Durham Bankruptcy Law Blog

While filing for bankruptcy is not something that should be taken lightly, it can be an effective way for North Carolina consumers to obtain debt relief. In many cases, bankruptcies are the result of a person losing a job or experiencing an unexpected medical debt as opposed to spending too much money. Those who file for bankruptcy may be able to keep some or all of their property.

Typically, a vehicle, equity in a home and other personal items are exempt from being liquidated or otherwise seized by creditors. In most cases, filing for bankruptcy has no impact on an individual's ability to find or retain a job. An employer will usually only take an employee's bankruptcy into consideration if a position involves working with money. In some cases, an employer may appreciate the fact that a worker took steps to get his or her financial house in order.

One of the reasons people give for rejecting bankruptcy as an option for dealing with their debt is the impact it will have on their credit. Too many people mistakenly believe that they will never be able to get credit again after they file bankruptcy, but that isn't really the case.

It is true that bankruptcy is a strong negative mark that will decrease your credit score and alert lenders to you potentially being higher risk as a borrower. However, bankruptcy is relatively common, and many people bounce back financially after discharging some of their debts. You can typically get credit cards within weeks of your discharge and qualify for a mortgage or car loan within a few years, provided that you make good credit decisions.

Throughout North Carolina and the rest of the United States, one out of every five American consumers do not know if they owe money on their credit card. Three out of every 10 Americans have no knowledge regarding the interest rates on their lines of credit. In a new online survey, 24% of the participants owed money in excess of $10,000 while 21% of the consumers did not have a clue as to whether they even had any debt.

The survey also showed that 37% of consumers only used one credit card. However, 27% had two credit cards, and the other 12% said they used at least five credit cards. On a different note, 60% of the participants stated that they always paid their bills by the due date and that they did not have any credit card debt. Additionally, 50% mentioned that they did not experience any difficulties managing several payments per month.

The profile of credit card debt is changing for many young people in North Carolina. Millennials were once known for their aversion to overdue bills, especially as many of them became adults and entered the workforce during the 2008 financial crisis. As a result, many of them steered clear of credit cards. However, as millennials' salaries have grown and card issuers have developed new offers that are particularly appealing to younger people, they have taken on a growing burden of debt.

Along with that overall increase in credit card debt, young people now also have a greater share of delinquent debt. Over 8% of credit card balances carried by young Americans were at least 90 days overdue. This marks an eight-year high in the level of delinquent debt carried by younger people. Experts say that many people have been inspired to open credit cards as their own personal income has grown. These new cardholders often feel confident that they will be able to pay back their bills. Of course, personal circumstances like job loss or a sudden illness can interfere with those plans. When credit cards are involved, overdue payments can add up, especially as interest rates are high. Even people with good credit pay interest rates of 18%.