Written by Canterbury Law Group

How to Handle Debt and Other Financial Problems in 2018

A brand new year is here, bringing with it exciting new possibilities. Some possibilities in 2018, however, will not be exciting for some Arizona households. According to a recent study published by TransUnion, a credit reporting agency, consumer credit card debt will increase this year for the fifth consecutive time. Earlier this year, the amount of credit card debt American households owned reached a whopping $1 trillion. By next year, market research shows that many households would significantly struggle to pay off that debt.

Despite a strong economy, American households continue to amass debt. Credit cards are not the only culprit. A significant number of households are indebted due to unsecured loans like payday loans. This is in addition to typical loans like a home mortgage and student loans. While 2018 may be a good year in economic terms, it will also be a year many Arizonian households and individuals grapple with debt. Here are several debt management tips to keep in mind:

Avoid Taking on New Debt

Remember that any money you borrowed for the holidays will have to be paid off this year. If you are already in debt, it’s not a good idea to take on even more debt. Use your income or savings for holiday activities like parties and vacations and avoid borrowing more money overall. Control your spending habits right now to start reducing your debt gradually this year.

Talk to a Lawyer Regarding a Debt Relief Strategy

If the debts have piled up high already, the creditor may start suing you next year. Therefore, consult with a bankruptcy lawyer in Scottsdale to formulate a strategy to get rid of at least some of that debt. You can consider filing for bankruptcy if you find yourself literally unable to make payments. Chapter 7 bankruptcy allows judges to discharge certain forms of unsecured debt, like credit card debt and payday loans. Ask a lawyer whether filing for bankruptcy would make financial sense in the coming year.

Negotiate with Creditors

If there are creditors calling, demanding that you pay back a loan, there are several options you can consider here. First, if the creditor is abusive and is subjecting you to harassment, you could consider taking legal action against creditor harassment. If the creditor’s communication tactics are legitimate, you can try negotiating. Creditors prefer to have their loans paid back at least partially than to have a bankruptcy court discharge the debt. Therefore, if you are unable to meet due payments, try to negotiate the interest rate or request an extension. Your lawyer may be able to assist.

Last but not least, save for emergencies. The start of the year is a great time to open a new savings account. When you have money saved for tough times, it will eliminate the need to take on personal loans or use expensive credit cards.

Written by Canterbury Law Group

How to Sue an Abusive Creditor in Arizona

If you are in debt, it’s not uncommon to experience constant creditor collection calls. However, some debtors experience serious creditor harassment and abuse. Some creditors can threaten debtors, verbally abuse them, deploy scare tactics like fake court orders, or demand unseemly favors in return for not paying the debt. The laws in Arizona protect debtors from such abusive behavior from creditors.

How the Law Protects Arizona Debtors

Creditors in Arizona are subject to the Fair Debt Collection Practices Act (FDCPA). It is a federal law that protects debtors from abusive creditors and collection practices. Under Arizona state law, creditors and collectors are also prohibited from engaging in specific types of intrusive, abusive and deceptive debt collection practices. Unlike the federal law, the state law is a criminal statute. That means if you are a victim of any prohibited practices, the collection agency may be deemed liable.

The debtor can directly or indirectly sue an abusive creditor. Because this falls under criminal law in Arizona, the victim cannot directly sue the abuser for breaking the law. That is up to the state government. If you have experienced abusive debt collection practices, you can report it to a local county or city prosecutor who will potentially charge the creditor with a class 1 misdemeanor. However, as a victim, you can still sue the abusive debt collector for monetary damages under the FDCPA mentioned above. You will need assistance from a bankruptcy lawyer in Scottsdale who will be very familiar with this provision of the federal laws.

Debt Collection Practices Prohibited Under Arizona Law

Before you report or sue a creditor, you must know exactly what debt collection practices are prohibited under the law. Your creditor can still call you on a daily basis without the practice necessarily being considered abusive. Here is what the law prohibits:

  • Pretending to be a legal authority or a law enforcement agency in order to collect a debt
  • Sending any documents or written communication that imitates a court, government, or a legal document
  • Pretending to be a lawyer or have a law office without being a licensed attorney in the state
  • Attempting to collect fees that are not related to the debt, such as collection fees, legal fees, court fees, and so on
  • Tell you that if you don’t pay the debt, you will have to pay additional fees for investigations, services, lawyers or anything else
  • Lying to you about the amount of existing debt
  • Giving the impression that any lawful or government agency in Arizona backs the creditor
  • Use verbally abusive language in collection calls
  • Continue to contact you after you have sent a written request not to

Some other abusive practices, such as physical threats, are also prohibited. Contact your lawyer if you don’t see the tactics that are being used against you by a collection agency in the above list.

It’s important to keep in mind that suing the creditor for illegal collection practices does not “erase” the debt. You will have to go to bankruptcy court to have at least some of your debt forgiven.