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The automatic stay in personal bankruptcy

When Virginia residents file Chapter 7 or Chapter 13 personal bankruptcy petitions, an injunction known as an automatic stay is issued. This injunction is designed to give individuals the time they need to put their financial affairs in order, and it places strict limits on creditors. While the automatic stay is in force, efforts to repossess assets or garnish paychecks must be abandoned, and attempts to collect unpaid debts must cease. Creditors who willfully ignore these rules may be ordered to pay punitive as well as compensatory damages.

Debt and interest rates to rise in 2018

Americans spend about 10 percent of their monthly income on debts such as auto loans and credit cards. While that may not be a dangerous level for most people, it is a good idea for Virginia residents to know where that debt is going. As a general rule, student and auto loans are easier to manage compared to credit card debt because of the difference in interest charged.

Credit card debt could become costlier

Many people in Virginia and across the country are struggling with overwhelming debt, especially as credit card fees and interest rates mount. In March of 2018, the U.S. Federal Reserve announced an increase in the federal funds interest rate from 1.5 percent to 1.75 percent. Even though this rate is not a consumer rate and reflects a bank-to-bank lending rate, it is used as a benchmark for consumer loans, credit accounts and even savings accounts. An increase in the federal funds rate means that interest rates on consumer debt rise as well.

How does bankruptcy affect your children?

Bankruptcy can be an intimidating process when you do not know what to expect. You worry about your current and future financial security, you worry about losing property, you worry about how you are going to rebuild your credit, and you may even wonder how it will affect your children.

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