Category Archives: debt settlement

How can I stop debt collectors from harassing me?

Ever had your day interrupted by a call from a debt collector? Debt collectors have a reputation of being rude and even nasty at times. They might say it’s their job to be annoying. After all, they’re just trying to get you to pay your fair share, right?

Debt collectors harassing you? They may owe  you money!

Debt collectors harassing you? Contact our law office. You may find they owe you money!

Well, not so fast. This is America, and even if you owe someone money you still have rights. According to the Fair Debt Collection Practices Act, debt collectors aren’t allowed to harass you by:

  • Making threats
  • Calling repeatedly just to annoy you
  • Swearing / using profanity

If you’re being harassed by debt collectors, contact my office for a free initial consult. Who knows, you may even find that collectors owe you money after we’re done talking with them.

Do medical bills go away in a RI Bankruptcy filing?

It’s been estimated that over 60% of bankruptcies are filed due to hospital visits, cancer treatments and other health expenditures. Fortunately, by filing for bankruptcy in Rhode Island, you can usually eliminate debt owed to:

  • hospitals & medical clinics
  • laboratories & medical imaging/radiography
  • doctors, physician assistants & nurses
  • dentists & orthodontists
  • physical therapists & chiropractors

So yes, typically any unsecured medical debt can be eliminated in a RI Chapter 7 Bankruptcy filing, regardless of whether it’s $10 or $1 million you owe. You’ll want to consult with a RI attorney experienced with bankruptcy to guide you through the process, especially if you’ll need to keep receiving health care services following your bankruptcy filing for a chronic medical condition.

What should I bring to my free bankruptcy consultation?

People who are considering filing bankruptcy with me often ask what to bring for our first meeting. (If you’re interested in scheduling a free initial consultation to see if bankruptcy is a good option for you, call my office at 401.738.3030 today.) The purpose of this first meeting is to ensure that we’re both comfortable that going forward with a bankruptcy filing makes sense in your specific situation. So it’s generally helpful if you can bring in your recent bills, collection notices, and any lawsuit-related papers, as well as any other documents that you’d like me to take a look at. At the end of the meeting, I can give you a checklist so you’ll know exactly what information my office will need from you in order to get your case prepared and filed.

Debt Settlement as an Alternative to Bankruptcy?

Many clients who come to me to discuss their bankruptcy options have previously tried other means of resolving their overwhelming debt issues. Most often these clients have attempted to work with a debt settlement company. Debt settlement is a process which attempts to get the credit card companies to accept less than 100% of what they are owed on a credit card debt. Ordinarily, the credit card companies are only willing to offer a discount if the credit card payments are seriously (many months) delinquent. They generally insist on receiving the full amount of the settlement within one to three months. This makes it very difficult for people to settle credit cards on their own, because they have to accumulate a fairly large amount of money to have available as a settlement funds. The debt settlement companies deal with this by insisting as part of your contract with them that you pay them a hefty amount each month to eventually build a settlement fund.  Typically, however, the first $3,500 they receive from you is applied to their fee. Only then does your “settlement fund” start to build. Problems with the debt settlement alternative include the following:

  • some of the outfits in debt settlement business are disreputable fly-by-nights
  • the fees are often quite steep
  • assuming that they are able arrange some settlements, by the time these settlements start coming through, you will likely have dealt with many months of creditor harassment, and may be facing lawsuits, wage attachments, and liens on your home
  • there will likely be a very material negative impact on your credit score
  • generally speaking, unlike the situation with bankruptcy, when debt is discharged in the context of a debt settlement, the amount that the creditor agrees to write off will be reported as income to you to the tax authorities so you will be paying taxes on the amount that is forgiven
  • if you become dissatisfied with the way things are going with your debt settlement program (for example if lawsuits start being filed against you) and you want out, it may be difficult to get a meaningful refund.

I should caution that because of the nature of my practice, I rarely see success stories with debt settlement alternatives. That doesn’t mean they don’t exist and the purpose of this post is not to dissuade you from checking into the debt settlement alternative. However, just like everything else, you should proceed cautiously – ask a lot of questions, insist on getting everything in writing, read the fine print, and be comfortable with the refund policy if things get ugly. Most importantly be sure that you are dealing with a reputable company – remember – just because they advertise on the radio or television does not guarantee that they are legitimate.

What kinds of debt can bankruptcy eliminate?

A Rhode Island bankruptcy filing can be used to get rid of many types of debt. Filing under Chapter 7  may allow many types of debts to be wiped out completely:

  • credit card debt
  • electric, gas, water, and other utility bills
  • medical, dental, and vision bills
  • personal and unsecured bank loans
  • automobile loan obligations remaining on a repossessed vehicle
  • mortgage loan obligations remaining on a foreclosed home

Any child support obligations, recent taxes, and student loans are generally not eligible for discharge. But in some cases, even student loans can be eliminated in a bankruptcy if it can be shown that these debts create an unreasonable hardship for you.

Can I modify my mortgage with a bankruptcy in Rhode Island?

According to a recent study, the typical Rhode Island house lost 25% of its value last year.  For many homeowners, the only alternative to losing a home to foreclosure may be to modify their mortgage.  Fortunately, current bankruptcy laws allow for many Rhode Island homeowners to dramatically reduce their monthly mortgage payments.

If your house is valued at less than you own on your first mortgage, you may be able to eliminate most of yoursecond mortgage with a bankruptcy (for owners of rental properties or investment real estate, it’s even better: you can often use a RI bankruptcy filing to modify both the first and second mortgage).  This can be done by filing for a Chapter 13 bankruptcy: you eliminate your second mortgage obligation and instead make a series of monthly payments for a limited period of time (between 36 and 60 months, depending on your income).

Given the magnitude of most second mortgages, this approach can result in significant savings. For example, if you have a $40,000 second mortgage, you could potentially eliminate all but $7,200 of your debt in a Chapter 13 bankruptcy.