Thompson Law Group, P.C.

Warrendale, Pennsylvania, Bankruptcy Law Blog

Credit card debt is making us sick

Debt is relatively common, and unfortunately, it is taking a toll on many people in Pennsylvania. From monthly bills to harassing phone calls from creditors, it is difficult to escape the constant worry over money. Often, the focus shifts to deciding what to do about it. According to one wellness expert, all that debt -- including credit card debt -- is making people sick.

Adults in America cite finances as their largest source of stress. Feeling anxious over money might keep some people up at night and could be making many others sick. Deepak Chopra is a wellness expert who says that stressing out over finances can cause an increase in blood pressure. Not only that, but financial stress can also cause migraines, heart disease, digestive problems and more.

Which chapter of bankruptcy protection should I file under?

Bankruptcy is definitely a complex process. The average consumer debtor can wind up very confused when trying to determine which chapter under which to file.

Of course, everyone's circumstances are different, so there is no one-size-fits-all response when figuring out which chapter affords you the most protections under the law. However, with that being said, below are some major differences between filing for bankruptcy under Chapter 13 versus Chapter 7.

Chapter 13 makes saving the car possible

Your car is much more than just a machine on top of four wheels. Like many other people in Pennsylvania, your car is the way that you access the outside world. Whether you are driving to work, picking up your child from school or transporting groceries back home, you need your vehicle to survive. That's why saving the car in the face of repossession is so important.

When you are behind or struggling with your car payments, losing the vehicle is a very real possibility. However, if you have reached the point where you can no longer make all of your monthly payments, then it may be time to consider Chapter 13 bankruptcy. Not only can this process help you address your other debts, but it can also help you keep your car during a very difficult time. Filing for bankruptcy will prevent a lender from repossessing your car even if you are behind on payments. If the vehicle is already repossessed but has not been sold yet, the lender may even have to give it back.

Are you impacted zombie credit card debt?

Debt collectors are supposed to adequately review all relevant information when pursuing legal action against consumers. This is supposed to prevent collectors from filing lawsuits for debt that is outside the statute of limitations or that has already been paid off. The Financial Protection Bureau should be making things even easier for people in Pennsylvania, but new rules could mean even more attempts at collecting so-called zombie credit card debt.

A zombie debt is one that has already been paid off but a collection agency is trying to collect payment on anyway. Back in May 2019, the CFPB proposed a new debt-collection rule that would make it even easier for collection agencies to pursue those zombie debts. The new rule would allow those agencies to take legal action against consumers without really checking to make sure that a debt is not past the statute of limitations or already paid off.

How to have safe walks with your dog in the fall

Autumn is a season where going outside might start to feel more challenging for dog owners in Pennsylvania. It’s slowly getting colder and you’ll start spending less time in the sun during your evening strolls.

As the season continues to change, you’ll start to encounter different hazards during your walks than you would in the summer. Your pet may no longer have to worry about burning their feet on the concrete, but both of you need to get ready for the cooler nights and potential distracted drivers. Here are some tips that can keep you and your little buddy safe as the leaves start changing colors:

Rising foreclosure rates shouldn't stop you from saving the home

If owning a home is the American dream, then facing foreclosure must be a nightmare. As foreclosure rates have gone up over recent months, some Pennsylvania homeowners might be worried that there are not any options when they are unable to make their mortgage payments. However, filing for bankruptcy can sometimes be helpful for saving the home.

In July 2019, foreclosure rates increased 6% for month-over-month. During that time, lenders initiated foreclosure processes for 26,055 property owners. The majority of the places that experienced significant increases in foreclosure are located along the East Coast, but major metropolitan areas were also affected.

Saving the car with Chapter 13 bankruptcy

For you, having a car is not a status symbol. Like many other people in Pennsylvania, your vehicle is your only form of reliable transportation, and without it you might not be able to get to work on time or pick your children up for school. If you currently have more debt than you can handle and worry that saving the car will be impossible, you may want to consider some of the following information.

Filing for bankruptcy might not be the first thing that springs to your mind when brainstorming methods for keeping your car. However, with Chapter 13 bankruptcy, you can possibly do just that. This is because rather than immediately discharge all of your debts, Chapter 13 restructures it.

Saving the home a struggle for middle-class families

The middle class was once seen as a stable place for Pennsylvania families. This might no longer be the case. Even individuals who earn steady, stable incomes that put them solidly in the middle class are struggling with more and more debt as time goes on. Although many believe that they can dig themselves out of that debt, this is simply not possible for some. Instead, focusing on saving the home and other important assets might be best addressed through personal bankruptcy.

Wages have not changed much over the past two decades, with the median income per household hovering around $61,372 as of 2017. Considering inflation, these wages are barely higher than in 1999. Despite stagnant wages, the cost of everything from medical care to higher education has skyrocketed.

Which generation struggles the most with credit card debt?

A decade or so ago, credit cards seemed to be one of the last things on millennials' minds. In 2012, only around 40% of millennials in their 20s had credit cards. As of 2019, over half -- 52% -- use credit cards to make purchases. Although it is not entirely clear why this generation shifted its opinion on credit cards, one thing is obvious -- they are having trouble managing credit card debt.

On top of carrying a collective $370 billion for student loans, millennials now have the largest share of seriously delinquent credit card balances. About 8% of balances were categorized as such in 2019's first quarter. However, student loans and other financial practices could part of the reason that millennials in Pennsylvania struggle with financial literacy. Considering that as many entered college, both institutions of higher learning as well as the government aggressively pushed student loans, claiming that the loans were a type of financial aid that would help them get an education.

Can I pay off my credit card debt with a personal loan?

For many Pennsylvania consumers, credit cards help bridge the gaps between paychecks. Others find credit cards useful for making large purchases. Some people simply find it convenient to swipe a card without worrying about the remaining balance. However, credit card debt can quickly spiral out of control, and paying the balance off can end up feeling like an impossible task. Bankruptcy can be an effective option for many individuals in this situation, but personal loans could also help certain people.

Consumers who carry balances on multiple credit cards usually end up struggling to make their various minimum payments. Transferring the balances to either a single card or as few as possible can make it easier to tackle those minimum payments, but it is far from the most effective solution. Credit cards generally have high interest rates, which is one of the reasons they are so difficult to pay off.

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