Pennsylvania residents considering or undergoing a bankruptcy might wonder how a discharged debt might affect their lives. There might be concerns about how a discharged debt might affect the debtor's employment or if a debtor can or must pay back a discharged debt.
Pennsylvania residents may not have heard about the recent recommendations from the Federal Trade Commission about ads in newspapers, telephone directories and magazines discussing the consolidation of debt. According to the FTC, consumer debt is at an all-time high and individuals should use caution when a seemingly quick fix is offered in a publication. Many companies offer the assurance of debt relief; however, often the bankruptcy option is recommended, which can cause a long-term negative impact on a person's credit history and stays on a credit report for 10 years. This can result in difficulty being able to get insurance, housing, credit and even a job for years to come.
Pennsylvania businesses considering filing for business bankruptcy often have concerns regarding what will happen to the business if they choose to file for bankruptcy. The outcome of the bankruptcy will depend on the chapter under which the business files its bankruptcy.
Pennsylvania parents may find it prudent to provide for the emergency needs of a child going away to college by means of credit cards. However, it is important to recognize that the conditions of such a card could create problems for any party involved in its management or use. A bankruptcy on the part of one party, for example, could lead to collection action against another.
Many people in Pennsylvania may be receiving calls from debt collection agencies if they have fallen behind on their payments. It might be beneficial for these individuals to know that they are protected under federal law. The Fair Debt Collection Practices Act, which is enforced by the Federal Trade Commission, limits the types of actions that a collector might take while pursuing an outstanding debt.
For Pennsylvania debtors, the statute of limitations on unpaid credit card debt may come as a welcome relief. Statutes of limitations prevent debt collectors from filing civil lawsuits against a debtor beyond the time period set forth therein. Debtors should be aware, however, that the statute of limitations does not prevent the creditor from seeking to collect on the debt in other ways.
Pennsylvania residents may be surprised to learn that the Internal Revenue Service considers forgiven or cancelled debt to be income. Consumers who reach agreements with creditors to lower the amount they owe are often surprised when they subsequently receive a cancellation of debt notice from the IRS. The agency learns about the arrangement because creditors are required to notify them when an outstanding balance is reduced by $600 or more due to debt forgiveness or cancellation.
Pennsylvania residents who are faced with overwhelming consumer or medical debt may sometimes consider filing for bankruptcy as a method of obtaining some relief from these obligations. The ultimate goal is to obtain a discharge from the bankruptcy court, as the effect of a discharge releases the filer from personal liability from some of these debts. The affected creditors are also prohibited from further communications with the debtor and from instituting or continuing any form of collection activity with respect to those obligations.
Pennsylvania readers might be interested to learn that, according to ProPublica and National Public Radio, 10 percent of working people in the U.S. aged 35 to 44 are subject to wage garnishment. Many of the garnishments are because of student loans, medical or credit card debt.
Many Americans struggle with debt, especially credit card debt. For some, unchecked spending combined with the high interest and fees associated with credit cards can lead to financial pressure and anxiety. Pennsylvania residents are not immune to this situation, and anyone struggling with credit cards may benefit from strategically pay down credit card debt as soon as possible.