When Connecticut consumers have an overwhelming amount of debt, it can lead to various consequences that impact almost every area of their lives. From threats of losing the family home to phone calls from debt collectors, a consumer may feel overwhelmed and unsure of what to do next. One of the most unfortunate effects that debt can bring is wage garnishment, but personal bankruptcy could be the solution.
Americans have been working hard to pay off their credit card debt. Consumers in Connecticut and across the rest of the nation paid off a collective $40.8 billion in the first quarter of 2018 alone, but it still might not be enough to dig themselves out of debt. When working hard to pay back debt is no longer enough, Chapter 7 bankruptcy might be the smartest financial path.
Since the financial crisis that rocked consumers in Connecticut and across the country 10 years ago, there has been a renewed focus on national consumer debt levels. In recent years, consumer debt has been growing, but not everyone is worried. Some experts believe that the current stronger economy can support the growing levels of debt. However, there are always exceptions to these generalities, and some people might find that personal bankruptcy is their best solution to overwhelming debt.
The Bankruptcy Abuse Prevention and Consumer Protection Act -- BAPCPA -- of 2005 cut off a significant number of Americans from pursuing Chapter 7. However, many people in Connecticut might be surprised to learn that not only do they still qualify for Chapter 7 bankruptcy, but that they could greatly benefit from filing. According to one expert, it is a vastly underused tool for dealing with debt.