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Stratford Bankruptcy Blog

Negative equity can cause a financial crisis; bankrupcy can help

Buying a vehicle is a significant investment, but most people do not have any other options. Having a car is necessary for things like driving to work, going to the grocery store and even picking kids up from school. Cars do not last forever, though, and some Connecticut consumers might have to buy a new vehicle before they are ready. This can put people into precarious financial situations that may need to be addressed through bankruptcy.

High mileage, increased upkeep costs and changing needs are all common reasons for trading in old vehicles for newer ones. Unfortunately, car owners cannot control when these issues will arise. Since car prices are rising, it is getting harder and harder to pay off an auto loan before trading purchasing a new vehicle.

Paying off student debt might be easier with bankruptcy

Getting an education is very important for young adults in Connecticut, but unfortunately that education usually comes with a very large price tag. However, while many college grads leave school with a significant chunk of debt, some have much more than others. Since student loans usually cannot be discharged through bankruptcy, some people might not consider just how helpful bankruptcy can be.

While almost all jobs are important regardless of pay or purpose, there are some positions that benefit society and must be filled. These include jobs in both the social assistance and private health care industries. Even though these are very helpful and needed industries, adults who work in them have the largest average monthly student loan payments. On average, these college grads pay $685 per month. Those who work in education have the second highest average at $563.

Does holiday spending contribute to bankruptcy?

With the holiday season already gearing up, Connecticut consumers might be writing their gift lists and keeping an eye out for good sales. There is often a lot of pressure associated with the holidays, so many people feel the need to start getting ready early on. Unfortunately, that pressure can push some people even deeper into already difficult positions, leaving them drowning in debt. Even if this situation feels hopeless, bankruptcy could be an option.

According to a survey from Credit Karma, 43% of adults in America believe that it is impossible to survive the holidays without going into debt. This does not mean that people are happy about all that debt. More than half of the study participants said they would rather not buy gifts if that was an option. A total of 81% said that the main source of their holiday debt comes from purchasing gifts for loved ones. These results indicate that most people do not want to take on this type of debt, but feel that pressures from society and family make it impossible to survive this time of year without doing so.

The benefits of filing for Chapter 13 bankruptcy

There is no such thing as an income limit for having too much debt. Even if you earn at or above the average wage in Connecticut, you might still be struggling to make all of your monthly payments while also meeting your basic needs. If due dates are flying by and you are on the receiving end of collection attempts and harassing creditors, it may be time to consider Chapter 13 bankruptcy.

Maybe you never thought that bankruptcy was an option because of how much you earn. Chapter 13 bankruptcy is a good option for people just like you who are working, earning regular income but are still unable to pay their debts. It does not matter why you are struggling to pay off your debt, either. Some of the more common reasons that people fall behind on their bills include divorce, medical emergencies and job loss.

Can bankruptcy treat our debt-related health problems?

Being in debt is stressful. Whether a person has only a small amount of debt or is drowning in bills and collection notices, it is simply a hard situation. In addition to being hard, it could also be making people sick. According to one wellness expert, stressing over money affects people's health and puts them at risk for various diseases. Rather than compromise physical and emotional health, those who owe debt in Connecticut could consider bankruptcy instead.

In the United States, adults generally report that finances are the largest source of stress in their lives. Deepak Chopra -- a wellness expert -- says that a person who is stressed over money is more likely to see his or her blood pressure go up. Higher blood pressure is a significant risk factor in a number of serious health concerns. Heart disease, migraines and digestive problems have also been linked to stress.

Deciding whether bankruptcy is right for you

Facing financial struggles is not necessarily uncommon. Each year, many people in Connecticut will probably feel frustrated over an unexpected bill or a paycheck that was less than expected. These situations might only be brief, but for some people, the financial struggles never seem to end. While bankruptcy is often an effective solution to those struggles, deciding whether to file requires a careful evaluation of an individual's financial situation.

There is no bankruptcy checklist that a person can compare his or her situation against. Still, there are several indicators that bankruptcy might be the right choice. For example, if a person has exhausted virtually all of his or her money and is using credit cards to cover daily expenses, taking action is essential. Going further into debt will only exacerbate that person's financial problems.

Will bankruptcy help get rid of my student loans?

Getting an education is a crucial step to finding a successful career, but doing so without going into debt can be nearly impossible. College graduates in Connecticut tend to leave school with tens of thousands of dollars in student loans. With stagnant wages and perhaps less than ideal job opportunities, these individuals can quickly fall behind on their payments. Although student loans cannot be discharged in the vast majority of cases, bankruptcy can still be helpful.

In a study recently conducted by the online student loan marketplace LendEDU, it was determined that 32% of the people who file for Chapter 7 bankruptcy have student loans. Of those who do, student loans make up nearly half of their debt. These individuals could probably benefit from discharging their student loans, but most people do not understand their options for doing so.

Will bankruptcy ruin the rest of my life?

Even if you are living in fear of harassing phone calls from debt collectors and know that your bills are out of control, you may still feel reluctant to take life-changing action. It is not uncommon for people in Connecticut to avoid bankruptcy even when it is one of the most appropriate options for dealing with their debt. If you are worried about how bankruptcy will affect your future, you need to understand that you will still have plenty of financial options.

Are you worried that filing for bankruptcy will wreck your credit score? Chances are that your credit score is already suffering if you are behind on payments and dealing with debt collection efforts. Conversely, filing for bankruptcy can actually help you begin to rebuild your credit score. Within a short period of time following your bankruptcy filing, you may be qualified to get a low-balance credit card. If you pay off the balance every month you will be able to build credit and even increase your credit limit on that particular card.

Bankruptcy: Zombie debt could get worse soon

Paying off debt can take time and effort, but it is often a great relief when it is all said and done. Most people in Connecticut rightly expect for old, paid-off debts to stay in the past where they belong. Unfortunately, so-called zombie debt is a problem that affects many people, harming their financial security. When plagued by zombie debt, some find that filing for personal bankruptcy is helpful.

Approximately 75 million people in America are affected by debt collection efforts for things like student loans, credit card debt, medical bills and more. However, a significant portion of these individuals may not actually owe anything. In 2018, the Federal Trade Commission and the Consumer Financial Protection Bureau -- the CFPB -- received 62,800 consumer complaints, reporting that they were being hounded to pay debt they had already paid off or simply did not owe in the first place. Debt that has already been paid off is referred to as zombie debt because it is debt that essentially comes back from the dead.

Bankruptcy: Incomes stagnate as spending rises

The last few months of the year are filled with celebrations and holidays, many of which seem to fall one right after the other. From purchasing new home decor to buying gifts, Connecticut consumers usually end up spending a significant amount of money during this time of year. However, with income remaining fairly stagnant and consumer spending going up, some people might inadvertently find themselves in financially-strained situations. For these individuals, bankruptcy could be helpful.

Economists predicted that American spending would rise by .5% in July 2019. Spending actually grew by .6%. Personal consumption expenditures -- PCE -- accounted for .2% of that increase. This rise in spending might have been offset by the slight decrease in food prices, but energy services and goods rose significantly.

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