Although mounting debt can be overwhelming, many people find relief through bankruptcy. For those in danger of losing their home to foreclosure, Chapter 13 bankruptcy may be their best option. By filing for Chapter 13, people can design a repayment plan which allows them to pay off their mortgage debt in three to five years.
]]> If people do not qualify for Chapter 13, they still have options. They may be able to file for Chapter 7 bankruptcy. Through Chapter 7, people can eliminate their debt by liquidating their assets. However, this option may not be right for everyone because you may be forced to give up valuable property such as your home and vehicles.Fortunately, recent news reports indicate that fewer people may be facing foreclosure. In fact, foreclosure filings fell 5 percent in April and hit their lowest levels in nearly five years. In addition, bank repossessions dropped 26 percent compared to last year at this time.
Although the numbers are a positive sign, many people in New York and beyond continue to struggle with their finances. Those individuals would be wise to consult with an experienced bankruptcy attorney. An attorney can help determine what the best course of action might be based on an individual's specific situation.
Source: CNN Money, "Foreclosures fall to lowest level since 2007," Les Christie, May 17, 2012
]]>Individuals that have money in their bank accounts have room to bargain with creditors. Sadly, others with more pressing financial circumstances find themselves in a no-win situation. They can't afford the credit card payments, but at the same time they cannot afford to lose the ability to use a credit card for necessities - especially when they've already spent money from their paycheck paying off their bills. If they try to haggle with the credit card company they may instead find their credit card being shutdown.
]]> If not for this possibility, it would certainly be worthwhile to negotiate to at least have the interest rates on your credit card reduced. It's telling how much difference monthly payments on a credit card can be depending upon what interest rates you're paying.Paying off a $10,000 credit card over 8 years at 19.9 percent would mean paying off $10,055 or so in interest alone. An interest rate of less than 10 percent would mean paying less than $4,600.
However, what most individuals in debt do not have is the ability to negotiate from a position of strength. Attorneys experienced in providing a number of financial options can work with individuals in debt to determine what the best strategy would be.
Such attorneys understand when it would and would not be a good idea to file Chapter 7, 11 or 13 Bankruptcy. They are familiar with the tax consequences that can arise with debt relief. Such attorneys are also skilled negotiators and can often leverage the situation more effectively to your advantage.
Source: The Christian Science Monitor, "Credit card debt: What can you do about it?" by Trent Hamm, May 2, 2012
]]>In all, the woman has 14 children and has told the press repeatedly in recent months that she has been struggling financially. She says that filing for chapter 7 bankruptcy was the right decision for her, and that she did it for her children.
]]> Suleman is unemployed and says that she relies on Social Security disability payments and food stamps to get by. She also poses in occasional tabloid spreads for extra money. At one point, she was to write a book and produce exercise videos, but that never ended up happening.Instead, she apparently has about $1 million in debt and only $50,000 in assets. Doing the simple math, that means she owes approximately 20 times her net worth.
According to CBS News, Suleman is about $30,000 behind in rent payments on her house, which has four bedrooms. She also owes money to various entities, including Sylvan Learning Center, DirecTV, a school some of her children attend, a city water department and her own father.
Suleman filed for chapter 7 earlier this week, saying that she wanted a fresh start, but arriving at the decision as not easy. While her family situation is exceptionally unusual, her financial outlook is not. Filing for chapter 7 can be a viable option for those with mounting debt.
Source: CBS News, "'Octomom' files for bankruptcy, owes $30K in rent, up to $1M in debt," May 1, 2012
]]>About 1 in 10 children in the United States have been or will be affected by the foreclosure crisis. In fact, one report indicates that about 2 million children have lived in homes that were lost due to foreclosure. In addition, another 6 million children live in homes or rental properties that are at risk of foreclosure.
]]> In Nevada, a state that has been hit particularly hard by the foreclosure crisis, about 20 percent of children have lived in a home that was lost to foreclosure or that is in danger of being lost to foreclosure. In Florida, about 15 percent of children have been affected by foreclosure and about 14 percent of children in Arizona.When a child is forced from a home their development and performance in school may be affected. In fact, reading and math scores may decline as if a child has missed a month of school with every forced move they must endure.
Sadly, because the rate of home foreclosures is still high, more children may be forced to leave their home.
