Kim Covington | A personalised & Sensitive Approach to Bankruptcy
The The Law Office of Kim Covington blog shares Bankruptcy Law stories and opinions relevant to Eugene, Oregon residents. I am an attorney for bankruptcy and foreclosure prevention, I am passionate about helping my clients overcome financial obstacles.
Debt can come in a variety of forms and fashions, each of which could have a significant impact on a person's life. With credit card purchases over the past year reaching levels that go beyond those present prior to the Great Recession, many individuals in Oregon may be experiencing trouble keeping up with monthly payments. Those who struggle under the weight of credit card debt may wish to pursue relief, but with little experience in the area, they might be unaware of the options that are available.
According to recent reports, the amount of credit card debt racked up over the previous year came in at just over $92 billion, bringing the total owed to more than $1 trillion. These reports suggest that almost $70 billion in credit card purchases took place in the fourth quarter alone. This staggering amount could be the result of a substantial increase in holiday spending, which many individuals may have chosen to carry out with the use of a credit card.
Along with holiday spending, reports suggest that many individuals say they used their credit card to pay for medical expenses. This study also suggests that this increase in debt may be partly due to the fact that companies are less hesitant to extend lines of credit to individuals with lower credit scores. With the recent surge of purchases on similar accounts, many individuals may be experiencing financial strain, and for those who are unable to keep up with payments, the concern may only continue to grow.
High levels of credit card debt can have a devastating impact on a person's life. Those who experience severe financial concerns due to rising balances may wish to know more about the available options for relief, but they might be uncertain where to turn for guidance. Fortunately, there are attorneys that can provide a person in Oregon with advice on how to pursue monetary relief and how to begin working his or her way back toward financial stability.
Raising a family can be difficult, especially in the early years. Your career is not yet mature, your children are not old enough to care for themselves and your bills pile up quickly. Debt can put major strain on a young family’s finances. But it can also affect your family in ways that you may not have considered.
The effects of debt
Alarmingly, debt can have a negative effect on health—even for children. Worrying about how to make ends meet can cause serious stress and anxiety. The feeling of being overwhelmed by financial burden can also spark or exacerbate depression. These feelings can trickle down from adults to their children. Even if young kids are not aware of the family’s financial predicament, they often pick up on emotional cues from their parents.
Education and career opportunities
College is expensive, and the cost of tuition, books and housing seems to increase every year. A family’s financial status can significantly affect their children’s college prospects. The secondary education opportunities available may be significantly limited based on cost. This applies to parents, too: Moms and dads who wish to return to school to advance their careers may find themselves out of luck if they can’t come up with the cost of schooling and can’t take on more debt.
Parents who struggle with overwhelming debt may unintentionally be setting up their children to take on debt as well.
Children tend to model their behavior off the adults in their lives. Uncontrollable spending that has led to credit card debt can teach children excessive spending habits. Children may also learn to take on other kinds of unsecured debt like payday loans and loans from family and friends.
When it comes to debt related to home, school or medical issues, children may have no choice but to take on more debt. With no other financial resources, some families and kids become stuck in a cycle of debt.
Dealing with debt
Many families wonder how to even begin reducing their debt. These are some approaches that young families can take to handle their debt:
Don’t ignore the notices from your creditors. It can be tempting to push them aside—especially if they become overwhelming. But late fees can add up quickly and only increase your debt.
Whenever you can, make your monthly payments on time and in full.
Work with a financial planner or attorney to evaluate your situation.
If necessary, consider filing for Chapter 7 bankruptcy. Bankruptcy is not shameful; rather, it can offer a fresh start for struggling families.
Create a budget, and do your best to stick to it.
Have honest, age-appropriate discussions with your children about household finances.
For many individuals in Oregon and elsewhere, the decision about what to do with a tax refund can be a challenging task. Some may believe it is best to place their refund in savings in case of an emergency, while others might wish to make payments on debts and free up income. However, for those who are experiencing significant financial issues, a refund could be a means with which to pursue relief from debts through bankruptcy.
According to reports, the average tax return in the previous year was just under $2,900. Financial advisers recommend that individuals either place their refunds in savings or use them to make payments on debts. However, results from a recent survey suggest that many individuals plan to use their refund to assist with everyday expenses or to pay to see a medical professional for treatment they would otherwise avoid.
This survey also suggests that a significant number of individuals also consider using their refund to file for bankruptcy. Individuals who continually struggle with monetary obligations may see this as an opportunity to seek the relief they might otherwise be unable to afford pursuing. However, filing for bankruptcy is a major financial decision, and before deciding on a path, a person might find it advisable to seek guidance from someone with experience in the area.
