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Richmond Virginia Bankruptcy Law Blog

How to obtain debt relief

Virginia residents and others who are dealing with credit card or other types of debt may consider filing for bankruptcy to eliminate existing balances. This may be especially beneficial for those who have limited incomes. However, other options exist that some people may want to consider as well. For instance, it may be possible to convince a creditor to forgive some or all of a debt, and this can be done either with or without an attorney. However, it is sometimes easier to get a favorable outcome with the assistance of legal counsel.

Of course, individuals could be required to pay taxes on the amount forgiven. This is generally not the case when a debt is discharged through Chapter 7 bankruptcy. Filing for bankruptcy can also be ideal for those who are looking to get out of debt quickly and start rebuilding their credit history. Most people can get a secured credit card as soon as their cases are complete.

Debt consolidation loans can actually make your debt issues worse

People dealing with overwhelming or unsustainable levels of personal debt are often eager to find a solution that can help them pay off what they owe quickly. Companies know there is a demand for debt relief, and they are always ready and willing to make a profit off of people struggling financially.

Some people find themselves falling victim to payday loan schemes, where short-term lenders offer them cash advances for an exorbitant interest rate. Many individuals who start using these services find themselves trapped and forced to continue to take out new advances just to repay the company they borrowed from. Other than the predatory fees associated with payday loans, their big issue is that they only help people meet certain financial demands without helping them address their debt.

Financial realities for today's older Americans

Millennials may be a large part of today's population but the vast number of people who are 65 or older in Virginia and all around the United States is large and growing as well. While 65 was long heralded as the age at which a person retired, that seems to be far from the case for a great number of people in modern society. There appear to be several reasons that contribute to this fact.

One concern shared by all too many people over 65 is a serious level of debt. A survey conducted by the Consumer Bankruptcy Project found that the rate of bankruptcy filings for Americans 65 and older has jumped by a whopping 300% in the last 28 years. If a person has been forced to file for bankruptcy, the thought of retiring may be something they simply have to put out of their mind for a while.

Bankruptcy: A learning experience and motivational tool

When people realize that bankruptcy is their last resort and most likely the decision they will need to make in order to get rid of overwhelming debt, they may feel defeated and worried about their future. While bankruptcy has its pros and cons like anything else, for people struggling with significant debts in Virginia, it can actually be a valuable tool in helping them to get back on their feet and work their way toward an independent financial future. 

Bankruptcy is certainly not the end of the world and is not nearly as negative as many people make it out to be. If handled properly and with the understanding that lifestyle changes will need to be made to support a healthier financial future, people can actually benefit greatly from their decision to file for bankruptcy. Because there are different types of bankruptcy, each with different provisions and restrictions, it is important that people become educated about the general definition of each one so they can make a decision that will be most applicable for their needs and desires. 

Can joint custody be beneficial for your children?

Divorce is often a complicated process, especially when there are children involved. When parents choose to terminate their marriage, kids are unwilling participants and are subject to follow whatever is decided in the final divorce settlement. In some cases, children are forced to move into a sole-custody arrangement where they spend the majority of their time with one parent. Yet, multiple studies show that kids who spend a significant amount of time with both parents have advantages over children who do not. 

More than 33 studies have been conducted reviewing children who live in sole-custody, joint-custody and traditional family arrangements. Researchers found that kids in joint-custody situations experienced the following:

Controlling behavior and deciding to divorce

Marriages come to an end for a plethora of different reasons, such as physical abuse or an affair that resulted in gossip throughout the family (and even community). That said, some problems may be more difficult for others to detect, but they can still be very serious and may ultimately seal the fate of a marriage. For example, if someone is very controlling in their spouse’s life, their behavior may cause the marriage to fall apart. If you have a very controlling marital partner, you may be tired of the different challenges you have to face, and you may be considering moving on.

Controlling spouses can be difficult to live with, and they may control various facets of their partner’s life. They may monitor their spouse’s vehicle use, relentlessly bother them about them their day or the people they spend time with (such as friends). A controlling spouse may take their partner’s wages to use for themselves and they may prohibit someone from spending time with their relatives, such as their parents, siblings and other family members.

Medical expenses: A major cause of bankruptcy

When people file for bankruptcy, they are often seeking relief from a surmounting pile of loan payments, debt and expenses. Medical expenses, however, are one of the most common types of debt responsible for pushing people off the financial ledge. Whether they have just been diagnosed with a chronic condition or they are required to go in for an unexpected surgical procedure, people may find themselves with medical debt. Furthermore, people may not be able to work while they are recovering or may become disabled and unable to work at all. 

According to a study published in the American Journal of Public Health, nearly 70% of bankruptcies in the United States involved medical issues. Every year, more than 530,000 families struggling with medical bills file for bankruptcy in an attempt to regain control of their finances. 

Why payday loans don't get you out of debt

You have a job, a spouse and kids, yet you can't seem to get ahead of the mountain of bills coming your way each month. You've been robbing Peter to pay Paul — and it's caught up with you.

Now, you're faced with some tough dilemmas. It might be the decision whether to buy groceries or pay the utility bills or purchase necessary medications versus paying the mortgage. Either way, you are stretched so thin that something will have to give. You're looking desperately for a viable option and decide to take out a payday loan.

What is loan reaffirmation in a Chapter 7 bankruptcy?

When you file for Chapter 7 bankruptcy, you have the opportunity to discharge the majority of your debts and start again with a clean financial slate. Also referred to as liquidation bankruptcy, Chapter 7 may be beneficial for you if you are overwhelmed with credit card debt, mortgage payments, car loan payments, medical expenses and other bills that have been following you around for years. There may be, however, some property that you do not wish to part with once your bankruptcy is finalized. Whether you want to stay in your family home or want to keep your car, you may want to consider reaffirming your loan. 

A loan reaffirmation is an agreement made with a lender to repay some or all of a debt, even after you have declared bankruptcy. Rather than write off a loan to bankruptcy, you sign a contract to continue making payments, and are then able to keep the property associated with the loan. In many cases, the financial institution will make special arrangements, making it easier for you to make payments on the loan. You may receive a lower interest rate or a reduced monthly payment amount to help facilitate your agreement to make regular monthly payments. Not only does this allow you to keep the property, but lenders are able to collect the debt rather than have to lose money on the loan. 

The reality of bankruptcy among boomers

As the baby boom generation continues to age, they face new challenges that may not have been experienced by previous generations at the same stage of life. Many residents in Virginia and around the nation who are in the boomer group are plagued with serious levels of debt, forcing them to search for ways to get relief. There are different options available to consumers and for many boomers, a Chapter 7 or Chapter 13 bankruptcy may be the answer. 

Insider reported recently on a study that found a dramatic increase in the number of personal bankruptcy filings among consumers 65 and older in the past couple of decades. In fact, since 1991, these filings have increased by as much as 300%. This was based on a review of almost 900 consumer bankruptcy cases from people between the ages of 19 and 92 by the Consumer Bankruptcy Project.

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