Bankruptcy

Read Tips in Our Blog

Categories:

Repossession is on the rise; Bankruptcy stops it dead in its tracks.

in Bankruptcy

repossession

The COVID-19 pandemic wreaked havoc on the economy, leaving many people struggling to make ends meet. To help alleviate some of the financial strain, the government implemented a number of relief measures, including eviction and foreclosure moratoriums and loan forbearance programs. These measures also provided temporary relief for people who were struggling to keep up with car payments. However, as interest rates and auto prices continue to rise, many people are finding themselves at risk of repossession. In this blog post, we’ll explore why repossession rates are on the rise and how bankruptcy can help stop car repossessions.

Rising interest rates and auto prices

The pandemic has led to a shortage of new cars, which has caused prices to skyrocket. Additionally, interest rates have risen, making it more expensive to finance a car. This is a dangerous combination for people who are already struggling to make car payments. Many people are finding themselves in a situation where they owe more on their car than it’s worth, making it difficult to sell or trade in the vehicle.

The consequences of car repossession

When you finance a car, the lender has the right to repossess the vehicle if you fail to make payments. Repossession can have serious consequences, including damage to your credit score, legal fees, and the loss of your vehicle. Additionally, if the lender sells the car for less than you owe, you could be responsible for the difference.

How bankruptcy can help

Bankruptcy can be a powerful tool for stopping car repossession. When you file for bankruptcy, an automatic stay goes into effect, which prevents creditors from taking collection actions against you, including repossession. This means that if your car is about to be repossessed, filing for bankruptcy can provide immediate relief and give you time to figure out a plan to keep the car.

There are two types of bankruptcy that can help stop car repossession: Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy, you can discharge most of your unsecured debt, including credit card debt and personal loans. This can free up money to help you make your car payments. Additionally, in some cases, you may be able to keep your car by reaffirming the debt, which means that you agree to continue making payments on the car.

In a Chapter 13 bankruptcy, you create a repayment plan that allows you to pay off your debts over a period of three to five years. This can give you time to catch up on missed car payments and get your finances back on track. Additionally, if you owe more on your car than it’s worth, you may be able to “cram down” the debt, which means that you only have to pay the current value of the car.

What it all means

The pandemic relief measures provided temporary relief for people who were struggling to make car payments, but as interest rates and auto prices continue to rise, many people are finding themselves at risk of repossession. If you’re in danger of losing your car, bankruptcy can be a powerful tool for stopping repossession and giving you time to figure out a plan to keep your vehicle. However, bankruptcy should not be taken lightly and should only be pursued after careful consideration and consultation with a bankruptcy attorney.

The Perils of Buy Now, Pay Later

in Bankruptcy

Buy Now Pay Later

The pandemic has upended many aspects of our lives, including the way we shop and pay for groceries. With inflation driving up prices and squeezing household budgets, more Americans are turning to buy now, pay later (BNPL) apps to make ends meet. These apps offer instant credit, allowing consumers to spread out their payments over time. However, while BNPL apps can be a convenient way to manage short-term cash flow issues, they can also lead to deeper debt problems in the long run.

The rise of Buy Now Pay Later apps

BNPL apps have been around for a few years, but they have gained significant traction during the pandemic. Companies like Affirm, Afterpay, and Klarna allow consumers to purchase goods online or in-store and split the cost into smaller, interest-free payments over time. This can be an attractive option for people who are struggling to make ends meet, as it allows them to spread out their payments and avoid taking on more debt through traditional credit cards.

The downside of BNPL

While BNPL apps can be a lifeline for people who are struggling financially, they can also lead to deeper debt problems. For one thing, these apps often have higher fees and interest rates than traditional credit cards, especially if you miss a payment. Additionally, BNPL apps can encourage people to overspend, as the smaller, more manageable payments can make purchases seem more affordable than they actually are.

The impact of inflation

With inflation on the rise, more Americans are turning to BNPL apps to help make ends meet. According to a recent survey by Credit Karma, nearly 40% of Americans have used a BNPL app in the past year. Of those, 26% said they did so because they couldn’t afford to pay for their purchases upfront.

Bankruptcy as a solution

For those who find themselves struggling with debt, bankruptcy can be a viable option for getting back on track. Bankruptcy allows individuals to discharge most of their unsecured debt, including credit card debt, Buy Now Pay Later debt and personal loans. While bankruptcy can have a negative impact on your credit score and make it harder to get credit in the immediate future, it can also provide a fresh start and a path to financial stability.

However, bankruptcy should not be taken lightly. It can have consequences and should only be pursued after careful consideration and consultation with a bankruptcy attorney.  BNPL apps can be a convenient way to manage short-term cash flow issues, they can also lead to deeper debt problems in the long run. With inflation squeezing budgets and more Americans turning to BNPL apps to make ends meet, it’s important to be mindful of the potential pitfalls of these apps and to seek out help if you find yourself struggling with debt. Whether through bankruptcy or other means, there are options available for those who need help getting their finances back on track.

