Debt Snowball vs Debt Avalanche

Wooden blocks spelling out the word "debt"

Eliminating debt can feel like an overwhelming task – especially without the right plan in place. Thankfully, there are many different repayment strategies that you can choose in order to begin rapidly paying off your balance. Two of the most popular and effective debt repayment plans are known as the “snowball” and “avalanche” methods. While these tactics are similar, they have some key differences that can help you decide which strategy is best for you.

What is the Snowball Method?

With the debt snowball method, you pay off debts in order of smallest to largest balances. By putting the majority of your money toward loans with smaller balances and making minimum payments to all other debts, you can swiftly cut through your debts. This method is popular because it is easy to implement and provides quick results, which is great for building momentum and motivation.

What is the Avalanche Method?

In the debt avalanche method, you pay off loans based on interest rates. By targeting loans with higher interest rates first while making minimum payments to any other debts, you can quickly pay off debt while cutting down on the amount of interest you pay over time.

Though this tactic is great for eliminating debt quickly and with the least amount of interest, it is a little more difficult to implement and keep up with. The debt avalanche method also produces slower short-term results, which may be challenging for individuals who struggle with motivation.

Which Debt Repayment Method is Best?

Unfortunately, there is no “one-size-fits-all” plan when it comes to debt payment plans. It all comes down to which plan you can feasibly implement and keep up with – after all, no plan is useful if you won’t be able to stick to it. To help you determine which tactic may be better for you, here are some pros and cons of both debt repayment strategies:

Debt Avalanche

  • Eliminates debt faster
  • Reduces total interest paid
  • More difficult to implement
  • Takes more time to see results

Debt Snowball

  • Produces results quickly
  • Builds motivation and momentum
  • Takes more time to eliminate debt
  • Requires you to pay more interest

When to File for Bankruptcy

If you have a mountain of debt that you are struggling to pay, these repayment strategies may still feel too overwhelming. In some cases, filing for bankruptcy is the best way to take control of your financial situation. Here are some signs that you should file for bankruptcy:

  • You’re at risk of foreclosure
  • Your liabilities exceed your income
  • You don’t have any savings
  • You’ve already tried negotiating

Get Legal Help Today

Don’t let your life become bogged down by unmanageable debt. If you’re struggling to make ends meet because of debt, it may be time to contact a legal expert who can help you assess your options. That’s where the trusted attorneys at OlsenDaines can help. Our team has over 40 years of experience serving Oregon and Washington, and we strive to make it easy for you to get back on your feet. To get started, schedule a free legal consultation today.

 

Bankruptcy and HOA: What You Need to Know

What you need to know about filing for bankruptcy with an HOA - OlsenDaines bankruptcy attorneys in Oregon

If you live on a property with a homeowner’s association and are overwhelmed with late dues or fees, then you may be wondering if bankruptcy is a viable way to eliminate these debts. While this may seem like a straightforward question, there are several factors that can impact whether or not your HOA debts can be discharged through bankruptcy. To help give you an idea of what your situation might look like, the experts at OlsenDaines have put together a guide on what you need to know about bankruptcy and HOA.

Can I Discharge My HOA Debt Through Bankruptcy?

Your specific circumstances will impact whether or not you can dismiss HOA debt by filing for bankruptcy. To determine if your HOA fees can be discharged, begin by asking yourself these questions:

Which chapter of bankruptcy are you filing for? The two most common chapters of bankruptcy are Chapter 7 and Chapter 13. While Chapter 7 bankruptcy is intended for lower-income individuals with fewer assets, Chapter 13 is geared toward those with more assets and disposable income. Knowing which chapter you qualify for will give you a better understanding of what your debt relief options are.

Do you plan to keep the property? With both chapters of bankruptcy, you should be able to wipe out past HOA dues by forfeiting the property. However, if you plan to keep your condo or home, you will still be responsible for paying your HOA debts.

With Chapter 7 bankruptcy, you should treat the HOA like a bank holding a mortgage and plan to make payments both before and after you file. It’s important to know that the HOA could still foreclose on your home if they have a lien on your property, even if your debts are discharged.

Meanwhile, if you are filing for Chapter 13 bankruptcy and plan to keep the property, your repayment options may look a little different. Since this chapter allows you to reconfigure your debts into a payment plan, your past HOA fees should be included in your monthly installment.

Can an HOA Foreclose on My Property After Bankruptcy?