Upon receiving their tax returns, many individuals may wish to pursue relief from debts, but they might be uncertain where to turn for assistance in the process. Those who experience substantial financial concerns could consult with a bankruptcy attorney for guidance on the available outlets for relief. An attorney in Oregon can review a client's financial situation and assist in getting his or her finances back on track by pursuing relief from debts.
Whether to purchase a big ticket item, or simply for assistance with day-to-day expenses, many individuals in Oregon and elsewhere have turned to credit accounts for financial aid. While credit cards can provide immediate relief, such a decision could come with a price, and high interest rates on balances could lead a person toward financial hardships. However, monetary issues may not be the only concern with credit card debt, as studies suggest that similar situations can have a negative impact on a person's health.
According to reports, credit card debt reached record highs in the previous year, with the total of such debts in the nation exceeding $1 trillion. For many, this may come as no surprise, as nearly half of individuals who sign up for such accounts say they carry a constant balance. Being unable to pay off a credit card each month could have devastating consequences, as high interest rates may cause one's balance to continually increase.
Those who experience similar financial struggles may carry added stress, which can be emotionally harmful. This may also cause some to experience issues in sleep patterns, and if these problems persist, their physical health could suffer the consequences. Individuals who struggle with debts may wish to safeguard their physical and mental well-being by pursuing relief, but with numerous available options, they might be uncertain how best to proceed.
Many individuals have experienced prolonged periods of struggle due to substantial amounts of credit card debt. Those who wish to know more about the options for relief could consult with an experienced bankruptcy attorney for guidance. An attorney in Oregon can assist a client in choosing the correct path with which to pursue financial freedom, and provide him or her with advice on how to avoid similar issues in the future.
According to recent studies, most individuals across the nation are currently dealing with some form of debt. Individuals in Oregon who are experiencing financial concerns may find some level of comfort in the fact they are not alone. However, simply knowing that others feel their pain does little to fix the issue, and should these challenges persist, one might find it helpful to speak to a bankruptcy attorney for guidance in pursuing relief.
These studies were conducted using a variety of individuals ranging anywhere from baby boomers to millennials. The results in each category were roughly the same and suggested that nearly 80 percent of Americans were carrying some form of debt. However, the types of debt that are an issue for each generation differs slightly, with results suggesting that younger individuals hold higher mortgage debts and baby boomers carry higher credit card balances.
Regardless of the type of financial issues one faces, these studies suggest that the first step in reducing debts is to become aware of them. Upon organizing debts, a person can form a strategy on how to pursue relief. While the options available to each individual may hinge on the variables present, such as the type of debt involved and his or her ability to make payments, choosing the correct option can be a daunting task.
Dealing with the burdens of debt can be an intimidating experience, and persistent financial issues could cause a person to suffer substantially. Individuals in Oregon who wish to cut down on or eliminate debt loads could benefit from speaking with a bankruptcy attorney for guidance on the available outlets for relief. An attorney can examine a client's financial situation and provide guidance in choosing a path with which to pursue relief and forge a path for a return to financial stability.
A medical emergency can occur at any moment and could have a substantial impact on a person's health. When experiencing such an event, it may be necessary for a person in Oregon to seek treatment as soon as possible. Unfortunately, the extensive costs of treatment could leave many individuals fearing medical debt more than the threat a condition poses to their health.
With health care costs continually on the rise, studies suggest that many individuals may have greater fear of receiving a bill for treatment than they do of being diagnosed with a major condition. This remains a concern even for those who carry health insurance, as their plan might not be sufficient enough to cover the full cost of treatment. However, while rising health care costs may be imposing enough, studies assert this isn't the only issue one might face.
According to the study, a great deal of individuals simply don't have enough money in savings to cover a hospital visit, even for a lesser condition. The study suggests that by attempting to build a financial safety net, one could become better prepared should an emergency occur. However, even for those who have funds stashed away for similar circumstances, even a simple medical procedure can be costly and could wreak havoc on a person's finances.
Medical debt continues to be one of the leading causes for monetary issues among many individuals in Oregon. Those who suffer under the weight of such debt could choose to pursue relief by consulting with an experienced attorney. A bankruptcy attorney can provide a client with guidance on all the options available and assist him or her in choosing the correct path with which to pursue financial relief.
In the debate of good debt versus bad, many individuals in Oregon or elsewhere may struggle to understand the difference between the two. In some cases, one may feel as though frequent use of a credit card can help to improve his or her credit score, provided payments never fall behind. However, this form of debt generally falls under the bad category, as it has been the source of financial troubles for many individuals over time.
In determining what types of debt could be considered healthy or good, the general idea is a debt that is considered good may hold future value or help a person bring in additional income down the road. For example, taking on a mortgage is a serious financial decision, but if a home sees an increase in value, it may bring in additional income to the owners in the future should they decide to sell. A student loan is another type of debt that can prove to be a source of stress, but the education obtained can help further a person's career.
