In our last blog post, we discussed the increasing number of debt settlement companies choosing to skirt the new regulations provided by the Federal Trade Commission (FTC) in September. Today, we will look at how these companies are bypassing the rules and taking advantage of unsuspecting consumers seeking debt relief services.
Debt settlement companies do not have the best reputations. Horror stories of consumers paying thousands of dollars while receiving no benefit from these companies run rampant. Still, progress was made in September, with the Federal Trade Commission (FTC) imposing new regulations on debt relief and consolidation companies. These rules sought to protect vulnerable consumers looking to avoid bankruptcy and relieve their mounting credit card debt.
The state of Florida experienced a 42 percent drop in foreclosure activity for the month of November. As promising as this might sound, the decrease was expected and does not signal an improvement for the housing market. Rather, the plummet is attributed to the cessation of foreclosures by some major banks after allegations of robo-signing.
In our last blog post, we looked at an analysis by the Associated Press (AP) that measured economic stress for states and counties across the nation. Its analysis for the month of October revealed that economic stress is down overall. However, elevated bankruptcy, foreclosure and unemployment rates continue to keep many areas, including Florida, economically stressed. Today, we will look at the factors that are impacting stress levels.
While some progress is being made in restoring our economy, Florida continues to face challenges. An Associated Press (AP) analysis of economic stress nationwide for the month of October shows that economic stress is down. However, some areas, including Florida, are still experiencing significant levels of stress, as demonstrated in its elevated bankruptcy and foreclosure rates.
There is a new trend in foreclosures. More homeowners are choosing to ditch their second homes when the property is worth less than the mortgage balance, even if they are still able to afford the payments. This is known as strategic default, in which a homeowner defaults on the mortgage for a vacation home or investment property, usually resulting in foreclosure.
By the end of the year, more than 1.6 million people are expected to have filed for bankruptcy protection in 2010. Many of these consumers have been financially devastated by the recession and chose to start fresh in the new year by filing for Chapter 7 bankruptcy. While filing for bankruptcy provides debtors with relief from worry and debt, it is important to keep in mind that there may be small challenges in life after bankruptcy.
Following the recession, the number of consumer bankruptcy filings in 2010 is at the highest level since the bankruptcy laws were reformed in 2005. However, recent trends show that bankruptcy filings are slowing.
In our last blog post, we discussed the United States Trustee Program's (USTP) increased scrutiny of foreclosure matters. We looked at two cases in which a trustee challenged banks' requests to have automatic foreclosure stays lifted despite the fact that they provided no evidence they were entitled to take such action. Today, we will continue to look at the controversial issue.
A new trend has emerged that has identified more elderly Americans struggling under the weight of credit card debt and medical bills, causing them to resort to bankruptcy in retirement. Recent statistical data has backed these findings up, reporting that Americans 65 and older who carry a balance on their credit cards owe an average of $10,235, up 26% from 2005. These older debtors who filed for bankruptcy owed a median of $22,562 to credit card companies. The study also revealed that while multiple factors, such as health problems and medical debts, contribute to elders' financial stress, the dominant force appears to be the overwhelming burden of credit cards. From 1991 to 2007, the rate of personal bankruptcy filings among those ages 65 or older soared by 150%, according to AARP. At the time, the biggest jump in bankruptcy filings occurred among people aged 75 to 84. Their rate skyrocketed 433%.
Following the recent foreclosure scandals, many banks halted the evictions of borrowers while reviewing their foreclosure procedures and fixing flaws in their documentation procedures. However, most of the largest banks have resumed evictions again. While they claim to have tightened up procedures, one major concern remains. Do these banks have legal standing to foreclose?