As consumers, we spend billions of dollars each year on goods and services, both online and in traditional stores. An increasing number of those purchases are made with some type of credit. As debt has increased, the need to protect consumers against credit fraud and unfair or deceptive trade practices has also increased. The Federal Trade Commission (FTC) is the federal agency that enforces consumer protection laws. Below are descriptions of the three most well known consumer protection laws and details about how each one is designed to protect you against unfair creditor practices.

Almost all of us will experience debt problems at some point during our lifetime due to a financial crisis such as a job loss or due to our own devices. Some individuals cause debt problems for themselves through poor spending habits, abuse of credit cards, gambling, co-signing loans for others or because of a failure to budget and manage money well. Because they feel their debt problems are due to something they did or failed to do, they may wonder, “Is personal bankruptcy a good option for me?”

According to a study conducted by NerdWallet Health, over twenty percent of Americans will struggle with medical debt this year. For some, the best alternative is to file bankruptcy. Medical bills have been an ongoing financial problem for many Americans for more than a decade. In 2009, more than 60% of individuals who filed for bankruptcy relief did so due to medical bills. According to a report published in the American Journal of Medicine, the number of individuals who had to file bankruptcy due to medical bills rose from 46% in 2001 to 62% in 2007.

If you are struggling with debt, you are not alone. Many Americans face this situation every day due to job loss, loss of a spouse, medical illness or other circumstances that prevent them from paying their bills. Whatever your situation may be, it is important that you understand that there are options available to help you manage this burden and recover financially and emotionally. One possible solution for dealing with debt is debt consolidation. Debt consolidation can help individuals who are struggling to make minimum monthly payments on their credit cards or other debts. However, in some cases, debt consolidation could create more problems than it solves. While it may seem practical to consolidate debts into one, lower monthly payment, you must first consider the pros and cons to debt consolidation.

Divorce is one of the top 5 reasons many debtors turn to bankruptcy. If you are going through this situation, know that you are not alone. The following is one woman’s story about how divorce and bankruptcy turned her life around, in ways she could never have expected.

Few things in life are of greater consequence to one’s physical and emotional well-being than financial hardship. Many individuals facing harassment from creditors have enough of an income to begin allocating toward their debts, but not enough to keep up and prevent the seizure of their assets. Many debtors turn to bankruptcy to find a fresh beginning.

Learning to manage money is a life skill everyone should possess, though it rarely gets taught in any formal educational setting. Money management skills are valuable to own at every stage in life, especially when trying to manage debt.

If you are in debt and looking for a way to get out, consider ALL of your options. When all of your options are on the table, take time to think through the advantages and disadvantages of each and how they will affect your life in the long run. Sit down with a legal professional, too, to discuss your options and get advice and opinions about which is best for your specific situation. 

The effects of filing bankruptcy are felt almost instantly. The moment you decide to file bankruptcy you will likely feel some of the stress fade because you know the end of your financial nightmare is in sight. Once your petition is approved, you can begin the journey to debt freedom, feeling lighter and happier than you have felt in a long time. Put the nightmare behind you and begin living the life you have been dreaming of.

Becoming debt free can be done in 120 days or less if you file a Chapter 7 bankruptcy in Minnesota. To ensure the process is completed in three-four months, work with a bankruptcy attorney. A bankruptcy attorney will be your guide through the legal jargon, court meetings and mountains of paperwork, ensuring you complete all steps accurately and in a timely manner.

You cannot and should not borrow your way out of debt, especially if you are currently not able to manage your debt. Doing so will result in extended payment plans, and, in the end, you will be deeper in debt than when you started. This is precisely the foundation that debt consolidation programs are built on. By extending your debt timeline you will pay more money; that money then gets paid to the debt consolidation company you “hire” to help you manage your debt.

Chapter 13 bankruptcy, also called a “wage-earners” bankruptcy, is essentially a repayment plan based on what you can afford. It allows you to prioritize your debt and make payments based on your income. This plan is best for those who are experiencing a temporary setback and need some time and space to breathe, in order to get their financial situation under control.

Overview of Debt Settlement Programs

The third blog in our debt consolidation solutions series focuses on debt settlement programs. It functions by halting all payments you are making to creditors and requires you to close your accounts. Instead, you will make monthly payments (usually lower than your current payments) to a trust account. When that account has built up enough to pay off your debt in full, the debt settlement program company will begin negotiations with your creditors. They will also attempt to negotiate a lower debt amount by offering to make a lump sum payment.

Debt consolidation can be a very confusing concept because financial terminology is complicated and contracts can be very convoluted. The term itself, debt consolidation, is confusing because it can be used to describe a group of debt solutions or as an individual option. For simplification purposes we are going to use the term ‘debt consolidation’ to describe the general concept of combining multiple unsecured debts into one.

Credit card companies are in business to make money and we make it very easy for them to be profitable. Credit cards fulfill our need for instant gratification. It is very easy to spend money on a credit card because there is no physical exchange of cash and you are not expected to pay at the time of transaction. This process plays upon humans’ need for instant gratification.