Although the prospect of foreclosure can be daunting, there are places for people to turn for help. Often, speaking with an experienced bankruptcy attorney is a good first step. An individual can learn what options may be available to them to effectively halt the foreclosure process and get them back on track with their finances.
Source: Chicago Sun-Times, "Study: Foreclosures take toll on kids," Julie Schmit, April 19, 2012
]]>A high-ranking county official and his wife, also a county employee, face bankruptcy fraud charges after failing to disclose $159,000 in income they could have used to pay creditors. The couple, who filed for bankruptcy in 2003, waited until 2010 to submit a bill to the county for money that the woman was owed for commission on a $4.4 million grant she had secured in 2004.
]]> In addition to the money that federal officials believe was hidden to avoid paying creditors, the couple conspired to defraud the county they both work for.When the woman finally got around to charging the county for her role in securing the $4.4 million grant, a vote was held that her husband participated in, even though the money would benefit him directly. He was fined $2,000 last year for using his board seat for private financial gain.
To make matters worse, the amount the woman charged the county for securing the $4.4 million grant should have been divided between several counties, all of which benefitted from the grant money. The discrepancy was questioned during an audit of the county's books.
The case demonstrates a sad truth that some people will commit fraud in an effort to get out of paying what they owe. It's also a reminder that clarity and honesty are important when filing bankruptcy.
Source: The Omaha World-Herald, "Buffalo County board chairman, wife indicted," April 18, 2012
]]>Warren Sapp, the 39-year-old former defensive lineman, recently filed for Chapter 7 bankruptcy. According to one source, Sapp owes more than $6.7 million to creditors. A portion of that money is also for late child support and alimony payments.
]]> Among his $6.45 million in assets is a $1,200 lion skin rug and close to $6,500 worth of Jordan brand shoes. Sapp currently makes slightly more than $115,000 a month as an analyst.Sapp is not the only athlete who has run into money troubles. In fact, according to Sports Illustrated, close to 80 percent of NFL players file for bankruptcy within a couple of years after retiring. Within five years of retirement, about 60 percent of NBA players file for bankruptcy.
Many New Yorkers can relate. Thanks to the tough economic times, millions of Americans are struggling to pay off their debt. They likely feel frustrated and overwhelmed. Fortunately, through bankruptcy, an individual may be able to discharge their debts and begin down a path to financial security.
New Yorkers who are struggling to pay their bills would be wise to consult with a bankruptcy attorney. An attorney can explain the options available to an individual and help them begin the bankruptcy process.
Source: The Washington Post, "Warren Sapp: The latest multimillionaire athlete to file for bankruptcy," Matt Brooks, April 9, 2012
]]>A recent news report shows that the recession hit certain minorities groups particularly hard. Although they typically have lower average 401(k) balances, new numbers show that African-Americans and Hispanics withdrew money from their 401(k) plans at a higher rate than other Americans during the recent recession.
]]> In 2010, 1.7 percent of white workers took hardship withdrawals from their 401(k). In comparison, about 9 percent of African-Americans took hardship withdrawals.That same year, about 40 percent of Hispanic workers and half of African-Americans workers had a 401(k) loan balance. Only about 26 percent of white workers had a loan balance.
Unemployment numbers prove that minorities were hit hard by the recession. In 2010, about 16 percent of African-Americans were jobless. Almost 9 percent of white workers were unemployed.
Despite the hardships, withdrawing from a 401(k) plan should be viewed as a last resort, especially during tough economic times. If a person is laid off or quits their job, they usually are required to pay off their loan balance in just 60 days.
Instead of withdrawing money from a 401(k) plan, people may wish to explore other options, such as filing for bankruptcy. Those struggling to pay their mortgage could also explore a loan modification. In either case, a person would likely benefit from consulting with an experienced bankruptcy attorney who can help determine the best course of action based on an individual's specific situation.
Source: USA Today, "Downturn leads to rise in costly 401(k) loans by minorities," Sandra Block, April 3, 2012
]]>A new study revealed that many Americans are paying their car loans first and choosing to fall behind on other debt such as mortgage payments and credit card bills. In fact, of the 4 million people studied with at least one car loan, one credit card and a mortgage, only 10 percent missed a payment on their car loan. Compare that to almost 40 percent who fell behind on their mortgage payments while staying current on their car loan and credit card bills.
