Some people in Texas may find themselves deeper in debt once the holiday season has come to an end. According to a survey by CreditCards.com, just over half of consumers who are already in debt said they would be willing to go into further credit card debt for the holidays. Those who do not carry any debt are more reluctant with just one-quarter saying they would take on debt for the holidays.
Some people in Texas might be among the millions of Americas who are struggling with debt, but they have rights when they talk to debt collectors. According to the Fair Debt Collection Practices Act of 2010, there are only certain hours when debt collectors can call people and a certain number of times they can make the calls. Consumers may be able to file a complaint or a lawsuit if these rules are violated.
Bill collectors in Texas and around the country must abide by the provisions of the Fair Debt Collection Practices Act, but many of them do not. The 1977 law strictly prohibits harassment, but individuals struggling with overwhelming debts often receive calls from collection agencies on a daily basis and at inconvenient hours. Bill collectors are not permitted to publicize debts and must cease calling workplaces when asked to do so, but these rules are also widely flouted.
The latest report about bankruptcy filings produced by Supreme Court Chief Justice John Roberts indicated that filings have reached their lowest number since 2010. Prior to 2010, consumers had sought bankruptcy protection in increasing numbers due to the financial collapse of 2007 and 2008. Although debts remain a concern for many people in Texas, multiple economic forces appear to be reducing the caseloads at bankruptcy courts.
Military veterans make up about 10% of the population in Texas and around the country, and about 1 in 4 receive disability benefits from the Veterans Benefits Administration. Disability benefits paid by the Social Security Administration are protected from creditors during a personal bankruptcy, but bankruptcy judges ruled in five recent cases that Veterans Affairs benefits were not, meaning that disabled veterans were required to include their VA benefits in their disposable income disclosure paperwork.
Those who file for bankruptcy in Texas will likely notice that the filing is listed on their credit reports. How long it stays on a credit report depends on what type of protection an individual sought. If a person filed for Chapter 7 bankruptcy, it will stay on that individual's credit report for up to a decade. A Chapter 13 bankruptcy only stays on a credit report for seven years.
An increasing number of older people in Texas and across the country are filing for bankruptcy. There are a number of factors contributing to the problem of people facing severe economic crisis after they reach retirement age. While in 1991, only 2% of all bankruptcy claims were made by elders, that figure has now reached 12%. Personal bankruptcy can provide relief from most types of debt, but it does exclude some major obligations, including student loans and certain taxes. In many cases, elders may accumulate student loan debt as co-signers for younger relatives.
Those who need help getting their finances in order could do so by filing for bankruptcy. In most cases, a debtor in Texas or any other state will file for either Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy is for those who have unsecured debts and make less than the median income in their state. It generally takes about three to six months to have debts discharged.
While some Texas millennials might be burdened by student loans, far more are likely to carry credit card debt. According to a report from CompareCards.com, only 37% of millennials around the country said they had student loan debt compared to 67% who had credit card debt.
Personal beliefs often motivate people in Texas to avoid bankruptcy even if the struggle to pay debts becomes overwhelming. However, bankruptcy can be a positive decision that gives applicants a second chance. The process could include financial counseling that helps people eliminate bad money habits and avoid debt in the future.