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Montgomery County PA, Bankruptcy Blog

Some homeowners in foreclosure might not need to be there

When the Great Recession hit back in 2008, the housing market in Montgomery County and across the nation took a nosedive. Many homeowners found that they owed more on their house than it was worth. That meant that if “underwater” homeowners lost their jobs or encountered health problems or other difficulties with serious financial implications, they could not sell their homes or get refinancing from the bank. For many, that meant they faced foreclosure.

However, an online mortgage research company recently revealed an interesting fact: the percentage of homeowners in foreclosure who have positive equity in their properties is on the rise. In fact, 35 percent of foreclosures now involve properties with positive equity.

Going through a divorce? Who will get the student loan debt?

For many Pennsylvania residents, divorce is not only a difficult emotional time but also a trying financial time. When couples split one financial house into two, they often find there is not quite enough to go around. It is generally more expensive to live as a single than as one-half of a couple. Part of the issue is that divorce results in a complex division of debts. Many couples have shared liabilities, such as mortgages, as well as personal debt they brought into the marriage, such as student loans.

It can be very difficult to deal with student loans during divorce. This is because this debt is typically just in one spouse's name, but it has been deeply intertwined between both spouses.

Can inherited IRAs be shielded in bankruptcy?

A person can inherit just about anything, and while that isn't about to change, the U.S. Supreme Court is considering whether or not an inherited individual retirement account qualifies as a retirement plan for the heir.

The case could have profound implications for Montgomery County residents contemplating Chapter 7 bankruptcy.

You won't believe what 40 minutes of no medical care can cost

One of the best pieces of investigative journalism we have seen in recent days wasn't in a paper you can pick up at a Pottstown newsstand. Of course, because we're all wired, the Tampa Bay Times story is available wherever you happen to be.

The in-depth article gives readers a look inside the astronomical costs of trauma care in this country. It helps clear any confusion anyone might have over one of the leading causes of bankruptcy in this country: medical bills.

The damage done to financial health by massive medical bills

It’s not as if people who have been injured or are ill don’t have enough to worry about. But doctors, hospitals and insurers sometimes behave as if they’re doing all they can to complicate the patient’s life with codes, acronyms and cryptic language on medical bills and insurance statements.

A doctor who lives not far from Montgomery County wrote recently about her own struggles to understand how much she owes when she gets a bill from her insurer or from a hospital or physician. She noted that while most people understand that it takes time and patience to deal with medical bills, what many don’t realize is that failure to promptly pay medical expenses can harm a person’s credit rating and financial health.

Americans taking on more debt

Living with debt is not something many people choose. Rather, many Americans take on debt out of necessity. Many people accumulate debt from credit cards and medical bills. In many cases, medical bills contribute to people taking on more credit card debt to try and pay for medical bills. This unrelenting cycle can lead to high debt levels that are difficult to repay.

Debt levels have increased across the country, and many Pottstown residents would also say they've taken on more debt in the last few years. The Federal Reserve Bank of New York reported that consumer debt levels continue to increase, which could lead to financial trouble for many households who cannot pay down their debt.

Checking on credit scores

When was the last time you checked your credit score? According to the director of the Consumer Financial Protection Bureau, fewer than one in five Americans check their credit report in a given year.

Failure to check that score can lead to problems, as many Pottstown residents can attest. Credit card debt is one of the leading contributors to financial difficulties that can lead to Chapter 7 bankruptcy.

How medical debt can lower a credit score

When you are extremely ill or have been in an accident, do you ask the physicians treating you how much everything will cost? Do you decline some services because you know you can't afford them? Most people in Pottstown would think that is crazy -- if you need medical care get it and worry about the costs later. Sadly, that is easier said than done, even for people with health insurance. The cost of health care is rising and there are a number of people in Pennsylvania who are accruing medical debt that they are not sure they can pay.

The truly unfortunate part of all of this is the damage unpaid medical debt can have on a credit score. A low credit score comes with a host of problems, as well. Low credit scores could make it very difficult to rent or buy a home. They could also make it impossible to get a credit card. There are, however, options to mitigate some of damage done by a low credit score.

Should you stop paying debts or file Pennsylvania bankruptcy?

What do you do about extreme debt? You're stuck in a slippery financial pit and it's all come down to two choices - file bankruptcy or let the chips fall where they may and do nothing. While permanently disconnecting from debt collectors sounds tempting, running from debt problems doesn't make them go away. It usually makes them worse.

It may feel like you're the only person in Pottstown with out-of-control credit card bills and a mortgage headed for foreclosure, but you're not. About 1.3 million U.S. residents, including some of your Montgomery County neighbors, sought bankruptcy protection last year.

Ways Pennsylvania homeowners slow or stop foreclosure

Montgomery County homeowners sometimes struggle to stay current with mortgage payments. When you fail to make a payment for a few months, the lender will send a letter threatening foreclosure. Unless you're able to bring the payments up to speed, modify the mortgage or refinance the loan, a legal complaint is filed and a house auction is scheduled.

Bankruptcy can interrupt foreclosure, provided action is taken prior to the sale of the property. A bankruptcy court will issue an automatic stay, which protects you from creditor harassment through the bankruptcy process.

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Pottstown, PA 19464
610-323-5300
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