70% of American are feeling Financial Stress. Chapter 7 or 13 Bankruptcy can help.

in Bankruptcy, Credit and Credit Cards

Financial Stress

According to a new CNBC survey, 70% of Americans are feeling financially stressed. This is not surprising given the economic challenges that many people have been facing in recent years. However, there are ways to address financial stress, and one of those ways is through bankruptcy.

Bankruptcy is often seen as a last resort for people who are struggling with debt. However, it can actually be a powerful tool for reducing financial stress and starting fresh. Bankruptcy can help people in several ways:

  1. It can stop creditor harassment: When people fall behind on their bills, they often receive calls and letters from creditors demanding payment. This can be a source of constant stress and anxiety. Filing for bankruptcy can put an end to this harassment, as creditors are required to stop contacting debtors once they file.

  2. It can eliminate unsecured debt: Bankruptcy can discharge many types of unsecured debt, such as credit card debt, medical bills, and personal loans. This means that people can get a fresh start without having to worry about these debts hanging over their heads.

  3. It can prevent foreclosure or repossession: If people are behind on their mortgage or car payments, they may be at risk of losing their homes or vehicles. Filing for bankruptcy can stop the foreclosure or repossession process and give people time to catch up on their payments.

  4. It can create a payment plan: Chapter 13 bankruptcy allows people to create a repayment plan for their debts. This can make it easier for people to manage their debts and can reduce financial stress.

Overall, bankruptcy can be a powerful tool for reducing financial stress and starting fresh. While it is not the right choice for everyone, it is important to consider all options when dealing with financial difficulties. If people are feeling overwhelmed by their debts, they may want to speak with a bankruptcy attorney to learn more about their options.

Living Paycheck to Paycheck? Bankruptcy can help.

in Bankruptcy

Living paycheck to paycheck can be an incredibly stressful and challenging experience. It can leave people feeling like they are trapped in a never-ending cycle of debt and financial insecurity. In fact, according to a recent study by CNBC, 58% of Americans are living paycheck to paycheck. This is a startling statistic that highlights just how widespread the issue is.

While there are many strategies that people can use to try and break the cycle of living paycheck to paycheck, bankruptcy is one option that is often overlooked. Bankruptcy is often seen as a last resort for people who are struggling financially, but it can be a powerful tool for those who are living paycheck to paycheck.

The first thing to understand about bankruptcy is that it is not a silver bullet solution. It is not going to magically solve all of your financial problems overnight. However, what bankruptcy can do is give you a fresh start and a chance to get back on your feet.

There are two main types of bankruptcy that individuals can file for: Chapter 7 and Chapter 13. Chapter 7 bankruptcy is also known as liquidation bankruptcy. It involves selling off all of your assets (with some exceptions) in order to pay off your debts. Once the assets are sold, any remaining debts are discharged. Chapter 13 bankruptcy, on the other hand, is a reorganization bankruptcy. It involves creating a repayment plan that allows you to pay off your debts over a period of three to five years.

So, how can bankruptcy help those who are living paycheck to paycheck? Let’s take a look:

  1. Stop collection calls and harassment

If you are struggling to pay your bills, you are likely receiving collection calls and letters on a regular basis. These can be incredibly stressful and can make it even harder to focus on getting your finances in order. Filing for bankruptcy will put an immediate stop to these calls and letters, giving you some much-needed breathing room.

  1. Eliminate unsecured debts

Unsecured debts, such as credit card debt, medical bills, and personal loans, can quickly spiral out of control. With interest rates and fees piling up, it can feel like you are never going to be able to get out from under them. Filing for bankruptcy can eliminate these debts, allowing you to start fresh.

  1. Protect your assets

While Chapter 7 bankruptcy is called a liquidation, there are exemptions that can protect some or all of your assets. This means that you may be able to keep your car, home, and other important possessions. Additionally, Chapter 13 bankruptcy allows you to keep your assets while you work to repay your debts.

  1. Improve your credit score

While bankruptcy will initially have a negative impact on your credit score, it can actually be a positive in the long run. By eliminating your debts, you will be in a better position to rebuild your credit. Additionally, bankruptcy stays on your credit report for a maximum of 10 years, which means that you will eventually be able to move on and start fresh.

In conclusion, while bankruptcy is not the right choice for everyone, it can be a powerful tool for those who are living paycheck to paycheck. By eliminating unsecured debts, protecting assets, and providing relief from collection calls and harassment, bankruptcy can give people the fresh start they need to get their finances back on track. If you are struggling financially, it may be worth considering bankruptcy as an option. If you need help, contact a competent bankruptcy attorney to explain to you how bankruptcy can help you overcome your financial problems. 

