Now, more than ever, it is time to take control of your credit card debt. The Federal Reserve reports that overall consumer borrowing in the United States increased by 8.8 percent in November 2017, the most that it has in the past 2 years. Specifically, credit card debts jumped to 1.02 trillion dollars, which is the highest level on record.
In a recent study by the Employee Benefit Research Institute, researchers have determined that older Americans (those who are older than 55 years of age) are increasingly more in debt than in prior years. The study states that in 1992, 53.8 percent of these families carried debt from month to month where in 2016 that number reached 68 percent. And it continues to rise.
What would you do if the air conditioning goes out in your house tomorrow or if the transmission goes out in your car? Could you afford it? Would you have to go without food or electricity to cover the minor emergency?
Sadly, most Americans live from paycheck to paycheck with nothing in savings. This tragic truth is a recipe for disaster. It is not a question of “if” an emergency will pop up, but “when”. We know they are out there and will raise their ugly head at some point and we need to be ready.
Many people have the belief that once you file for bankruptcy, you will never have credit again. Thus, you will never be able to purchase a car, home or even have a credit card. This belief is simply untrue. Quite often, I see people who come to my office and need to file bankruptcy to resolve some other issues, but have this false belief of never being able to purchase on credit again. The truth is that you can rebuild your credit after bankruptcy, making it possible to buy a car, purchase a home, etc.
Over the past 10 years, the housing market has taken a big hit from the economic recession in the United States. Foreclosures and bankruptcies have both been affected by this financial crisis. Things are now slowing beginning to change allowing consumers to once again enter the housing market to buy the home of their dreams.
Perhaps like you, many of my clients have been threatened by collection agencies that they will go to jail for not paying their bills. I am not saying that it is impossible, because there are certain types of debts that can be criminally prosecuted if not paid, but the vast majority of debts are not a criminal offense. In fact, there have not been any Debtors’ Prisons in the United States since the 1850s.
Recently, S&P Global Ratings reported that more Americans are falling behind on car loan payments. This deficiency is the highest rate in more than six years. With more and more competition in the world of car buying, many lenders have lowered their requirements to consumers. This action has caused more delinquencies and defaults by people with struggling credit.
I am often asked the important question of whether a person will lose their home if they file bankruptcy. As long as you reside in the home or intend to move back into the home in the near future, you can exempt the home as a protected asset. Exemptions are used in bankruptcy to protect certain items of property from being taken away. We have the option of using either federal exemptions or Texas exemptions, depending on which would be more beneficial to you.
A common question among bankruptcy filers is how anyone can expect them to have the money to hire an attorney if they don’t have money to pay their bills. It is a fair question that we deal with day in and day out. You have 3 basic solutions to this problem.