What to Know About the Student Loan Payment Pause Extension

Notebook page that reads "Student Loan Relief" with image of graduation cap and money

Federal student loan payments have been paused since March 2020, and the Department of Education recently announced that borrowers will have even more time before payments are set to resume. Though the loans have been in limbo for nearly three years now, it’s important to remain prepared for when the pause is lifted. To help you get ready for when payments resume, here’s what you need to know about the recent student loan pause extension:

Why the Student Loan Payment Pause Was Extended

Student loans were originally put on hold to provide economic relief at the beginning of the COVID-19 pandemic. Though the pause was only supposed to last for a few months, the pandemic continued to severely impact the financial stability of millions of Americans well beyond the expected timeline. To help borrowers through the ongoing public health crisis, the Trump and Biden administrations extended the pause several times over the last few years.

Before the most recent extension, student loan bills were scheduled to resume in January of 2023. However, the Biden administration also took steps toward Student loan forgiveness by announcing that a new program would discharge up to $20,000 of federal loans for each qualifying student.

Before students could find relief through loan forgiveness several states and institutions filed lawsuits against the plan to prevent it from taking effect. With the legality of the forgiveness program in question, the case has gone all the way to the Supreme Court. The Justices have set a hearing date on February 28, 2023, to determine whether the President has the authority to eliminate the loans without an act of Congress.

While student loan forgiveness is being debated in court, the payment pause will remain in effect. According to the Department of Education, the pause is extended because they “don’t think it’s right to ask you to pay on loans you wouldn’t have to pay were it not for the lawsuits challenging the program.”

When Will Student Loan Payments Resume?

Unlike the previous pause extensions, the most recent extension doesn’t have a specific end date. Instead, the timeline will be determined by the duration of the legal battle over the student loan forgiveness program.

If the Supreme Court reaches a decision prior to June 2023, then payments will resume 60 days from the date of that decision. However, if the Supreme Court does not decide by then, the payments will begin 60 days after June 30, 2023. The absolute latest that payments will resume is August 29, 2023 – though borrowers should remain prepared in case the pause ends sooner.

Student Loan Payment Pause FAQs

What does the pause on student loan payments mean?

The pause on federal student loans allows students to temporarily skip payments without consequences. The Department of Education stopped collections on defaulted accounts and set loan interest rates to 0% so that debt does not continue to accrue.

What if I was behind on my student loans before the pause began?

Millions of Americans were behind on student loan payments even before the pause began. To address this problem, the Department of Education announced the Fresh Start initiative, which provides relief to payers who are in default by:

  • Granting access to federal student aid for students with an unfinished degree
  • Not garnishing wages or withholding tax refunds and Social Security payments
  • Restoring the ability to rehabilitate loans later on down the road
  • Providing access to student loan forgiveness programs and IDR plans

Should I keep paying during the student loan pause?

It is possible to continue making payments during the student loan pause, and doing so could be beneficial depending on your situation. Ask yourself these questions to determine if it makes sense for you to continue repaying your loans:

  • Do I have other forms of debt? If you are swamped with debts outside of your student loans, then you should take this opportunity to pay off as much as possible. Use the cash you’re saving on student loans to pay down things like credit cards, personal loans, medical bills, and more.
  • Do I have a healthy savings account? The main purpose of the student loan pause is to give borrowers the chance to build financial stability. If you are living paycheck to paycheck without any backup savings, this payment pause may be a good time to fill up your bank account with a little extra padding.
  • Will I still have a large balance even if student loans are forgiven? If all of your debt could be forgiven through the student loan forgiveness program, then it’s best to wait until the Supreme Court reaches a decision to avoid making payments on a loan that could be wiped out entirely. However, if you will still have a lot left on your account even if a portion of your loans are forgiven – and you have the ability to pay – then it could be a good idea to continue with regular payments.
  • Can I eliminate student loans in bankruptcy? The Department of Education issued new guidelines in November to make it easier to eliminate student loans in bankruptcy.  Many people who could not eliminate student loans int eh past in a bankruptcy, can now utilize these new guidelines and eliminate their student loans.
  • Am I using an income-driven repayment (IDR) plan? With an IDR plan, your loan balance will be forgiven completely after making a certain number of qualifying payments. During the student loan payment pause, each month counts toward a qualifying payment regardless of whether or not you pay. With this in mind, it typically doesn’t make sense to continue with payments when enrolled in an IDR plan.

Will automatic payments restart once the pause is lifted?

