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Which generation struggles the most with debt management?

Connecticut consumers of all ages and from all walks of life struggle with debt. However, there are certain groups that seem to have a harder time with debt management than others. According to Experian, people who are part of Generation X have more debt and lower credit scores than baby boomers or Millennials. 

Men and women between the ages of 35 and 49 have an average mortgage debt of $231, 774. That is higher than any other age group. They also carry non-mortgage debt at an average of $30,334. The average credit score for adults in this age range is 658, lower than any other demographic. Very often, people in this age range still have children living at home and the associated costs. 

Could your tax return help in your debt management efforts?

Tax season is just around the corner, and many Connecticut residents are already planning how to spend their returns. For those who are struggling with debt management, an influx of cash could take a nice bite out of an existing debt load. Understanding the best way to allocate a tax refund can help consumers make the most of this and any other windfall.

It may be tempting to make a big purchase with a tax refund, but there are usually better ways to spend that money. For those who carry large balances on high interest credit card accounts, paying down those accounts is an excellent use of those funds. Begin with the highest interest rate, and move down the list from there. 

Handling debt management with bad credit scores

Trying to gain control over debt is important, both for financial stability and peace of mind. For many Connecticut residents, debt management becomes more challenging once their credit scores drop. Fortunately, there are still a number of tactics that can be used to gain control over debt, regardless of one's credit scores. 

One option is to secure a co-signed loan to pay off other creditors. Some lenders will issue a loan to a borrower with bad credit if someone with a better credit standing agrees to co-sign. This makes it easier to qualify for a loan, and can yield a better interest rate. On the downside, if the borrower fails to repay the loan, the co-signor is left on the hook for the balance. 

How long will a personal bankruptcy haunt my credit?

Many Connecticut consumers can achieve lasting financial relief by seeking bankruptcy protection. However, concerns over the damage that a personal bankruptcy might do to their credit keeps some from filing. It can be helpful to understand the ins and outs of personal bankruptcy, including just how long the action will remain on file, and how damaging that information might be. 

For those who file for Chapter 13 bankruptcy, the action will remain on credit reports for a period of seven years. Those who seek Chapter 7 bankruptcy will see their records adjusted for a period of 10 years. There is no denying that the initial hit to a credit score will be significant. 

Facing foreclosure: Assistance and guidance is available

Purchasing a home is a goal of many Connecticut residents, and one that often takes years of planning and sacrifice to achieve. Faced with losing a home through foreclosure, many people go through a great deal of stress. It's important to understand that there is help available. Choosing the right path out of financial turmoil is important and can make all the difference between success and failure.

The U.S. Department of Housing and Urban Development recently released a "Homeowners Guide to Success" in an effort to educate homeowners on how to respond if they fall behind on mortgage payments. The guide is meant to offer simple, real-world advice to struggling homeowners, and to steer them away from potential fraud and scams. 

Balance transfers could be solid debt management option

Many experts believe that interest rates will rise as the year comes to a close. For some Connecticut consumers, that could mean a significant uptick in their credit card debt payments. However, it's possible to lower your rate before that occurs. Balance transfers, when used responsibly, can be a powerful tool for debt management

Credit card companies are happy to compete for your existing credit card debt. They might offer a low or zero percent interest rate for a set period of time. If you transfer your debt onto the new account, you can save the interest fees during that span of time, which can help you to find a long-term solution. 

Personal bankruptcy can set the scene for a new beginning

Those residents of Connecticut who have filed and completed a bankruptcy, and those who are contemplating doing so, can look forward to a fresh start and the chance to do things right the next time around. Successfully completing a personal bankruptcy is not the end of the world but instead a new beginning. It is a chance to wipe the slate clean and start over without the burdens of overwhelming debt.

Taking the following steps will assure that one takes advantage of the benefits of the debt relief received by the bankruptcy. The fact that one's credit will be negatively affected is not a solid barrier to rebuilding that credit. Within a year or two, the focused, positive-thinking individual can rebuild a respectable credit score and be able to take on future debt in a responsible manner. 

Chapter 7 bankruptcy can ease the financial woes of seniors

Consumer bankruptcy filings in Connecticut continue to be vigorous despite the relative recovery in the economy. For example, personal Chapter 7 bankruptcy filings have grown among senior citizens who are 65 and older.  The main reason for that increase is the high cost of medical debt, which has hit the older population particularly hard due to the prevalence of fixed or static incomes among them. 

Seniors are also hard hit because they are more prone to encounter a serious medical condition requiring extensive hospital visits or complex surgical procedures and treatment. Perhaps surprisingly, some seniors report that it was the best decision that they could have made under the circumstances. According to consumer bankruptcy attorneys, the most striking aspect of seniors trying to deal with overwhelming medical debt and/or credit card debt is the obvious intensity of the stress and anxiety they suffer by trying to keep up with creditors' and collectors' demands.

Tips for post-bankruptcy debt management

Moving beyond a bankruptcy is a chance for Connecticut residents to make a clean financial start. For many, this is a time of excitement, when everything seems possible and the burden of excessive debt has been removed. In order to make the most of this financial freedom, it is critical to begin making smart budgeting and debt management choices. 

One place to begin is by creating a comprehensive budget and automating that budget to the greatest degree possible. Using your banking software or a budgeting app can make it easy to meet all of your financial obligations and also set aside some money for savings. Some people even set their accounts up to direct a dedicated amount into a discretionary spending account, which can help to limit impulse buying. 

Medical debt may lead older individuals to personal bankruptcy

Older people often find themselves facing various medical issues. Though anyone of any age could end up with medical needs, older Connecticut residents may be particularly susceptible to developing health problems that could lead to significant medical bills. Unfortunately, elderly individuals may also have a more difficult time paying these bills, but personal bankruptcy may be able to help.

Unpaid medical expenses make up the number one reason that individuals file for bankruptcy. With the high cost of treatments, it is not surprising that numerous people have trouble attending to the bills they end up with after seeking medical attention. It was recently reported that 8 percent of bankruptcy filers are parties aged 65 or older. It was noted that the economic recession may have played a role in debts having a more significant impact on older parties.

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