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Eugene Bankruptcy Law Blog

The potential risks of carrying a revolving credit card balance

Many individuals in Oregon and elsewhere have chosen to turn to lines of credit for aid in times of financial trouble at some point in their lives. While this may offer some relief, the effect could only be temporary and leave an individual in a more challenging situation in the future. Those who suffer under the weight of credit card debt might find it beneficial to consider exploring a solution instead of a temporary fix, such as filing for bankruptcy.

According to reports, almost 30 percent of those who took part in a recent survey admitted to carrying a credit card balance. Nearly half of them assert they have carried that balance for a minimum of two years. When asked about the reasons for carrying a constant balance, the most prevalent answer given by those surveyed pertained to keeping up with every day expenses.

Overcoming the burdens of debt through Chapter 7 bankruptcy

Constantly dealing with overwhelming amounts of debt can place a substantial financial weight on a person. Individuals in Oregon and elsewhere who experience the strains of debt may wish to pursue relief, but with little to no experience in the area, they may be uncertain where to turn for advice. Those who are facing similar circumstances could benefit from seeking guidance on the potential advantages of filing for Chapter 7 bankruptcy.

While there are numerous available options for those experiencing severe financial hardships, Chapter 7 bankruptcy is one of the more prevalent options with which to seek relief from debts. However, some may have a certain level of reservation concerning the process, which may in part be due to the liquidation of assets. While this type of bankruptcy does call for the liquidation of certain assets, this doesn't necessarily mean all of them, and a person might be able to retain many or most of his or her possessions after filing.

How bankruptcy affects credit scores: a timeline

Most Americans experience some type of financial trouble in their lifetime. Struggling through the loss of a job, an unexpected illness or mounting credit card debt causes instability throughout your life. While most people are aware of bankruptcy as a potential solution to debt problems, they worry about personal credit scores and long-term consequences of filing for bankruptcy.

A study by economist Paul Goldsmith-Pinkham charts credit scores before and after filing. The timeline is a clear illustration that credit scores are usually at their lowest before someone files for bankruptcy, not after. Typically, consumers go deeper into the debt and their rating drops in tandem with their borrowing. The rating rises slightly upon filing because debt is discharged at that time. After this, scores usually slowly rise for the next seven to ten years, with another bump when the bankruptcy comes off your credit report entirely.

Bankruptcy: Potential health concerns of dealing with debt

Many individuals in Oregon and across the country have experienced periods of financial struggle at some point in their lives. While the stress of monetary hardships can be challenging enough on its own, studies suggest that constantly dealing with heavy debt loads could also be harmful to one's health. Those who place a great deal of importance on their well-being may wish to avoid any potentially devastating consequences by exploring the options for debt relief, such as bankruptcy.

Debt can come in numerous forms, each of which can place a person under a substantial amount of stress. According to studies, those who experience prolonged periods of stress could develop deeper mental issues, such as anxiety and depression. Furthermore, stress may also have an impact on one's immune system, potentially inhibiting his or her ability to combat illnesses or infections.

Retiring without the burdens of debt through bankruptcy

Many individuals in Oregon and elsewhere have placed a great deal of thought into their retirement. With years of saving and planning under their belts, one might not want to let anything affect his or her preferred retirement age. However, with consumer debt on the rise, many are entering this period of life with overwhelming financial burdens, some of whom may find it advisable to consider the potential benefits of filing for bankruptcy.

Mortgage and credit card debt are a serious concern for many, and each can have a significant impact on one's ability to retire. With the high interest rates of credit cards, even those who have invested in their future can fall behind, as monthly dues may take up a substantial portion of the benefits he or she receives. Dipping into retirement accounts to pay for debts can prove detrimental to the future, and may only be a short-term fix to the issues at hand.

Weighing the options for relief when credit card balances soar

There are numerous circumstances in which an individual could begin to experience difficulty keeping up with monthly expenses. Many individuals in Oregon and elsewhere carry credit card balances that may be manageable at first, but should one fall behind, the outcome could be disastrous. When similar accounts are past due, interest rates can soar, potentially leaving a person in dire financial straights and in need of relief.

Credit cards offer certain advantages to consumers that may be appealing at the time, and the potential downsides of falling behind on payments might be easily overlooked. According to reports, credit card debts across the nation have recently reached all-time heights. For many, this could be exceedingly troublesome, especially since these particular lines of credit are generally subject to much higher interest rates than others.

Reforms in report of medical debt beneficial to some, not all

With the extensive costs of health care treatment, many individuals in Oregon and elsewhere have experienced the strain of financial difficulties following a medical emergency. Significant amounts of medical debt can be a heavy burden, leaving many in need of relief. While recent changes to how such debts are reported to credit bureaus may help some, others may continue to struggle with monetary obligations, and a more long-term solution may be in order, such as filing for bankruptcy.

Perhaps one of the most challenging aspects of medical debt is the fact that a health care issue can spring up at any moment, and with the high cost of care, one procedure can leave an individual with an insurmountable amount of debt. Recent reforms have delayed the time between treatment and the listing of bills on one's credit report, and if a person's insurance company pays the bill, it will also be removed from his or her credit. However, for those who cannot afford to pay and for procedures that aren't covered by insurance, this may do little to solve the issue.

Consumer bankruptcy and its impact on assets and debts

Many individuals in Oregon and across the country consider their financial future to be of the utmost importance. When facing substantial monetary hardships, one who wishes to protect this area of life may subsequently wonder about the available options for relief. For those who consider Chapter 7 bankruptcy, there are several factors that may influence their decision, and seeking guidance could prove beneficial to navigating the process.

Perhaps one of the most intimidating aspects of a Chapter 7 bankruptcy involves the liquidation of assets. While this type of bankruptcy does call for liquidation, this doesn't necessarily include all of one's belongings. Certain assets may be exempt from the process, and gaining an understanding of federal and Oregon state bankruptcy laws could help an individual make informed decisions regarding his or her financial future.

Alternatives to bankruptcy might not be as good as they seem

For those experiencing periods of financial struggle, there may be numerous available options to assist an individual in pursuing debt relief. However, when researching each in turn, one might want to proceed with caution, as certain avenues may do more harm than good. Instead of rushing into a settlement agreement, individuals in Oregon and elsewhere might find it beneficial to consider seeking guidance on the benefits of filing for bankruptcy.

At first glance, the idea of settling debts could seem exceedingly appealing, but the reality may not be as ideal as one might think. A similar arrangement could have downsides that aren't immediately apparent, such as income taxes assessed on the amounts forgiven. It can also take numerous years to complete a settlement, during which interest rates and fees could bring the total back up to around 90 percent of the original amount owed.

Giving a fair amount of thought to the process of bankruptcy

There are a variety of circumstances that can lead individuals in Oregon and across the country to experience financial hardships. Regardless of how a person reaches this point, a significant amount of debt can have a substantial impact on his or her quality of life, which could spark a need for financial relief. However, when exploring the available outlets, some may wonder if bankruptcy is the correct path in which to pursue relief from the burdens of debt.

While many have chosen to pursue a healthier financial future via bankruptcy, it may not be the correct decision for everyone. Before one can even file for bankruptcy, he or she must take part in credit counseling, which could help one identify areas for improvement. Although this process may be mandatory, a person might find it beneficial to give the available options a fair amount of thought, as any decisions made during this period could have a significant impact on the future.

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The Law Office of Kim Covington

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1445 Willamette Street, Suite 9
Eugene, OR 97401

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Albany, OR 97321

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1701 West Harvard, Suite 201
Roseburg, OR 97470

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