Even if you are granted bankruptcy, an HOA may be able to foreclose on your property depending on your specific situation. Here are some instances where an HOA can foreclose on your property after bankruptcy:

  • Your foreclosure has already taken place: Bankruptcy cannot undo a foreclosure that has already taken place. So, if the HOA has already foreclosed on your property and the home is no longer in your name, the outcome of your bankruptcy petition will not be able to reverse the process.
  • The HOA filed a lien against your property: Once an HOA files a lien against your property, they may begin the foreclosure process. Though you are granted an “automatic stay” while filing for bankruptcy – meaning that the HOA cannot move forward with the foreclosure process during your petition – they may be able to resume the process once you are granted bankruptcy. Bankruptcy cannot get rid of a lien filed against you even if your debts are discharged, so your property may still be foreclosed on.
  • You accrue more fees after bankruptcy: Bankruptcy will only discharge debts accrued prior to your petition, so you will be responsible for any fees due after you are granted bankruptcy. This is true even if you are forfeiting the property; you will have to pay any fees that accumulate between the time you are granted bankruptcy and the sale of your home. To avoid accruing more fees and debt, it is best to wait until the property is sold before filing for bankruptcy if you are planning to surrender the home.

Your Local Bankruptcy Experts

Here at OlsenDaines, we understand how stressful and complicated it can be to file for bankruptcy. That is why our experienced attorneys are always here to help. We strive to make the process as fast and easy as possible while ensuring that you are getting the most out of your petition. With over 40 years of experience serving people throughout Oregon, we are very familiar with local bankruptcy laws and are prepared to help you regain control over your finances so you can truly start fresh. If you are looking into bankruptcy and would like to speak with an expert, contact us today to set up a free legal consultation!

Does Debt Disappear After Bankruptcy?

Does debt disappear after filing for bankruptcy? Debt relief attorneys at OlsenDaines in Oregon State

If you’ve found yourself battling against a mountain of debt, you may be considering bankruptcy as a way to get back on your feet. After all, filing for bankruptcy can be an effective method for relieving debt and regaining control over your finances. But, should you file for bankruptcy, will all of your debt disappear?

The answer to that question is a little complicated. Though bankruptcy can help relieve many different kinds of debt, there are some kinds that will stick with you. If you are considering filing for bankruptcy, it’s important for you to know what kinds of debts are covered and which kinds are not.

What Debts Can Be Forgiven by Bankruptcy?

Bankruptcy can help you regain financial stability by relieving a wide variety of debts. Your exact amount of relief, however, will largely depend on your specific situation and what kind of bankruptcy you qualify for. If you aren’t sure which path would be best for you, a bankruptcy attorney can help you find a solution that relieves as much debt as possible.

Chapter 7

Chapter 7 bankruptcy is intended for individuals with a lower income and fewer nonessential assets. To qualify for this type, you have to pass a means test, which verifies your income. The types of debt that this chapter can cover include:

  • Medical bills
  • Overdue utility charges
  • Outstanding credit cards
  • Collection agency accounts
  • Lease agreement deficiencies
  • Checks written on insufficient funds

Chapter 13

Chapter 13 bankruptcy is intended for individuals with more disposable income and more nonessential assets. This type of bankruptcy is considered “reorganization”, where you will create a payment plan to repay secured debts – such as alimony, child support, and mortgage delinquencies.

Depending on your specific situation, other types of debt may be reduced, but that is not always the case. Chapter 13 bankruptcy can be tricky to navigate, so it is best to contact a skilled bankruptcy attorney to determine the best approach for debt relief.

What Debts Cannot Be Forgiven by Bankruptcy?

Though bankruptcy can absolve many kinds of debt, there are a few types that usually cannot be discharged. The types of debt that bankruptcy generally cannot cover are:

  • Student loans
  • Alimony and child support
  • Tax debts

While these debts are generally not forgiven through bankruptcy, each person’s situation is different. A knowledgeable and experienced bankruptcy attorney can examine your unique circumstances to help you relieve as much debt as possible.

Experienced Debt Relief Attorneys

Bankruptcy can be difficult to navigate, and without the right guidance, you may miss
opportunities to relieve debt. If you are considering filing for bankruptcy, contact the skilled bankruptcy attorneys at OlsenDaines in Washington and Oregon today. Our experienced lawyers understand the ins and outs of bankruptcy law, and they can help you get the best outcome possible for your situation. We can help you through any step of the process so you can regain financial security as easily and effectively as possible. Call us today to schedule your free legal consultation.

How to Avoid Debt This Holiday Season

How to avoid debt this holiday season in Salem OR - OlsenDaines bankruptcy attorneys

The reality of holiday debt usually doesn’t sink in until you get the bills or check accounts. Too much unpaid debt can cause your credit score to drop so we are sharing some tips to follow to avoid racking up holiday debt.

Pay in Cash When Possible

Statistics show 57% of Americans with credit card debt are willing to accrue more debt during the holidays. Gifts and décor commonly cause the most holiday debt, and since consumers rarely save for this, they charge for it.

Avoid this added debt by setting a little money aside each month to pay for gifts and holiday décor in cash. Leave your credit card at home to reduce the temptation to make spontaneous purchases, and use debit cards. Several studies have shown consumers spend less with cash, and it comes with less security risk.

Create a Budget and Make Lists

Decide how much you are going to spend, including travel, and ensure it doesn’t prevent you from making necessary payments. Make a list of things you need, a list for gifts, stick by it, and cross them off as you go.

Consider having some gifts be homemade, such as mixes in a jar, which you can often make for less than buying. If you are easily influenced by others, go shopping alone to avoid going over budget.