]]> Some believe this new trend has emerged because people know how important it is to get to their jobs. If someone stops paying their car loan their vehicle could be repossessed within 90 days. However, the foreclosure process may take years, and some people might be able to negotiate with their credit card companies.People with high amounts of debt may be doing their best but forced to prioritize their bills. Some months that may mean falling behind on certain bills. When debt becomes too overwhelming to deal with people may find that bankruptcy is their best option. By filing for bankruptcy an individual may be able to discharge their debts, giving them a much needed fresh start.
Source: Star Tribune, "Americans put a priority on staying current on the car loan, a study finds," Pallavi Gogoi, March 29, 2012
]]>Last month, federal and state officials reached a $25 billion settlement with five of the nation's largest mortgage lenders. In 2010, it was discovered that many banks were involved in deceptive foreclosure practices. In some instances, documents were signed without anyone verifying the information.
]]> The five banks involved in the settlement will collectively face $766.5 million in fines. However, they will likely not be the only ones to face fines. Recently, the Federal Reserve announced that they plan to fine eight more banks.About $1.5 billion from the $25 billion settlement will go to individuals who lost their home to foreclosure between September 2008 and December 2011. People can expect cash payouts of about $2,000.
Banks also appear to be doing what they can to help consumers who lost their homes. About four million letters have been sent to homeowners. Those homeowners have until the end of July to request a review of their case. So far, about 121,000 people have requested a review.
For those who continue to struggle with their finances and those who are seeking immediate relief, it may be best to file for bankruptcy. By filing for bankruptcy an individual may be able to discharge their debts through liquidation or set up a repayment plan that would allow them to get back on track with their finances.
Source: The Wall Street Journal, "Fed Plans to Fine Eight More Banks for Foreclosure Violations," Alan Zibel, Mar. 19, 2012
]]>In a survey of more than 50,000 people, the Centers for Disease Control and Prevention found that one in five Americans is struggling to pay their medical bills. In fact, some people reported that they have no money to contribute to their high medical debt.
]]> The survey was completed over a six-month period from January 2011 to June 2011 and is the first time the CDC has asked people about medical debt. Not surprisingly, those with lower incomes appear to be struggling to pay back medical debt the most.Although the numbers are alarming, one group says the number of Americans who have struggled with medical debt has stayed relatively the same since the start of the recession. The Center for Studying Health System Change surveyed a smaller number of people in 2007 and 2010. Both surveys indicated that one in five Americans is struggling to pay their medical bills.
That is surprising considering that the number of people who were uninsured and unemployed grew since the start of the recession. However, some believe the numbers point to a bigger problem. More Americans appear to be cutting back on doctor visits, prescriptions and other medical expenses in an effort to save money.
Although many Americans are finding it difficult to pay their bills, there are solutions available to people. Bankruptcy may be the best option for some. By filing for bankruptcy, people can discharge their debts and begin down a path to financial stability.
Source: The Washington Post, "1 in 5 US families say they struggle to pay medical bills; half say they can't pay a cent," Mar. 6, 2012
]]>Student-loan debt in the United States has now reached $870 billion, surpassing both credit card debt and car loans. Of even greater concern is that about 14 percent of people with student-loan debt have not paid back their debt on time. In fact, $85 billion in student loans are past-due.
]]> About 37 million Americans have student-loan debt. About 40 percent of those people are under the age of 30. The average amount of debt is about $23,000. About 43 percent of borrowers owe up to $10,000. However, a small fraction of people owe more than $200,000.Struggling with mounting debt can be both frustrating and frightening. Whether it is credit-card debt, mortgage debt or student-loan debt, people may feel helpless.
Fortunately, there are solutions available to people to help them eliminate their debt once and for all. Bankruptcy may be the best option for many New Yorkers. Through bankruptcy, an individual can pay off their debts and begin down a path to financial security.
However, student-loan debt typically cannot be eliminated through bankruptcy. It is for that reason why it may be beneficial to meet with an attorney who can explain the various options and the steps an individual needs to take to begin the bankruptcy process.
Source: CBS News, "Student debt continues alarming rise," Lynn O'Shaughnessy, Mar. 8, 2012
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