Missing loan payments can trigger debt collectors to contact people in California. These entities that pursue money for unpaid creditors have the right to contact people by mail, email, telephone and text message. Although debtors have obligations to pay their loans, consumer laws grant them some rights when interacting with collection agents.
Technically, there are no restrictions on the number of times a person can file for bankruptcy. However, after a discharge in a Chapter 7 or Chapter 13 case, the bankruptcy petitioner may have to wait for a period of time before he or she can file for bankruptcy again. The time periods that apply to California filers vary based on the types of bankruptcy involved.
Debt collectors in California and around the country have been known to take legal action against consumers over debts that were taken out by identity thieves or other malicious individuals. These lawsuits are generally dismissed with prejudice once the true provenance of the debt has been established, but that does little for consumers who have had to spend significant amounts of time and money defending themselves.
Consumer debt has grown to an all-time high in California and in other states. The national consumer revolving debt is now around $1,037 trillion. Consumers can easily let credit card debt accumulate on their accounts if they are not paying close attention.
Individuals in California and around the country who are struggling with significant debt often put off filing for bankruptcy because they are concerned about the possible consequences. However, a recent study suggests that this delay can often be far more financially damaging. Researchers from the Notre Dame University Law Review came to this conclusion after scrutinizing data from the Consumer Bankruptcy Project.
At least four of the U.S. Circuit Courts of Appeals, including the 9th Circuit that includes California, have ruled that damages for emotional distress may be warranted in cases of a willful violation of a bankruptcy's automatic stay. The purpose of the automatic stay of collection efforts is to provide the bankruptcy petitioner with a breathing spell and temporarily relieve them of the financial pressures that led to the bankruptcy.
Bankruptcy can offer a life-changing escape and debt relief opportunity to people in California struggling with crushing debt. While the opportunities presented by filing for bankruptcy can be substantial, people are often hesitant to commit to filing. There are a number of reasons why this is the case: Sometimes, people simply want to see if they can avoid taking the additional step of bankruptcy. Other times, people feel a sense of guilt or shame. However, waiting to file bankruptcy can make a person's debt burden even harder to overcome.
Many California residents may be battling with debt. Some individuals purchase things that they cannot afford, so they put the things they buy on credit. This becomes problematic when the borrower can no longer repay the lender.
Those who are planning on filing for bankruptcy in California or any other state should understand its true impact on their credit. For instance, some believe that a lack of negative information on their credit report prior to filing for bankruptcy will reduce its negative impact. However, the fact that someone has filed for bankruptcy will be a significant negative mark regardless of what happened before he or she did so.
For those in California having difficulty repaying student loans, the new Federal Reserve Chairman is wondering why these loans are not dischargeable in a bankruptcy. However, this is a question only Congress can answer.