Holiday season throws spotlight on need for debt relief

Personal finance is a topic few people want to think about during the holiday season, but it can literally pay off to be money-conscious this time of year. Still, with all the stress of the season, dealing with credit card debt and other forms of debt can seem overwhelming. When accounts go to collections and debt collectors are added to the mix, the results can be extremely unsettling.

One way out of this type of situation is to consider personal bankruptcy, such as Chapter 7 or Chapter 13 bankruptcy. Not only can these legal avenues relieve a Mississippi resident of his or her dischargeable debts, but they can also take away the responsibility of dealing with debt collectors. When a person files for Chapter 7 or Chapter 13, debt collectors must now deal with an experienced attorney rather than with a person struggling with medical bills, personal loans and holiday credit card debt.

This benefit of personal bankruptcy is a huge one, as debt collectors can have a hugely negative impact on a person and his or her family. While there are many laws and regulations in place regarding what collectors can and cannot do, that is no guarantee that collectors are always on their best behavior. Since the financial chaos of 2007, the debt collection industry has exploded, sometimes using illegal or questionable tactics. For example, a recent Federal District Court settlement involves an award of nearly $60 million going to consumers who were victimized by a debt racket; one company named in the suit lied and claimed individuals had been served notice of lawsuits - the company could then win default judgments against those individuals.

Debt collection companies that make false claims in court can essentially ruin people's lives: they can secure default judgments against debtors, they can garnish wages, freeze bank accounts and ruin credit scores. With a severely-damaged credit score, especially one that a person doesn't know about, job opportunities and even the ability to rent an apartment can diminish.

It can be extremely helpful to be proactive in dealing with debt collectors - whether the collectors are following the law or not. A skilled Southaven bankruptcy attorney can take away the burden of dealing with collectors altogether from residents struggling with the need for debt relief.

Source: The Nation, "How debt collectors ruin lives," Michelle Chen, Dec. 2, 2015

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