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Last year was tough for Florida residents. The state saw a dramatic increase in foreclosures and bankruptcy filings, and home values continued to plummet. Unemployment has remained high during the beginning of 2011, and individuals are struggling to keep up with their debt. Unfortunately, because of the economic conditions, many Florida consumers are realizing that they are in a financial crisis. Whether they have lost a job or have been unable to refinance their home in order to consolidate debt, consumers are under pressure to try to continue to make on-time payments for debts they can no longer afford.

As consumers face possible foreclosure for not paying their mortgage payments on-time, many individuals have chosen to let other expenses slide in order to protect their homes. Some have even relied on credit cards to finance their cost of living. Consumers begin to make poor financial decisions because they feel helpless and are not aware of other solutions to their debt problems.

The decision to default on debt can bring on a series of other problems. When payments become delinquent, the account is turned into collections. Collection agencies and creditors begin contacting account holders to remind them of their delinquency, and the reminders can turn into harassment. Creditors will call every day and will try to contact consumers at all hours. They will send demanding letters and may even threaten to sue delinquent account holders. Although many practices by collection agencies may be unethical and more annoying than anything, consumers may only make the problem worse by not trying to resolve the issue right away.

Creditors can sue individuals for debts they owe, but only within a certain period of time. Depending on what state you live in, this period of time ranges between three to 15 years from the last payment made. Letting accounts go into collection also damages the consumer’s credit score and will appear on a credit report for seven years. Many individuals become confused by what they should pay when they can’t afford their debt, but what they should focus on is how to resolve the issue. Maybe creditors will work out an affordable payment plan, or maybe the individual should consider bankruptcy.

Bankruptcy attorneys assist clients by evaluating their expenses and income in order to come up with a payment plan or solution to eliminate certain debts so that the consumer can get back on their feet. Attorneys in Florida have helped thousands of clients save their homes and other assets in bankruptcy by restructuring their debt so that the monthly payments are once again affordable. Don’t let debt get out of control to the point where you are experiencing harassing calls from creditors threatening to sue you. There are other solutions to resolving your financial crisis.

Source

Fox Business: “Can Creditors Sue You?” Odysseas Papadimitriou, 31 Jan. 2011

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