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Baltimore Consumer Protection Law Blog

Maryland residents, watch out for zombie debt!

Being in debt is a major concern for most Americans, whether in Maryland or elsewhere. While many of us have straightforward financial lives, it is possible that we face the inability to pay off some debts. Where this doesn't happen, debt collectors step in and try to force the clearance of the debt. Now, however, there seems to be a whole new way debtors can be troubled by debt they were unable to pay.

Debt collection tended to revolve around getting debtors to repay credit card debts in the early days of the economic recession. Today, collectors have expanded their territory and are now collecting even mortgages, medical debts and vehicle loans. The fact that such debts may have been written off by the actual lender has led to experts calling these 'reawakened' obligations "zombie debts." The debtor may have made a fresh start assuming that the company he owed money had canceled the debt, but suddenly, a new debt collector comes calling and demands repayment.

Medical expenses for breast cancer treatment leave many in debt

The cost of medical care has undoubtedly increased over the years, irrespective of the kind of care required. However, not all Americans, whether in Baltimore, Maryland or elsewhere, are able to pay for surgery or some other procedure without incurring debt. As a result, an ever-growing number of people today fall into the medical debt pit, often without knowing how their medical expenses escalated to such a degree. In cases where treatment involves a repeated procedure, the likeliness of racking up medical debt is only higher.

A recent survey reported in the Journal of Clinical Oncology examined the financial condition of breast cancer patients after treatment. One survey observation was that 12 percent of the women surveyed were still paying off medical debt four years after treatment. Also, about 25 percent felt their financial health had declined over that same time period due to the cost of their cancer treatment. Additionally women of color and older women responded they were more likely to skip treatment due to cost or had lost property due to medical debt incurred from breast cancer treatment.

Foreclosure looming for unemployed Maryland residents

Ever since the economic downturn began in 2008, many Americans, including those in Maryland, have been struggling with job-related uncertainties while worrying about escalating debt and mortgage payments. Federal aid programs and unemployment benefits provided some measure of relief, but much of that assistance has since disappeared. Many people now face possible foreclosure on their homes because they are unable to continue paying their mortgages.

One resident of District Heights who has been unemployed since July of 2013 found herself at risk after Congress failed last December to continue unemployment benefits. The woman and her daughter moved into their suburban Washington townhouse in 2010. Like her, millions of people might have jobs but still face foreclosure because they have defaulted on their mortgage payments. Adding to their woes is a lack of funding options; even a federal loan program aimed at providing relief to unemployed homeowners was not renewed.

No easy way out of debt for Americans

For many years, it seems that "debt" has been a buzzword in almost every Maryland family-oriented conversation. Every taxpayer on the eastern seaboard is struggling with one or more kinds of debt, so much so that eliminating this debt is a widespread concern. However, a simple method of escaping the clutches of debt may not exist, as one woman's experience reveals.

This woman found that six years ago, her family owed more than $125,000. She began a debt reduction plan and has been documenting the progress made in clearing that debt ever since. The family changed its lifestyle drastically, forgoing such pleasures as eating out and, at one point, even having meat on the family table. Other sacrifices included shopping for clothes and disconnecting the telephone. She contacted the utility company to lower monthly payments, opting for a "poverty package" and cancelled the cable subscription altogether.

Maryland mortgage payments may rise by up to $1,174

Maryland homeowners were among the hundreds of thousands across the nation affected by the subprime mortgage crisis of 2008. Fortunately, some federal programs helped many homeowners avoid foreclosure. One of these programs, the Home Affordable Modification Program, has helped lower mortgage payments over the past five years. That will change this year, and mortgage interest rates are expected to rise again. For homeowners still enrolled in the program, this could mean payment increases of up to $1,174.

HAMP was launched in 2009 to lower mortgage interest rates for qualifying homeowners to as low as 2 percent for up to five years, ensuring that these borrowers did not have to spend more than 31 percent of monthly wages on mortgage payments. These rates were set to rise by nearly one percentage point per year after five years in order to eventually match the actual 30-year mortgage rate.

AHA requests special treatment for medical expenses debt

In Baltimore, Maryland, there are many people who struggle with debt. Although the debt situation has been improving in the state over the past few years, there are still many who struggle. As a result, many individuals face creditor harassment.

Recently, the Consumer Financial Protection Bureau issued an Advance Notice of Proposed Rulemaking for debt collectors in the United States. In response to the notice, the American Hospital Association urged the CFPB to treat medical debt as separate from other consumer debts. The AHA recently submitted a letter to the CFPB voicing their concern.

Maryland groups seek six-month suspension of home foreclosures

For many families in Baltimore, Maryland, owning a home is a life-long dream. Since the beginning of the economic slowdown a few years ago, many homeowners fell behind on mortgage payments, turning their dream into a nightmare. Although the economy has shown signs of improvement in recent months, the monetary problems still facing many Maryland residents are far from over.

Recently, two Maryland civil rights groups urged state lawmakers to impose a six-month suspension on foreclosure proceedings. However, bankers and the state administration are stressing the point that assistance is already available for struggling homeowners and that the housing market will only improve once the problem of delinquent mortgages is addressed.

Consumer bankruptcy rates expected to decline in coming years

Residents of Baltimore, who are either in the middle of a financial crisis or are recovering from one, would be glad to hear that bankruptcy filings in the United States have steadily declined over the past four years. This is positive news for many people in Maryland who had contemplated filing for bankruptcy at some point after the financial meltdown of late-2008.

A recent report published by Fitch Ratings states that in 2013, the debt situation in the U.S. improved compared with the previous year and consumer bankruptcy filings saw a decline of 12.6 percent. It is also expected that the number of filings in 2014 will witness an additional decline of 8-10 percent compared with 2013.

Medical debt number one reason why families file for bankruptcy

Anyone who struggles with medical debt is not alone. It is an increasingly common problem in Maryland and the rest of the United States. Anyone who is stuck with a plethora of medical expenses knows that accruing medical debt can happen quickly. It can also happen indiscriminately. Anyone, regardless of their career or income bracket, can fall into a quagmire of debt. For those who are bombarded by creditor harassment and seemingly stuck in debt cycles, there are options.

To prove the point that anyone can fall into debt, one needs to simply look to statistics recently announced by the Center for Disease Control and Prevention's National Center for Health Statistics. This new data revealed that one in four families experienced difficulty in paying their medical bills in 2012. In fact, medical debt is, according to the reports, the number one reason why Americans file for personal bankruptcy.

Credit Card debt increase after holidays

Many Maryland residents are likely settling into the New Year. The holiday season is slipping further and further into the past and many are looking ahead and planning for the future. Not everyone is able to do this, unfortunately. Those who are stuck with debt may find it difficult to move forward in their lives, as creditor harassment and debt cycles keep them stuck in the past.

An increasingly high number of Americans are caught in debt cycles following the holiday season, according to reports. The Federal Reserve recently reported the largest increase in 10 months in consumer borrowing. In December, borrowing grew $18.8 billion. Auto and student loans account for the highest rise - a $13.8 billion increase, to be exact.

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