A Breaking Point

in Bankruptcy

Credit card debt is one of the leading causes of financial hardship in the United States, with an all-time high of $930 billion in outstanding balances. This staggering amount of debt is causing many households to reach their breaking point and face significant financial stress. Fortunately, there is a solution that can help: bankruptcy.

Bankruptcy is a legal process that provides individuals with the opportunity to eliminate or restructure their debts. It can be a valuable tool for those struggling with credit card debt, as it allows them to discharge some or all of their unsecured debt and start fresh financially.

One of the main reasons credit card debt has reached such high levels is due to high-interest rates. According to a recent study by CreditCards.com, the average credit card interest rate is 20.35%. This means that if you have a balance of $10,000 on your credit card, you could end up paying over $1,600 in interest charges per year. For many people, this interest expense can make it nearly impossible to pay down their debt, and they end up stuck in a cycle of making minimum payments and accruing more interest charges.

Another factor contributing to high credit card debt is overspending. It’s easy to get caught up in the allure of credit cards and the ability to buy things you may not be able to afford otherwise. However, this can lead to a dangerous cycle of borrowing and overspending, ultimately resulting in an inability to pay off debts.

If you find yourself in a situation where credit card debt has become unmanageable, bankruptcy may be a viable solution. Bankruptcy can provide relief from overwhelming debt and help you regain control of your financial situation.

One of the benefits of bankruptcy is the automatic stay. When you file for bankruptcy, an automatic stay goes into effect, which stops most collection actions against you, including creditor phone calls, wage garnishments, and foreclosure proceedings. This can give you much-needed relief from the stress of dealing with debt collectors and allow you to focus on your financial recovery.

Chapter 7 bankruptcy is one option for those with significant credit card debt. This type of bankruptcy allows you to eliminate most unsecured debt, including credit card balances, medical bills, and personal loans. However, not all debts can be discharged in Chapter 7 bankruptcy, such as student loans and tax debts.

Chapter 13 bankruptcy is another option for those with credit card debt, particularly if you have a steady income but are struggling to keep up with payments. With Chapter 13, you can restructure your debts and create a repayment plan that lasts three to five years. This can give you more time to pay off your debts and potentially reduce your overall debt burden.

It’s important to note that bankruptcy should not be taken lightly and should only be considered after exploring all other options. Bankruptcy can have long-term consequences, such as a negative impact on your credit score and difficulty obtaining credit in the future. However, for many people, the benefits of bankruptcy far outweigh the negatives, and it can be a valuable tool for achieving financial freedom.

If you’re struggling with credit card debt and considering bankruptcy, it’s essential to speak with a qualified bankruptcy attorney. They can help you understand your options and guide you through the bankruptcy process, ensuring that you take the necessary steps to protect your assets and achieve a successful financial outcome.

In conclusion, credit card debt is at an all-time high in the United States, putting many households near their breaking point. Fortunately, bankruptcy can provide relief from overwhelming debt and help you regain control of your financial situation. If you’re struggling with credit card debt, it’s essential to explore all of your options and speak with a qualified bankruptcy attorney to determine the best course of action for your individual situation. Remember, taking action now can help you achieve a better financial future.

Improve your health with Bankruptcy

in Bankruptcy

Filing for bankruptcy is a significant financial decision that can have long-lasting impacts on your life. However, it may surprise you to learn that filing for bankruptcy can also have positive effects on your health. In this article, we will explore some of the ways in which filing for bankruptcy can be good for your health.

  1. Reduced Stress: Financial stress is one of the most significant contributors to poor mental and physical health. When you are struggling with debt, it can be difficult to focus on anything else, which can lead to feelings of anxiety and depression. Filing for bankruptcy can provide a sense of relief by eliminating or reducing your debt, allowing you to focus on other areas of your life.

  2. Better Sleep: Financial stress can also have a negative impact on your sleep quality. Constant worry about money can make it difficult to fall asleep and stay asleep. However, by filing for bankruptcy, you can reduce your financial stress, which may lead to better sleep.

  3. Improved Relationships: Financial problems can put a strain on your relationships with family and friends. Filing for bankruptcy can help to alleviate this strain by reducing the financial burden and allowing you to focus on building stronger relationships.

  4. Reduced Medical Bills: If you are struggling with debt, it is possible that you are also struggling to pay for necessary medical expenses. By filing for bankruptcy, you may be able to discharge some of your medical debt, which can reduce your financial burden and allow you to access the medical care you need.

  5. Reduced Risk of Heart Disease: Studies have shown that financial stress can increase the risk of heart disease. By filing for bankruptcy and reducing your financial stress, you may be able to improve your heart health and reduce your risk of heart disease.

It is important to note that filing for bankruptcy is not a decision that should be taken lightly. It can have long-lasting impacts on your credit score and financial future. However, for some individuals, filing for bankruptcy may be the best option for improving their financial and physical health. If you are considering filing for bankruptcy, it is important to consult with a qualified bankruptcy attorney to discuss your options and determine whether it is the right choice for you.