Month: March 2020

Millennials & Credit Cards

in Bankruptcy, Credit and Credit Cards

The types of people carrying credit card debt is changing in Georgia and around the country. Millennials, a group of people born between 1981 and 1996,  were once known for their aversion to overdue bills, especially as many of them became adults and entered the workforce during the Great Recession. Because of this experience, a significant number of millenials steered clear of credit cards. However, as they have experienced salary growth and with credit card issuers developing cards that are particularly appealing to younger people, millennials have taken on a larger and larger share of credit card debt.

Along with that overall increase in credit card debt, millennials now experience higher levels of delinquent debt. Over 8% of credit card balances carried by these younger Americans were more than three months past due. This marks a high in the level of delinquent debt carried by younger people not seen in nearly a decade. Experts say that millenials and other young people have been inspired to open credit cards as purchasing power and income has grown. Many of these new cardholders feel confident that they will be able to pay back whatever bills they run up. The problem is, life often gets in the way. Personal circumstances like an unexpected job loss or an illness can interfere with a person’s ability to pay. When credit cards are involved, interest rates are exceptionally high, occasionally topping 35%. Even people with exceptional credit often pay interest rates of 18%.

Credit card companies often tweak their marketing to appeal more strongly to young people. These companies use tons of data and studies show that traditional incentives like 0% interest and cash rewards are less enticing for millennials than sign-up bonuses or travel credits. The worst part about the rise of credit card debt is that it accompanies a big rise in interest rates recently by the Federal Reserve.  This makes it even more expensive to carry a balance on a revolving line of credit like your traditional credit card. 

When people find themselves facing insurmountable debt burdens, they may not see the light at the end of the tunnel. However, a qualified bankruptcy attorney could provide sage advice and educate people on the available options that can help you achieve your financial goals. If you find yourself drowning in debt contact the attorneys at Harmon and Gorove.  We have decades of experience helping people achieve the dream of being debt free. 

COVID-19 and your Finances

in Bankruptcy, Credit and Credit Cards

COVID-19 is a disease the likes of which no one alive has witnessed or has any real recollection of.  While we’re Attorneys here and not Doctors, we know that COVID-19 has a real impact, not just on people, but their finances as well.  Many Americans don’t have paid sick leave and if they do, perhaps they don’t have enough.  Many people work in industries that often shut down when they don’t have enough visitors like hospitality, the restaurant business, lodging and seasonal jobs that depend on foot traffic.  Let’s be honest, I don’t know about you, but I do know that I’ve been out and about and all I can say is, foot traffic is at a minimum to say the least.  Additionally, with schools and businesses closed, many of the industries that support these large employers like parking attendants,  dry cleaners, sanitation workers, janitors and custodians as well as hourly secretarial staff are all seeing hours cut back or eliminated period.  A recent CNN article suggested that more than half of all jobs in America are at risk.  The author states, “Nearly 80 million jobs in the US economy are at high or moderate risk today, according to analysis in the last week from Moody’s Analytics. That’s more than half of the 153 million jobs in the economy overall.” We could potentially take years to get back to where we are today if the worst case scenario materializes and for many, that is simply too long.  Thousands of small businesses will be affected by the economic downturn and millions of people will experience furloughs, layoffs and closures.  That said, we are here to help.  Harmon and Gorove has successfully helped people navigate economic downturns and have assisted them in making their financial situation work for them, even in the worst of times.  We understand that no one ever expects to be here, but don’t worry, we are here to help in a compassionate and judgement free way.  If you’re suffering from job loss, or simply just having your hours cut, contact us today for a free, no obligation consultation to learn how we can help you navigate the most recent economic downturn. 

5 Common causes of Debt

in Bankruptcy, Credit and Credit Cards

People come into our office all the time with debt.  It’s kinda what we do.  If you’re here and you’re not in debt or seeking a divorce, chances are, we won’t be able to do much for you.  Over time, this has given us perspective on what actually causes debt.  Below are the top five causes of debt. 

1. An unexpected emergency

Many people find themselves in debt because they aren’t prepared when something bad happens. Your entire HVAC system may go belly up and need significant repairs. You may crash your car or get really sick only to find your insurance doesn’t cover everything. To keep these scenarios from wiping out your savings and leading to debt, you once again need to boost your emergency fund.

2. College costs

Going to college is expensive. So many people find themselves saddled with debt from college and often in the early part of their lives. This makes getting ahead and acquiring those assets that help build wealth even harder than before.  The average class of 2016 graduate left school with $37,172 in student loan debt. Those student loans can force a new graduate into even more borrowing just to cover basic necessities, which only furthers the downward spiral into debt.

3. Loss of income

Losing your primary means of generating income can really hurt you. You might have been laid off or maybe you did something stupid and got yourself fired. Maybe you’re self employed and had a sudden decline in revenue for your business. Maybe you had to stop working to care for loved one.  Perhaps your health took a turn for the worse and you were forced to retire early or significantly reduce your hours.  When horrible things like this happen, it’s easy to find yourself overwhelmed and debt can quickly follow.

4. Being poorly insured

Insurance is one of the most vexing things about life. It frequently feels like a waste of money … until you need it. Many people find themselves in very serious debt  when a bad event hits and they aren’t properly insured. Imagine  your house burning down without homeowners insurance or wrecking  your car with a liability only policy. All of these things can lead to serious financial consequences. 

5. Keeping up with the Joneses

People are always looking next door and seeing what the neighbors are doing,  yours truly included. Maybe Todd across the street is putting in a pool or your college roommate is sharing photos of their latest European vacation. Maybe your obnoxious sister-in-law just closed on a house twice the size of yours. Life really feels unfair when you feel like you have to go without and like many people, you may feel pressure to “keep up” with those you perceive to have it better than you. 

DON’T DO IT THOUGH, THIS IS A RECIPE FOR DISASTER.

Chasing a lifestyle your income won’t support will have you turning to credit cards and other consumer debt to fund frivolous buys. The spiral into debt can be quick, overwhelming and unforgiving. The average millionaire drives a Honda, Ford or Toyota, and lives in a normal house in a middle class neighborhood. No one is saying you shouldn’t treat yourself to nice things or go on vacation every once in a while; but if you can’t actually afford those things you’re hurting yourself in the long run.

If you’ve found yourself drowning in debt, whether it’s one of these causes of debt or not, reach out to the experienced and compassionate lawyers at Harmon and Gorove for a free consultation today.  We have decades of experience helping people get their finances back on track and and creating lasting prosperity for our clients.