Automatic payments will not restart on their own. Borrowers will have to opt-in to confirm their enrollment before payments will be taken out of their accounts.

Student Loan Debt Relief

With the student loan forgiveness program on hold, many borrowers are waiting eagerly for the Supreme Court to reach a decision before taking action. However, it’s best to be proactive so you are financially prepared for the payments to resume, no matter what the legal verdict is.

If you are feeling overwhelmed by your financial situation and are concerned about affording your student loans once payments start back up, don’t wait to get help! The debt relief attorneys at OlsenDaines can help you create a plan of action. With over 20 years of experience serving Oregon residents, we know how to access creative relief solutions that can take the stress of serious debt off of your shoulders. From finding other forms of student loan forgiveness to eliminating debts through bankruptcy, we can help you reach financial freedom no matter what your circumstances are.

Need help regaining control of your finances? Contact us to explore your options in a free legal consultation!

Explaining the New Bankruptcy Discharge Process for Student Loan Borrowers

Person adding up student loan debt on calculator

Over 42.8 million Americans have student loans, making it one of the most common forms of debt in the United States. While the amount of student loan debt has increased in recent years, it remains one of the most challenging types of debt to discharge through bankruptcy. However, the Department of Education recently reformed its policies to make the discharge process easier and more accessible to student loan borrowers. In this guide, we’ll explain everything you need to know about the new bankruptcy discharge process for student loans. 

Adversary Proceedings and “Undue Hardship”

In order to be considered for student loan discharge, individuals must initiate a separate lawsuit within their bankruptcy case called an “adversary proceeding”. During this process, the debtor is essentially suing the student loan lender. To do so, however, the debtor must demonstrate that he or she is experiencing “undue hardship” as a result of the loans.

Prior to these policy changes “undue hardship” was an undefined term in the bankruptcy code, which made it challenging for courts to judge each case by universal standards – leaving a lot of room for interpretation. 

In the past, most courts used something called the “Brunner Test” to determine who qualified for student loan discharge. This test was originally created in a 1987 court case during which a woman attempted to discharge her student loans less than a year after earning her degree. The goal of the test was to deter individuals from rushing into bankruptcy immediately after graduating, and it includes three questions:

  • Have you made a good-faith effort to repay the loans?
  • Are you unable to maintain a minimal standard of living while making the payments?
  • Is your financial situation likely to persist?

If the answer to each of these questions is “yes” and is supported by extensive evidence, then the loans can be discharged. 

On the surface, this may seem like a great system for discharging student debt. However, adversary proceedings are lengthy and costly, and they often weren’t successful because the requirements to pass the Brunner Test were still highly variable. Over time the test became increasingly difficult to pass, and many legal experts think it is now close to impossible to have loans discharged through this method.

How New Policy Changes Make Student Loan Discharge More Accessible

Debtors are still required to initiate an adversary proceeding within their bankruptcy case in order to be considered for student loan discharge.  The recent policy changes will ease the process by:

  • Setting clear standards for what is considered “undue hardship”: The current process uses arbitrary methods to review evidence and determine whether the debtor is experiencing undue hardship. According to the Department of Justice’s recent press release, the new process will include a thorough review of the debtor’s financial situation against concrete standards. These standards will be based on data provided by the Department of Education, along with other information that could contribute to undue hardship. This will ensure each debtor is judged fairly, without room for subjectivity.
  • Allowing for partial discharge if appropriate: Historically, student loans were either completely discharged or left entirely intact. The new policy changes allow for partial discharges depending on the debtor’s financial situation, which will make relief more accessible to those who are struggling with student loans. 

Considering Bankruptcy?

If you are overwhelmed with debt and need relief, don’t hesitate to contact the knowledgeable bankruptcy attorneys at OlsenDaines. Whether you’re dealing with significant student loans or other types of debt, we can assess your situation and help you determine the best course of action to regain financial stability. With over 40 years of experience serving individuals and businesses throughout the state of Oregon, we know how to help you with everything from foreclosures to creditor harassment. Whatever you’re facing, we can help. Just give us a call today to schedule your free legal consultation.

New Updates to Student Loan Forgiveness

White piggy bank with a graduation cap resting on top of a binder of paperwork

Student debt can be overwhelming. If you have a high balance or have been making payments for years, then it may feel like your loans will never come to an end. Recently, the US Department of Education made updates to its policies that will make it easier for individuals to overcome their student loan debt.