Use Credit Wisely

If you must use a credit card, try to stay within less than 20% of the limit, and don’t max them out. Set a budget the same as you would for cash, but check the remaining balance on the cards.

Use credit cards that give rewards for purchases and apply points you have already accumulated to gifts. Don’t be tempted to take out cash advances on your credit cards, because they often have high-interest rates.

Experts in Bankruptcy Law

With some careful planning, you can avoid falling into the holiday debt trap and you will enjoy the holidays better without the stress of debt.

We hope you have a great holiday season and if you need debt relief, consider OlsenDaines. We have offices all throughout Oregon and Washington with highly experienced bankruptcy attorneys ready to help! Just give us a call today to schedule a consultation. 

Am I Personally Responsible for My Business Debts?

Many people are in business for themselves, and being your own boss certainly has its advantages. Of course, there are certain responsibilities that go along with business ownership as well. The lay of the land can be a bit tricky when you are trying to determine whether you can be held personally responsible for debts that are incurred by your business. We will provide some insight in this blog post.

 

Business Formation

 

When you are starting your own business, you should be very discerning about the business entity that you choose, because it will have everything to do with personal responsibility for business debts. If you are a sole proprietor, there is no separation between you as an individual and the actions of your business. As a result, you would absolutely be responsible for debts incurred by the business. The same thing is true of a general partnership. Each partner is responsible for all of the partnership’s debts. It may not sound fair, but if you have personal assets, and your partner is insolvent, you would be responsible for all of the debts, not just your 50 percent share.

 

Things are different with limited liability companies and corporations. Generally speaking, you would not be personally responsible for business debts under these structures. However, there are exceptions to this rule. If you personally guarantee a business-related debt in writing, it would be your personal responsibility. This is not uncommon, because some vendors, leaseholders, and others know that the business entity would not be liable, so they insist on personal guarantees.

 

Of course, if you put personal property up as collateral for a loan that you will use for business purposes, the lender could seek to attach the property if you don’t pay the debt. If you use a personal line of credit or a credit card to infuse your business with resources, the business structure would do nothing to limit your liability. When you digest all of the above information, you can see why you should think long and hard about the business structure that you should utilize when you are establishing your enterprise.

 

Schedule a Complimentary Case Evaluation

 

If your business debt is becoming unmanageable, there are steps that you can take to ease the burden. We are here for you if you would like to discuss them with a licensed Portland, Oregon bankruptcy attorney. Our firm offers free consultations to people in The City of Roses and many other communities throughout the Beaver State. To schedule an appointment, call us toll-free at 1-800-682-9568.

 

 

Is Bankruptcy My Only Option?

If your level of debt has become unmanageable, bankruptcy may be an option, but the ideal course of action will depend upon the circumstances. There are some situations that can be addressed without filing for bankruptcy, and you can always file at some future time if you find that there is really no viable alternative. Let’s look at a couple of basic scenarios that can potentially be resolved without a bankruptcy filing.

Stop Collection Agency Harassment

By law, debt collectors must adhere to certain statutory rules, but it is not entirely uncommon for them to step out of bounds. These guidelines are contained within The Fair Debt Collection Practices Act (FDCPA) that was enacted back in 1978. First and perhaps most importantly, if you choose to do so, you can send collectors a cease-and-desist letter, and they will be forced to discontinue the collection calls. Short of that, under provisions contained within the statute, debt collectors cannot contact you before eight a.m. or after nine p.m. Plus, they cannot contact you at work if they are aware of the fact that your employer does not allow you to take calls from collection agencies while you are on the job or if you have told them to not call you at work. If you have an attorney handling your debt relief efforts, the collectors will be required to speak with your lawyer and they will not be allowed to contact you personally.

There is also the matter of outright harassment. Debt collectors can be held liable if they threaten you with physical violence of any kind, and it is also illegal for them to threaten to mar your reputation. They are prohibited from using any foul or abusive language during their communications, and they must identify themselves as bill collectors when they contact you. If a bill collector violates any of these parameters, you can file a lawsuit to collect any damages that you may incur, and a successful judgment can include your legal fees and as much as $1000 in statutory damages.

Negotiate with Creditors

If credit card debt is the source of your financial difficulties, you can try to negotiate with the credit companies before the matter goes to a collection agency. Company policies vary, and the specifics of the situation will certainly be taken into account. You can ask if they will be willing to change your payment date, and you may be able to negotiate a lower interest rate. Under some circumstances, the company may be willing to provide a payment reduction on a temporary basis. These are a few possibilities, but there are others.

Schedule a Free Case Evaluation

There are a number of different debt relief strategies that can be implemented, and it can be difficult to make the right choice without the appropriate legal advice. Our service area includes Eugene, Portland, Salem, Roseburg, and a number of other cities in Oregon and Washington. If you will like to discuss your options with a local bankruptcy attorney, you can set up a free consultation if you call us right now at 1-800-682-9568.