Thompson Law Group, P.C.

Warrendale, Pennsylvania, Bankruptcy Law Blog

Chapter 13 bankruptcy can be the key to saving your home

There are a few things that everyone in Pennsylvania needs, and one of those is keeping a roof over your head. You probably felt like you were securing that need when you purchased your home. Now that you are facing foreclosure, your biggest priority should be saving your home. Bankruptcy tends to be depicted as a pretty negative process on TV and in the movies, so you might not understand that filing for bankruptcy is one of the best options for stopping foreclosure.

It is very easy to find yourself buried underneath debt, and it is even harder to dig yourself out. Your lender could already be foreclosing on your property by the time you realize how many monthly payments you have missed. But if you choose to file for Chapter 13 bankruptcy, your lender will have to at least temporarily stop pursuing this action. 

Overspending contributes to credit card debt

Overspending is not uncommon, but that does not mean it is harmless. Even spending a little bit extra here and there can quickly build up, leaving people with more credit card debt than they can handle. Even Pennsylvania consumers who budget struggle to get their spending under control.

Research from Slickdeals found that 74% of consumers create budgets. But creating budgets is not helpful if nobody sticks to them. That same research shows that 79% of people with budgets still overspend, and not by trivial amounts either. On average, people spend $143 more per week than they budgeted. This adds up to an extra $7,400 a year.

Saving the car when auto loan terms are too long

New and used cars alike often cost tens of thousands of dollars, and the vast majority of people just do not have that kind of cash on hand. Auto loans make it easy for the average person in Pennsylvania to get a secure form of transportation. While it might be reassuring to know that a large number of consumers are paying back their loans just fine, someone who is struggling with repayment might be more interested in methods for saving the car.

There are expected to be approximately 17 million light-vehicle sales in 2020. Although this marks the fifth year of sales of 17 million units or more, it is also about a 2% decrease from 2019. One of the reasons behind that decrease could be the rising cost of vehicles. The typical transaction price for a vehicle is already over $35,000 with auto loan terms of around 68 or 69 months. As transaction prices push past $35,000, loan terms are also expected to lengthen.

Is credit card debt part of your New Year's resolution?

American consumers are carrying an astounding $4 trillion in debt in 2019, more than any other time in history. Whether for things like auto loans or credit card debt, it seems as if consumers in Pennsylvania are more than ready to improve their financial situations. Unfortunately, this is usually easier said than done.

People are already thinking of their 2020 resolutions, and financial goals are the most popular choices for this upcoming New Year's. In fact, 84% of the 3,012 adults who participated in Fidelity Investments' 2020 New Year Financial Resolutions Study said that reducing debt was a better resolution than spending less time on phones and computers. In that same study, 84% said that they would rather save $5,000 than drop 5 pounds.

Chapter 12 bankruptcy helps fishers and farmers in the U.S.

Chapter 12 bankruptcy is relatively new, so it's not surprising that you may not have heard about it previously. This kind of bankruptcy is only available for family fishermen and family farmers.

It's a similar form of bankruptcy to Chapter 13, but it is more flexible with a periodic payment schedule due to the seasonal nature of the two kinds of work. With a Chapter 12 bankruptcy, farmers or fishermen propose repayment plans lasting between three and five years.

Holiday shopping could add to credit card debt

The holiday season puts a lot of pressure on Pennsylvania residents. People are expected to participate in work events, attend parties and exchange gifts with both family members and friends. Even if someone is doing his or her best to cut back on spending and get debt under control, societal pressure can make it much easier to slip back into credit card debt.

Experts believe that online purchases are likely to hit around $144 million this 2019 holiday shopping season, which would break past records. Total holiday shopping is expected to be much higher. Unfortunately, some of the consumers who are making these purchases do not have the cash on hand to do so. Instead, they will rely on credit, including store credit cards. 

Saving the car is possible, even with negative equity

In today's world, owning a car is more of a necessity than a luxury. Motor vehicles are not cheap, though, and few people in Pennsylvania have the ability to purchase them outright. Most people turn to auto loans instead. Unfortunately, the state of the auto loan industry is not great, and piles of debt can threaten a car owner's ability to keep his or her vehicle. For these people, saving the car from repossession is often a priority.

Consumers purchase and trade in vehicles for any number of reasons. For example, a car might no longer be in good working condition or have an expensive upkeep cost. A person might also simply want a new car, which is another common reason for visiting a dealership. Unfortunately, no matter the reason behind a new purchase, it can cause problems if someone has not already paid off his or her loan for the vehicle being traded in.

Consumers struggling with credit card debt, student loans

In general, most people in Pennsylvania are just doing the best they can to manage their finances. Money matters can be complicated though, and it is easier to get into debt than many realize. This is especially true when it comes to things like credit card debt and student loans.

Consumers use credit cards for a lot of different reasons. But no matter how people amass their credit card debts they almost all have something in common -- trouble paying off those balances. Americans owe a collective $868 billion on their credit cards, which is nearly 5% more than in 2018. Credit card delinquencies are also on the rise.

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.

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