Do not liquidate your retirement accounts to pay off debt that can be discharged in bankruptcy. Retirement accounts enjoy broad protections in a bankruptcy so it is not a good idea to cash them out. Do not take out an HELOC to pay off credit card debt that can be discharged in bankruptcy. Remember that credit card debt is unsecured debt meaning it is secured only by your signature, not collateral, a home or a car. If you pay off credit card with a HELOC, you not only risk losing your home if … [Read more...]
Deciding When to File Bankruptcy
If you are considering Chapter 7 bankruptcy protection, you may wonder if the timing of your bankruptcy matters. For most, the answer is yes. After all the goal, is to emerge from bankruptcy in better financial shape so discharging as much debt as you can is in your best interests. For example, if your financial situation has worsened because of medical costs related to an illness, you may want to wait until you have incurred the bulk of medical charges before filing bankruptcy so that they will … [Read more...]
Wages Not Keeping Up
Despite the fact that the economy is strong with unemployment down and millions of jobs going unfulfilled, many who are working just don’t earn enough to make ends meet. For many, wages have remained flat for decades making it difficult to keep up as the cost of living has increased across the country. Many Americans continue to turn to credit cards to bridge the gap, putting out one fire at a time as unexpected expenses pop up on top of everything else. With credit card debt cresting at $1 … [Read more...]
Trading Student Loan Debt For Mortgage Debt
With the average undergraduate leaving college with $30,000 plus of debt and with no plans to purchase a home anytime soon, mortgage lenders are starting to get more creative. Mortgage lender Fannie Mae, for example, has laid out a plan for student loan borrowers, and parents who have cosigned loans, to trade student loans for mortgages, offering incentives which might be worth a look. First, by expanding cash out mortgage refinance options, borrowers can roll a higher interest student … [Read more...]
Bankruptcy in Retirement
In a survey of older Americans regarding their reasons for filing bankruptcy, about three in five report medical bills played a role, over two thirds say a drop in income was to blame, and nearly three quarters were victims of creditor harassment that led them to seek protection. Looking at the median household of Americans 65 and older reveals that on average most have only 60K in liquid savings, with the bottom 25 percent deterring around 3K. More people are also entering retirement with … [Read more...]
Older Americans Filing Bankruptcy Protection Sooner Than Later
The rate of older Americans filing bankruptcy at age 65 and up is three times what it was in 1991. A perfect storm of declining income, reduced savings, increased out-of-pocket spending on healthcare and a shrinking social security safety net, has many older Americans seeking bankruptcy to stave off creditors and stay afloat. (Read Abstract: Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society) However, many older Americans tend to wait too long to file bankruptcy. Only after they … [Read more...]
Filing Bankruptcy Before or After Retirement?
If you are approaching retirement and are considering bankruptcy protection, you may have questions such as “what happens to retirement funds in bankruptcy before you retire?" Or, if you have carried debt into retirement and are considering bankruptcy after the fact, you may wonder if your disbursements will be up for grabs or even your social security benefits. As with any bankruptcy, filed at any age, timing can be a factor. Sometimes it makes sense to file right away while other times it is … [Read more...]
Seniors Fastest Growing Segment of Bankruptcy Filers
If you are not financially ready for retirement, you are not alone. In fact, according to a Federal Reserve study as many as one quarter of all Americans have no retirement savings or pensions. Even those who have managed to set money aside may not have enough to see them through. Seniors are the fastest growing segment of bankruptcy filers in the U.S. In fact, a 2010 study out of the University of Michigan found a threefold increase in the number of bankruptcy filers 65 and older since … [Read more...]
Zombie Debt Collection Harassment
When you are unable to pay a debt, the lender may eventually 'charge off' the debt if their efforts to collect it are unsuccessful. The calm that follows may end the torrent of harassing phone calls and demand for payment letters initially, but there is a strong possibility a debt collection company will buy the debt from the original lender and start the collection process anew. So-called zombie debt collection companies make their living from purchasing bad debt from companies at a fraction … [Read more...]
Qualifying for Chapter 7 Following a Job Loss
The Toys R Us bankruptcy liquidation sale is nearly over and, unfortunately, that means that roughly 30,000 employees will be out of work by the end of the month. Workers, many of whom have been with the company for years, say that they will not receive severance pay or be compensated for accumulated sick time, leaving many scrambling to find alternate work as quickly as possible. While some will be successful in landing on their feet following a job loss, particularly in the strong job … [Read more...]