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Rochester New York Bankruptcy Law Blog

Bankruptcy increases in older generations

Throughout the last decade, the American economy bounced from the most significant financial depressions in 2008 to one of the most profitable days in the DOW's history in 2018. But what effect has this shift had on older Americans?

Unfortunately, a recovering economy does not necessarily mean improvement for everyone. According to the Economist, the portion of all bankruptcy filings "made by people over the age of 65 has climbed from 2 percent in 1991 to 12 percent between 2013 and 2016."

Why are credit cards necessary after bankruptcy?

Filing for bankruptcy often feels like a massive defeat because you cannot solve your outstanding debts by yourself. You have to use bankruptcy as a way to alleviate the stress of creditors and credit cards bills piling up at your door.

But bankruptcy is not a defeat rather a great first step in rebuilding your credit score and bringing stability to your finances. Once you finally pay off your debts, you should reconsider incorporate credit cards back into your life in a responsible manner.

Americans are carrying a lot of debt: Here's how much at each age

The vast majority of Americans are carrying a large amount of debt. Even though they're trying their best to get out of it, they can't seem to shoulder the burden of becoming debt free. Of course, there are exceptions to the rule, but the average American is not debt free, so if you're currently struggling with a serious debt situation, you're not alone.

The question is: How much debt are American's carrying? And, does this amount of debt change on the basis of age? Keep reading to learn how much each age category in the United States owes to banks, mortgage lenders, auto loan providers, credit card lenders, student loan providers and more.

Does bankruptcy affect child support obligations?

Even loving parents who want the best for their children face hard financial times that make it very difficult or impossible for them to meet all their obligations. This not only throws the needs of the child into crisis, but may produce crisis in every area of a struggling parent's finances.

Bankruptcy is often an excellent solution for individuals who need debt relief, but it is always important to understand how bankruptcy affects different types of debt before filing under one chapter or another. If you hope to reduce your owed child support through bankruptcy, or if your child's other parent attempts to do the same, you may have a very unpleasant surprise in the near future.

Yes, you have the power to stop foreclosure

If you receive a foreclosure notice by mail, it means the bank is serious about repossessing your home. As scary as it may be, this doesn't mean you're going to lose your home in the immediate future. The bank must take multiple steps to repossess your property, which provides you with the time necessary to stop the process.

The way you attempt to stop foreclosure is your decision, and here are some ideas to consider:

  • Make back payments. The easiest way to stop foreclosure is to make back payments, thus giving the bank no reason to move forward with the process. This is easier said than done, but if you have the money it's the best step you can take.
  • Foreclosure workout. Most lenders are more than willing to work with borrowers, as they aren't in the business of repossessing, managing and selling real estate. Don't hesitate to contact your lender to discuss every available foreclosure workout.
  • Short sale. There are many pros and cons of a short sale, but the way it works is simple. The bank agrees for you to sell your home for less than what you owe. Once this happens, the property is no longer yours and there is no record of a foreclosure on your credit report.
  • Deed in lieu of foreclosure. This is exactly what you think it is: you sign the deed of your home over to the bank and walk away. Lenders don't always like this option, but it's something to ask about nonetheless.
  • Bankruptcy. Through a bankruptcy filing, you're able to stop the foreclosure process for the time being. Once you file the necessary paperwork, your mortgage lender is no longer permitted to take action. This gives you time to get things in order, but remember you only have so much time to figure out how to save your home.

How will bankruptcy impact your future credit?

It doesn't take long to fall behind on payments to creditors. Maybe the balance on your credit card has been slowly going up for months because your living expenses exceed your income. Perhaps you experienced an unexpected illness or got into a car accident that left you unable to work. Serious medical conditions, like cancer, with expensive treatments, could also create an insurmountable pile of debt for your household.

When you're unable to make payments on every bill and you're facing collection efforts, it may be time to consider bankruptcy. Bankruptcy can help you by forgiving your unsecured debts and helping you get your financial situation back under control. However, many people worry about the potential impact of bankruptcy on their credit report. Educating yourself about how bankruptcy affects your credit can help you decide if bankruptcy relief is a good option for your situation.

Living on credit can mean facing aggressive collection efforts

There is an assumption that bankruptcy protections are only necessary for those who have extremely low income. This population is certainly at risk of overwhelming debt, which is why Chapter 7 bankruptcy exists. If someone's income is below the state average and their debt is high, Chapter 7 bankruptcy can help that person build a new start. However, debt issues are common among those with higher incomes as well. Overspending is a common issue.

The more prestigious your position, the greater the potential temptation to live beyond your means. You may feel like you need to "keep up with the Joneses" by driving an upscale vehicle, wearing designer clothing or living in a massive home. In time, however, your attempt to fake it until you make it could leave you unable to meet your monthly financial obligations.

How can I modify my mortgage in New York?

There can be many reasons for wanting to modify your mortgage loan in New York. Perhaps you are struggling to pay for your repayments, have encountered a change in lifestyle such as a loss of job or increased medical costs or you want to dedicate your income to other priorities.

It is possible to modify your mortgage so that the repayments are less, but it's important to consider whether this is a wise idea since this will likely mean a prolonged mortgage repayment period.

Advantages to filing under Chapter 13

When debtors begins to consider bankruptcy, it usually doesn't take too long for them to discover that Chapter 13 offers many of the same protections and debt relief of other bankruptcies, without requiring those who owe to get rid of all their property. While Chapter 13 is not available to all debtors, those who qualify may find that it offers the flexibility they need to get their finances back on track without starting at ground zero, financially speaking.

If you are interested in filing for bankruptcy, be sure that you fully understand the intricacies of the Chapter that you choose. Failure to understand the issues at hand or properly navigate the process can create an even larger financial disaster than the circumstances that pushed you to bankruptcy in the first place, so this understanding is important to prioritize. An experienced bankruptcy attorney can help you assess your finances and create strategies to protect your rights and the property that you most value.

Peter R. Scribner, Esq | 1110 Park Avenue | Rochester, New York 14610
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