Bankruptcy, Is It Really Your Fault? Minneapolis MN Bankruptcy Lawyers Say NO!

Bankruptcy has many negative connotations and is often perceived by society to be a sign of one’s failure to manage one’s finances effectively. But this could not be farther from the truth when we take a careful look at many of the contributing factors which force individuals to turn to Minneapolis MN Bankruptcy Lawyers for financial relief. Many institutions and lenders have gone through great lengths to structure their agreements and contracts with consumers so that the lenders may profit greatly from potential hardships a consumer may unexpectedly face.

Establishments such as car dealerships, lending institutions and many other services people rely on regularly are often found to be nothing more than predatory lenders eagerly waiting for a consumer to fall into financial hardship so that they may impose hidden fees buried beneath legal and technical language often not clearly defined in their agreements with consumers nor clearly explained to them when these agreements were entered into by the consumer. They seek to seize financed assets to be sold off again to the next unsuspecting consumer in many cases. And it is important for someone who is considering bankruptcy to understand that it is not always their fault that they find themselves in financial hardship; many consumers are unsuspectingly set up to fail which in fact is a consideration of some lenders when the loan is made.

A Closer Look At The Role Of The Predatory Lender

Predatory lending is a loosely defined as the practice of lending specifically to individuals who are likely unable to follow the terms of the agreement entered upon. These agreements consumers enter into with establishments such as this often have very substantial costs associated with them once the consumer falls into default. These abusive and unfair terms are often buried under a great deal of technical and legal terminology within the contract and is not disclosed to the customer outright when the terms are originally presented to the borrower. Many of these organizations have no protocols for aiding a customer when the customer experiences financial hardship and this is because the institution truly has no desire to work with their customers but rather lure them into this debt trap so that they may profit from this hardship.

Profiting from consumer financial hardship is a booming industry with little legislation regulating the practice and it’s important for consumers to understand they may have been specifically targeted by businesses engaging in such practices. There are many ethical lenders out there eager to work with consumers and help them through unexpected financial hardships so they may find their way back to financial stability but it is important to be able to distinguish these groups from predatory or deceptive lenders. One should be cautious of any agreement which seeks to secure collateral such as property or investments. If you are considering hiring a Minneapolis MN Bankruptcy Attorney you may be thinking this warning is reaching you too late but if there is evidence this agreement in question was not properly disclosed to you one may have grounds to have the agreement voided or asset excluded. Securing assets is just one way creditors seek to profit from consumers, another very common tactic involves risk based pricing , a practice in which the rates of fees are set unfairly high for a consumer the lender has deemed to be a higher credit risk.

The Result Of Risk-Based Pricing

Risk-based pricing is often a very calculated move on the part of the creditor. Many creditors go through great lengths to find the best victims for such practices. Demographic data is used to determine locations with a high level of income and a low level of education. Lenders look for blue collar communities where many residents work within the labor and service industry and have steady disposable income with a low level of education such as a high school diploma or less. Some groups engage in such practices as targeting the elderly who in many cases have steady social security income or areas with a high concentration of immigrants unaware of the consequences involved with defaulting on the terms and less likely to question the inflated rates being offered to them.

Risk-based pricing is closely linked to the subprime housing crisis the United States faced not that long ago. The Emergency Economic Stabilization Act of 2008 came about from the mortgage industry’s mismanagement of risk-based debt in which they overextended themselves by lending heavily to unprepared and uninformed consumers. Many property assets fell into distress when borrowers found themselves in default and unable to recover, something the banking industry was ill prepared to address as their mortgage backed securities became their own burden rather than a means for them to extract revenue form the community as it had been for many years prior.

Bankruptcy, it’s not your fault!

When faced with financial hardship one may feel as though one is a failure in some way but in many instances this could not be farther from the truth. There is no shame in seeking financial relief through a highly reviewed Minneapolis Bankruptcy Lawyer as it is an established system put in place by Congress so that consumers have a means to get out from under their financial obligations and in many cases the legal actions being brought against them which prevent them from making their way back to financially stable footing once again. Many people faced with considering bankruptcy are in fact victims of creditors engaging in questionable business practices and it is important consumers understand they are not alone in their struggle and in no way a lesser person for seeking relief from such heavy burdens forced upon them.

Contact us today for your FREE, no-obligation Bankruptcy Consultation!