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Bankruptcy Help For Everyday People

Durham Bankruptcy Law Blog

Why Chapter 7 is often a better choice than debt consolidation

It's common to notice advertisements for products or services when you need them and to tune them out the rest of the time. If you've been struggling with your finances, you may have noticed that there seems to be a lot of debt consolidation and debt relief programs that advertise both on the television and the radio.

You might even find yourself thinking that such programs could help you better manage your finances. However, you should keep in mind that it costs a lot of money to purchase that advertisement space. Those companies turn a tidy profit off of a service that they like to pretend they do for nothing.

Don't let the fear of bankruptcy hold you back: You'll recover

It's true that your life after bankruptcy may be different than it was beforehand. Bankruptcy generally reduces your credit score and can make it harder to get credit in the future, at least for a short time.

The fear of what might happen after bankruptcy isn't a good reason to avoid using it when you need it, though. Bankruptcy can free up your finances and make it easier for you to go without the need for credit cards. With better stability, you may not even miss the credit lines you once had.

Young adults not shying away from credit cards

According to TransUnion, roughly half of Americans between the ages of 18 and 24 have a credit score of at least 661. Therefore, lenders in South Carolina and throughout the country have made it a priority to connect with younger borrowers. Previous data has shown that a 24-year-old has an average of $2,000 in credit card debt. Furthermore, 41% of individuals between the ages of 18 and 24 have at least one credit card.

There had been some concern that younger Americans would be less eager to borrow money as they grew up during the Great Recession. While a willingness to borrow money could be good news for banks and other lenders, it can be detrimental to a young person's ability to grow his or her net worth. Millennials currently have 2.9% of the nation's wealth, and their financial standing was influenced by a willingness to take on student loan debt.

Candidates discuss medical debt during presidential debate

North Carolina residents who watched the Jan. 14 Democratic presidential debate may have heard Senator Bernie Sanders say that about 500,000 Americans file for bankruptcy each year because of medical debt. Sanders based his claim on the results of a recent survey of 910 personal bankruptcy cases conducted by the Consumer Bankruptcy Project. The advocacy group concluded that more than 65% of the people who file a Chapter 7 or Chapter 13 bankruptcy each year do so because they have medical bills they cannot pay or found themselves in an unmanageable financial situation after an illness or injury.

The CBP study suggests that the Affordable Care Act has done little to address the issue of medical debt in the United States as all of the bankruptcies studied were filed after the landmark law's passage. A previous study conducted by the group before the ACA was signed into law by President Obama linked roughly the same percentage of bankruptcies to medical debt. Senator Elizabeth Warren, who is one of the candidates running against Sanders for the Democratic presidential nomination, contributed to that study.

Protect your family with an estate plan

All adults should have a basic estate plan in place to provide instructions for their loved ones after they pass away. Unfortunately, many people don't take the time to get one in place either because they think they have plenty of time to create it or because they don't want to think about it. This can put their loved ones in a bad position when the person passes away.

If you don't have an estate plan in place right now, you should carefully consider how doing a little work can help loved ones in the future. This isn't necessarily a challenging process but it can take a little time.

The basics of chapter 13 bankruptcy

When most people think of bankruptcy, they often think of someone having all of their assets repossessed, including their home. While that is what happens with chapter 7 bankruptcy, there are other forms of bankruptcy. North Carolina residents may be interested in learning about chapter 13 bankruptcy, which basically allows a person to pay back their debt while holding onto their assets.

If an individual files chapter 13 bankruptcy, there will likely be some stipulations. Most individuals are required to attend credit counseling. The counselor will work with the individual who is filing for bankruptcy and will help them create a repayment plan that is reasonable for their budget.

Most Americans struggle with credit card debt

According to a survey from Bankrate, it isn't uncommon for Americans who are worth between $100,000 and $199,999 to carry credit card debt. Specifically, it found that 57% of those individuals are likely to owe money to credit card companies. This compares to 42% of others in North Carolina and throughout the United States. Individuals who make more per year may have greater access to credit, which means that they may be more tempted to use it.

It is also possible that individuals have a majority of their net worth tied to their homes or other assets that aren't liquid. Therefore, they have to use credit cards to pay everyday expenses or cover other costs that they incur. However, as a person's net worth increases, the likelihood that he or she carries credit card debt tends to decrease. Those who are worth more than $1 million tend to be the least likely to have such debt.

Ways to keep medical debt off credit cards

Many North Carolina residents are benefiting from rising income rates. While the national median household income has gone up over the last decade, by 30%, medical costs are rising too. Since the year 2009, they have gone up by 33%. Here are a few steps individuals can take to prevent credit card debt after a health scare or hospital visit.

Hospitals and private practices may offer monthly payments that are without interest or fees. A payment plan may be arranged through the provider. This option is not the same as getting a medical credit card. When a person has a medical credit card, they usually do not have to pay interest to the issuer for at least a year. However, they can be hit with serious fees if they do not pay it off by that time.

Life after bankruptcy: Your credit moving forward

When you were younger, you made a lot of financial mistakes. While you tried to get ahead and pay back what you owed, the reality was that you were really just treading water. No matter how much you worked, you were never really financially secure.

Today, you've decided to enter into bankruptcy to get back the financial security that you should have. You work hard, but you just aren't getting anywhere with paying back your debts the way you're doing it now. Fortunately, bankruptcy can be a good solution.

America's credit card debt: A trillion-dollar problem

Credit card debt is something that most people in America have some experience with. Whether it's a sudden medical debt or the loss of a job that requires you to use your credit cards up to their limits, debt can end up weighing you down and become overwhelming.

You're not the only person who struggles with credit card debt in America. Did you know that Americans owe over a trillion dollars in debts? Some states are more prone to high debts than others, too, which is an interesting thing to see when looking at debt calculations.

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