practicing lawyers.

Its website, maintained by the Administrative Office of the U.S. Courts, warned “U.S. bankruptcy courts increasingly are concerned with abuses committed by some non-lawyers in the business of helping prepare bankruptcy filing documents for a fee.”

Student loan debt is creating an affordability crisis

Every year, almost one in three Americans who file Chapter 7 bankruptcies are burdened by student loans. However, this kind of debt is not usually dischargeable in Virginia or any other state. When filers have these loans, they usually account for about half of their total financial obligations. These were two of the discoveries made by researchers who studied 1,083 Chapter 7 cases from the financial online marketplace LendEDU.

The cost of attending college has more than doubled in the last 35 years, and the total amount of educational debt in the United States has now grown to a worrying $1.5 trillion. That is more than Americans owe on car loans or credit cards. According to a leading student loan comparison website, graduating students in 2018 entered the workforce weighed down by an average debt of $29,800. Analysts say that student loans this large are bad for the economy as they make it far more difficult for young people to become homeowners or start families.

Young people facing more overdue credit card bills

A growing number of people in Virginia are facing escalating credit card balances. According to the New York Federal Reserve, younger Americans traditionally steered clear of credit card debt. Many millennials came of age during the financial crisis in 2008 and became more thrifty as a result. However, credit card delinquencies for 90 days or more have risen the most among younger Americans. For people age 18 to 29, these types of delinquencies reached 8% of all credit card balances in the first quarter of 2019.

These statistics reflect a changing approach to credit card debt as well as changing approaches by credit card issuers. Card companies have found that generous signup bonuses and travel credits are more effective in attracting younger consumers than ongoing cash-back or no-interest programs. In addition, consumer debt is rising at the same time that the Federal Reserve is hiking prime interest rates. While an increase in federal rates is not directly linked to consumer credit interest rates, it generally accompanies and influences the rates of a range of consumer products.

Supreme Court applies objective test in bankruptcy case

The Supreme Court ruled on June 3 that creditors in Virginia and around the country may be held in civil contempt if they pursue payment of a debt that has been discharged in a bankruptcy. The nation's highest court applied an objective reasonableness standard to decide a case involving an Oregon business center's efforts to collect a debt from a real estate developer who had filed for bankruptcy. This standard means that creditors can be held in contempt when they seek payment of a debt that they have no reasonable basis to believe is not included in a discharge order.

The real estate developer based his lawsuit on the principle of strict liability. He argued that the business park should be held in contempt because it took action knowing that a bankruptcy had been filed and a discharge order issued. The bankruptcy court agreed and ruled in the man's favor. However, a bankruptcy appellate court reversed the ruling and the U.S. Court of Appeals for the 9th Circuit affirmed. Those courts based their decisions on the business park's good faith belief that the discharge order did not include the debt in question.

How patients can work to diminish medical debt

Lots of Virginia residents find themselves facing insurmountable debt. In many cases, that debt arises due to medical bills. Even insured patients can rack up thousands of dollars in medical bills if they need pricey specialized treatment, expensive prescription drugs or out-of-network specialists. In fact, medical bills are the leading contributor to personal bankruptcy filings in the U.S. There are a few steps that people can take to help avoid medical debt or find relief if they are already struggling.

It can be very important for an individual to fully understand their insurance plan and advocate for themselves with its bureaucracy. Out-of-network exclusions can be a particular problem, especially when a particular out-of-network provider is the only good source of care in a certain region. Another issue to understand is the insurer's policies for getting specialist visits, lab tests or other forms of care approved in advance in order to avoid unwanted bills later on.

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