Congress to vote on student loan bankruptcy relief

Maryland residents who are struggling to make ends meet due to overwhelming student loan debt currently have few options, but their situations could soon change if a bill introduced recently in both the House of Representatives and U.S. Senate garners enough support to pass. The bicameral bill, which has been named the Student Borrower Bankruptcy Relief Act of 2019, would change the Bankruptcy Code by eliminating the provision that makes student loans non-dischargeable.

The bill faces an uphill battle and will need bipartisan support as it is opposed by trade groups such as the Consumer Bankers Association. A CBA representative said that the bill's passage would make matters worse for students and taxpayers because more student loans would be discharged and new loans would be more difficult to obtain and more expensive. However, the bill is not without supporters. The Center for Responsible Lending, the National Consumer Law Center, and Americans for Financial Reform have all come out in support of the legislation.

Bankruptcy may be easier to handle in time

If a Maryland resident filed for bankruptcy nine years ago, that bankruptcy will generally have little impact on his or her credit score or history. However, if that bankruptcy was filed just a year ago, it could have a significant impact on that person's credit score and history. It is important to note that individuals who file for bankruptcy may not experience negative consequences after doing so.

In some cases, a credit score can actually go up after seeking protection from creditors. This is because a person can have many debts discharged after doing so. Since these debts no longer appear on a credit report, a credit card company or other lender may see that person as creditworthy. Of course, the bankruptcy itself will remain on a credit report for up to 10 years. A Chapter 13 bankruptcy remains on a credit report for seven years.

Chapter 7 versus Chapter 13 bankruptcy: What's the difference?

When it comes to serious financial problems, it's a good idea to try to stay calm and explore all available options to get things back on track. The good news is that most financial crises are temporary. However, it's also true that a solution that works for one Maryland resident might not even be a viable option for another. No two financial situations are exactly the same.

It's important to know where to seek support if you're facing financial problems that you feel ill-equipped to handle on your own. Contrary to the stigma that often exists, bankruptcy is often a good choice to obtain immediate debt relief and lay the groundwork for a stronger financial future. Chapter 7 and Chapter 13 are the most common types. You must be eligible to apply, so it pays to learn as much as you can about each program to determine which one best fits your needs.

Debtors are protected by the FDCPA

The actions that debt collectors in Maryland can and cannot take are governed by the Fair Debt Collection Practices Act, or FDCPA. While debt collectors are allowed to contact individuals about a valid debt, those who are contacted have a right to verify what the debt collector is saying. If a person makes a request to verify a debt balance, verification must be provided in writing. Collection agencies are also generally barred from making contact before 8 a.m. or after 9 p.m.

Furthermore, they cannot contact an individual about a debt at their place of employment. If an individual requests that a debt collector put a stop to collection calls or letters, the entity attempting to collect a debt must comply. It is also a violation of the FDCPA to contact a family member other than a spouse or a friend about a debt.

Out-of-network medical bills are worryingly common in Maryland

A recent study conducted by the Health Care Cost Institute reveals that one in five hospital patients in Maryland who received treatment at an in-network medical facility were sent an unexpected bill for out-of-network treatment or services. After analyzing almost 620,000 in-network admissions from hospitals in 37 states and the District of Columbia, only New Jersey, California, Kansas and Florida had a higher frequency of out-of-network charges.

The results of the HCCI study suggest that patients are frequently billed for out-of-network treatment despite taking steps to ensure that their doctors and hospitals are in-network and covered by their health insurance policies. The researchers behind the study say that this is because patients have no way of finding out whether or not the doctors who will be treating them and the laboratories that will be used for medical testing are in their networks.

When is bankruptcy the most appropriate option?

You certainly know that bankruptcy is an option for debt relief, and you may have even considered taking this step to find some breathing room in your financial struggles. What has held you back? Was it the stigma of filing for bankruptcy? Was it the hit on your credit score? Perhaps you simply didn't understand what bankruptcy could do for you.

Filing for bankruptcy is not always the answer to overwhelming debt. In many circumstances, you may have other options, including negotiating with your creditors. Trying every legitimate alternative first is often a wise course of action before diving into bankruptcy. However, there are some times when uptcy is appropriate.

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