With the rewards offered and the potential ability to avoiding interest by paying balances off each billing cycle, some individuals may view credit cards as a healthy option. However, these debts are rarely viewed as good, and carrying a constant balance on such an account can leave a person paying down a balance for years due to high interest rates. In addition, even if a person is able to make the minimum payments on similar accounts, a high balance may still have a negative impact on his or her credit.
When credit card debts lead to significant financial hardships, a person may find it advisable to seek guidance from someone with experience in the area. A bankruptcy attorney can provide an individual with advice in developing a strategy to regain control of his or her finances. An attorney in Oregon can address a client's financial situation, assist in pursuing relief from debts and provide guidance on how to prevent similar issues in the future.
After filing for Chapter 7 bankruptcy, you may be worried about having to turn over your possessions to a bankruptcy estate. Not all bankruptcy cases require property turnover. In fact, many Chapter 7 filers will not have to relinquish any possessions at all.
Even in cases that do require property turnover, it is unlikely that you will be left completely empty-handed. This is because some property is safe from being turned over, even if you have large debts. This post will discuss which types of property you may keep—and which you must give up—in a Chapter 7 bankruptcy case.
Exempt vs. non-exempt
Property in bankruptcy cases is divided into two categories: Exempt, and non-exempt. When property is exempt, it means that it is protected from turnover during the bankruptcy process. Non-exempt property, however, is not protected, and may have to be turned over to a bankruptcy estate.
Bankruptcy law provides exemptions for certain kinds of property. To be exempt from turnover, a piece of property typically must be a necessity that is required for working or day-to-day living. This includes a reasonably necessary amount of clothing, household furnishings and appliances. Any government assistance that you are receiving is exempt, as it is necessary for your day-to-day needs. Your pension plan will also be safe, since it will be a necessity for your future.
Property that must be turned over is composed of non-essential luxuries that have a high value. You won’t need these items to survive day to day, so you may have to turn them over to a bankruptcy estate. First and foremost, you may very well have to turn over your bank accounts, stocks and other investments. Any expensive musical instruments, valuable collections or collectors’ items and even family heirlooms are also subject to turnover. If you have a second house or car, you will probably have to turn them over; most filers are allowed to keep only one home and a car that falls under a certain value.
For many individuals in Oregon and elsewhere, debt may seem like a part of everyday life. Recent reports suggest that the average home carries credit card balances in excess of $15,000 alone. While these balances might not prove troublesome at the moment, with high interest rates that are expected to continue to rise, if individuals cannot find a way to reduce or eliminate balances, they could face significant financial challenges in the future.
Many credit cards already come with high interest rates, which could make carrying a revolving balance somewhat risky. However, these rates will only continue to rise as the federal funds rate increases, which is expected to occur as many as three more times this year alone. These increases can have a direct impact on interest rates in a variety of lines of credit, such as those pertaining to credit cards and home equity loans.
When seeking to cut down on debts, an individual might find it advisable to revisit his or her previous plans and place more focus on debts that will be affected by these changes. As interest rates continue to increase, paying off credit card balances can become more and more challenging. Those who are only able to make the minimum payments on such balances may find that most of their payments go directly toward interests, and their balances could continue to rise.
Staying in control of finances is an essential goal for many individuals, but it can also prove a daunting task. Those who have concerns about their financial future could speak with a bankruptcy attorney for guidance on the options that are available to them. An attorney in Oregon can provide a client with advice in forming a plan to reduce or eliminate debts such as those pertaining to credit card bills and pursue a brighter financial future.
When it comes to certain issues in life, admitting there is a problem may be the first step in seeking relief. The same could be true for debts, as one might find it difficult to pursue relief without addressing the issues at hand. However, simply acknowledging the issues may do little to solve them, and individuals in Oregon who face substantial amounts of debt could find it beneficial to speak with a bankruptcy attorney for advice on their available options.
In some situations, debt may be viewed as a necessary part of life. Individuals may take on debt under a variety of circumstances, ranging anywhere from the purchase of an automobile to a home. However, debt can also come from sources that one doesn't plan for, such as a medical emergency or a loss of employment. Regardless of how it happens, when an individual finds his or herself facing significant monetary troubles, the need to pursue relief could be dire.
Upon recognizing that one's debts are an issue, a person could begin to form a strategy to cut down on his or her debt load. This can include cutting back on expenses and making greater payments on high interest debts. However, even the best made plans might not be enough to tackle some financial issues, and in these situations, further assistance may be required.
When facing the hardships that can accompany substantial amounts of debt, a person could find it invaluable to seek guidance before deciding on a path. By speaking with a bankruptcy attorney, one could obtain advice on every option available. An attorney in Oregon can thoroughly examine a client's circumstance and provide advice on how to pursue relief from debts through the necessary outlets.