Some of the largest changes to their policies will make loan forgiveness more accessible to individuals on an Income-Driven Repayment Plan, which could offer relief to thousands of students across the country. To take advantage of these new updates to student loan forgiveness, it’s important to understand how they work and who qualifies.

What Is an Income-Driven Repayment Plan?

Income-driven repayment (IDR) plans are designed to help individuals who have student loan payments that are disproportionately high compared to their income. These plans calculate your required payments based on how much you earn annually rather than how much you owe. As a result, your payments could be lower and much more affordable than standard repayment options. Consumers may qualify for one of these four types of IDR plans:

  • Pay As You Earn (PAYE): Takes monthly payments at 10% of your discretionary income without exceeding what you would normally pay with a Standard Repayment Plan.
  • Revised Pay As You Earn (REPAYE): Takes monthly payments at 10% of your discretionary income.
  • Income-Based Repayment (IBR): Takes monthly payments at 10-15% of your discretionary income based on what you borrow, without exceeding what you would normally pay on a 10-year standard repayment plan.
  • Income-Contingent Repayment (ICR): Takes monthly payments at 20% of your discretionary income, or the amount you would pay over a 12-year fixed payment plan – whichever is less.

Problems with IDR and Student Loan Forgiveness

Most individuals on an IDR can qualify for student loan forgiveness after making consistent payments over 20-25 years. However, there are some challenges associated with IDR plans that could block consumers from having their loans forgiven, even if they qualify. The two main obstacles to having your loans forgiven on an IDR plan are:

  • Progress tracking: To have your student loans forgiven, you must make a certain amount of qualifying payments over the course of 20 to 25 years. One of the largest challenges associated with IDR and student loan forgiveness is progress tracking. Lack of documentation makes it difficult or impossible for consumers to tell when student loans are due to be forgiven.
  • Forbearance steering: IDR plans and student loan forgiveness can be hugely beneficial to consumers, but they are not ideal for loan providers. For this reason, many servicers broke the Education Department’s rules by pushing consumers toward forbearance – or payment pauses – rather than educating them about IDR options. These pauses are not a long-term solution and can allow your balance to grow even more. Not only that, but they also do not count toward student loan forgiveness requirements.

Updates to Student Loan Forgiveness Policies

The Education Department recognizes the issues associated with IDR plans and loan forgiveness. For this reason, it recently announced policy changes that will make student loan forgiveness more accessible to borrowers. These policy updates include:

  • Counting certain long-term forbearances toward IDR forgiveness: To account for previous instances of forbearance steering, the Education Department will make a one-time adjustment to retroactively count long-term forbearances toward forgiveness. This will include a 12-month limit for a single stretch of forbearance, and a 36-month limit for cumulative pauses.
  • Increasing oversight on service providers’ use of forbearance: In order to prevent future forbearance steering, the Education Department will work with the Consumer Financial Protection Bureau to monitor and regularly audit each loan provider’s use of forbearance.
  • Performing a one-time revision of IDR payments to remedy inaccuracies: Past documentation inaccuracies could prevent qualifying consumers from having their loans forgiven. To remedy these previous mistakes, the Federal Student Aid (FSA) will perform a one-time revision that will retroactively count any months in which borrowers made payments toward IDR.
  • Upheaving the IDR tracking system for better documentation: To permanently fix the IDR payment counting system and prevent future mistakes, the Federal Student Aid office (FSA) will begin displaying IDR payment counts on each consumer’s Student Aid account. This will simplify the counting and tracking process, while showing consumers exactly how close they are to loan forgiveness.

Do FFELP Loans Qualify?

Federal Family Education Loan Program (FFELP) student loans are privately owned but federally backed. Most loans taken out prior to 2010 are FFELP loans, though your service provider can help you determine which type of loan you have if you aren’t certain.

Though FFELP loans can benefit from these updates to student loan forgiveness, consumers must apply to consolidate any commercially held loans into a Direct Loan to qualify. If you want to take advantage of the new IDR fixes, you need to apply for loan consolidation by January 1, 2023.

Get Help With Your Student Debt

If you’re struggling with student debt, now is the time to take action! While it may feel intimidating to navigate all of the Education Department’s student loan policies, you don’t have to manage it all on your own. At OlsenDaines, it’s our goal to help eliminate the stress of debt so you can regain control over your finances. With over 40 years of experience serving Oregon residents, our debt relief attorneys know the intricacies of local and federal laws. We know what it takes to help you get the best outcomes possible, so you can get one step closer to a life without debt. To get help with debt relief, schedule your free legal consultation today!

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.