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The Fair Credit Reporting Act: what it is, what it provides for

Sometimes distressed consumers -- through no fault of their own -- cannot even see one of the sources of financial challenges confronting them.

That challenge is posed by adverse information appearing in their credit reports, which can work in insidious and unknown fashion to undermine their credibility with landlords, lenders and even employers.

For obvious reasons, it is essential for any consumer in Texas or elsewhere in the country to be fully and routinely appraised of all the material information residing in his or her credit report and to be able to quickly effect repairs to erroneous data.

Bankruptcy: a powerful and often underutilized consumer tool

It is perhaps apt imagery to refer to the slippery slope of debt when discussing the financial difficulties that over time ensnare many Americans and introduce material instability into their lives.

Although the details vary from case to case, it is not uncommon for debt problems to first emerge for individuals and families after an unexpected expense arises relating to an unforeseen circumstance.

Many people nodding in agreement with that above sentence might likely point to a troublesome catalyst in their lives, such as medical debt, which is a common precursor of financial difficulty and a leading cause of bankruptcy filings in Texas and throughout the United States.

Acknowledged: the singular nature of medical debt

Media pundits and a host of other commentators who focus closely upon debt relief matters in the United States have long noted that medical costs are flatly a different animal when compared with other forms of consumer debt.

Any person in Texas or elsewhere who is saddled with a painfully high level of medical debt certainly agrees with that assessment and can readily explain why such is the case.

So, too, can executives with FICO, an American public company that provides the credit scores relied upon by millions of service providers -- banks, car companies, mortgage lenders, apartment owners and more -- seeking information on would-be customers’ past history of dealing with debt.

Debt collectors: things a harassed consumer needs to know

Based on a wide number of media reports, as well as on the high volume of phone calls and letters received by state and federal offices, consumers dealing with debt collection companies are often at a total loss as to how to proceed.

Put another way: Many persons in Texas and nationally seeking debt relief feel stressed and often overwhelmed by their dealings with aggressive debt collectors. They feel that they must simply suffer the harassment and abuse that is forthcoming from such parties, lacking any viable resources or tools to deal promptly and purposely with such behavior.

The difficulty in reducing student loan debt

It is extremely unfortunate that filing for bankruptcy has such a negative connotation to it, as it is an important tool for debt relief. There are people throughout San Antonio who find themselves overwhelmed by financial problems of one kind or another. They turn to a bankruptcy attorney to discuss their options and, many times, ultimately file for bankruptcy. Though bankruptcy may not discharge all of their debts, it is still a fresh start.

One big category of debt that is largely untouched by bankruptcy is student loan debt. Unfortunately, most student loans will remain after someone files for bankruptcy, and while that may be a majority of a person's debt, having little other debt will certainly help to relieve some of the pressure and stress of financial problems.

Debt-settlement industry: persistently under fire

Talk about a business niche that has an unrelenting image problem.

Once again, the debt-settlement industry is making media waves for the adverse repercussions visited on consumers across the country who solicit the “assistance” of companies that pledge debt relief and simply don’t deliver on their promises.

As many of our readers in Texas and elsewhere likely already know from having heard stories or personally being involved with such companies, negative news concerning these business entities is far from singular or surprising.

Regarding nation's debt crisis, are we digging out or digging in?

So, are we doing better or not? Has the national economy at least stopped snarling at the middle class sufficiently enough over the past couple years to enable most challenged debtors to regain their financial footing?

These questions certainly seem reasonable enough to ask, and at this time. After all, the monstrous housing collapse and attendant credit crisis -- the so-called Great Recession -- that was visited upon Texas and the rest of the country is commonly gauged by economists to have mushroomed in 2007. That was long enough ago to enable some perspective now and to seemingly allow millions of beleaguered consumers time to claw back from troublesome debt levels toward renewed financial stability.

Then again, maybe not. A financial writer in a recent Wall Street Journal article argues that, while high numbers of middle-class consumers have in fact been able to pare down high debt levels in recent years, that debt relief is now being undercut by new borrowing.

After bankruptcy, rebuilding credit is important

The decision to file for bankruptcy is a big one, and those who understand the implications of a filing do not take it lightly. Probably the biggest reason to be cautious about filing for bankruptcy is the impact a filing has on one’s credit. While a bankruptcy filing may not have an immediate drastically negative effect on one’s credit score, depending on the debtor’s circumstances, there are certainly more long-term challenges it presents.

A bankruptcy filing will negatively impact one’s credit score for as long as it appears on one’s credit report. For Chapter 7 bankruptcy, this is ten years from the filing date. For Chapter 13 bankruptcy, the number is ten years. During that time, one will have challenges obtaining credit since many lenders will not grant credit with a bankruptcy on one’s credit report. This can obviously make it challenging when one needs to finance a home or auto purchase.

Report shows consumers are charging more, paying down less

Even the most skeptical among us can agree that the economy is finally starting to show signs of sustained recovery following the recent recession, as foreclosures have dropped, employment is up and consumers are spending more.

Indeed, a recently released report by the website CardHub.com suggests that not only are consumers spending more here in the U.S., they're relying more on their credit cards to do it, while not necessarily paying them down very quickly.

According to the report, $32.5 billion of credit card debt was paid down by U.S. consumers during the first quarter of 2014. While this certainly seems like an impressive figure at first glance, it's actually 28 percent less than the amount of credit card debt paid down by consumers in 2009.

U.S. Supreme Court weighs in on bankruptcy exemption question

If you’re a Texas resident who is besieged by high debt levels brought on by factors beyond your control, you are undoubtedly pursuing debt relief.

In doing so, you have perhaps considered filing for bankruptcy, wondering while thinking about the process whether certain of your assets will be shielded from creditors.

The short answer to that question is this: The federal Bankruptcy Code does allow debtors in the bankruptcy process to protect certain assets from the reach of creditors. Deemed “exempt” assets, such property commonly includes a threshold amount of equity in a home, an automobile, occupational tools of trade and some home appliances and furnishings. Many states, including Texas, also have laws that list assets qualifying for protection from creditors.

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