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Eugene Bankruptcy Law Blog

Why bankruptcy is more common as people age

In Oregon and throughout the country, older Americans are filing for bankruptcy at a higher rate than their younger counterparts. Part of the reason is that government benefit programs such as Social Security are replacing a lower portion of a worker's income after retirement. At the same time, health care costs are going up, which can further strain the finances of someone 65 or older.

It has been noted that the age group most likely to seek bankruptcy protection today has also been most likely to seek such protection in the past. According to the Consumer Bankruptcy Project, the age group with the highest level of bankruptcy filings in 1991 was between the ages of 25 and 44. Between 2013 and 2016, those same individuals were in the age group most likely to to do so. At that time, they were between the ages of 45 and 64.

Why is January 19 the most depressing day? Blame your debt

It is a day in January that has been calculated to be so depressing, it not only has been designated as the most depressing day of the year, but it has its own name. It is known as Blue Monday. That day this year falls on Monday, January 19.

If you are wondering how such a thing can be calculated, while it may not be the most scientific, there is a formula to it. The formula considers these factors:

Chapter 13 bankruptcy and the repayment plan

Oregon consumers who are considering filing for Chapter 13 bankruptcy might wonder what is involved in the repayment process. To file for Chapter 13 bankruptcy, it is necessary to go through the means test, which is income-based, and may have assets they want to keep. This might include the house. A Chapter 13 bankruptcy involves paying off debts over three or five years. Working with an attorney, the debtor creates a repayment plan that is then submitted to the bankruptcy trustee for approval. Many unsecured debts that remain at the end of the repayment period are discharged except for those that are not eligible. Among these are child support payments.

In general, the priorities are considered to be debts such as back taxes, alimony and child support. Secured debts, such as mortgages, come after this. Finally, there are unsecured debts. This includes medical and credit card debt.

Report finds Americans using credit cards more

Consumers in Oregon and across the U.S. are increasing their use of credit cards, according to a new report by CompareCards.com. In fact, the website found that Portland residents have the 10th highest credit card balance average in the country.

For the report, CompareCards.com analyzed credit card data from consumers in the top 50 U.S. cities. Researchers found that credit card balances grew an average of 3.6 percent over the last 12 months. However, some cities saw averages balloon more than 10 percent during the same period of time. Consumers in Austin, Texas, had the highest average credit card balance increase in the country. In September 2017, they averaged $6,165 in credit card debt. However, by September 2018, their average debt was $6,924, a spike of 12.3 percent.

Did the holiday season set you back?

Through the holidays, you probably didn’t think much about money as you tried to make the season merry for your kids. It’s the struggle every parent faces each year, regardless of how many or few presents they buy. We just want our kids to be happy. However, the day that first credit card statement comes in can still hit hard.

If you are still struggling to pay those bills, here are four tips you can follow to help get out of credit card debt.

Will filing for bankruptcy stop wage garnishment?

When you have serious debt, you may feel like you will never get ahead. Even if you pay the bare minimum on all your bills, you can still fall behind. When that happens, your creditors may resort to extreme measures to get their money.

Perhaps one of your creditors secured a court order to garnish your wages. Wage garnishment is only going to make your struggle to pay bills worse. You wonder if it is time to file for bankruptcy, but you are unsure if that will stop wage garnishment. Here is what you need to know about wage garnishment and bankruptcy.

What to know about business credit card debt

For business owners in Oregon and throughout America, credit cards make it possible to stay liquid. They can also provide a company with the capital it needs without having to ask for a traditional business loan. However, if a business isn't generating enough revenue, it can be difficult to pay down the balances accrued on those cards. In some cases, it is difficult to keep up with the minimum monthly payments.

When this happens, a business owner may not be able to grow his or her business as fast or handle emergencies such as a customer cancelling an order. In some cases, business owners may not see their personal credit scores impacted by high business credit card balances. This is because these creditors don't report to anyone's personal account. Therefore, it might be possible to take out a personal loan or other type of loan based on a personal credit score.

Bouncing back from Chapter 7 bankruptcy

Many consumers who are struggling with debt in Oregon believe that filing for bankruptcy would make their problems even worse. This is not necessarily true for those with a lot of unsecured debt since many people who file for bankruptcy find that their credit scores begin to go back up quickly after bankruptcy.

A study by LendingTree found that 43 percent of debtors who filed for bankruptcy had a credit score of 640 or greater within a year after filing for bankruptcy. Within two years, 65 percent of debtors had a credit score above 640.

First credit card? Avoid these rookie mistakes

Getting your first credit card is a pretty big deal. After years of watching the adults in your life confidently talk about bills and credit scores, it's finally your turn to rise to the challenge. At the same time, it is easy to get swept up in the excitement of swiping away. While a credit card can help you make purchases you cannot afford, leaning on it as a source of affordability can land you more debt than you may be prepared for.

To save yourself unnecessary financial trouble, you may want to take note of the common mistakes first-time credit card holders make:

How the wage gap feeds into the debt gap

Oregon residents and others may be aware of the wage gap. However, they may not know that there is also a debt gap between men and women. On average, women have higher student loan, auto loan and credit card balances compared to men. Those who are trying to get out of debt should start by paying back the balances with the highest interest rates.

This generally means starting by paying down credit card or private student loan debt. In some cases, it may be necessary to get a second job or take on some sort of freelance work that can help generate extra income. Other ways to find money to pay back debt include living in a less expensive apartment or cutting back on other unnecessary items. Individuals will ideally create a budget to determine what their current expenditures are and how to cut back on them.

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The Law Office of Kim Covington is a debt relief agency, and I have helped families, individuals and small businesses, file for bankruptcy relief under the U.S. Bankruptcy Code, for over 19 years.

The Law Office of Kim Covington

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