Tag: Kingcade

Credit Card Debt

Credit Card Delinquencies Exceed Pre-Pandemic Levels

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Americans owe a whopping $1.13 trillion on their credit cards. The total increased by 4.6% in the third quarter of 2023.  When it comes to credit card debt, consumers are maxed out.

All stages of credit card delinquency (30, 60 and 90 days past due) jumped during the third quarter of last year, surpassing pre-pandemic levels for the first time, according to a recent report by the Federal Reserve Bank of Philadelphia.

This means a number of consumers are revolving all or part of their credit card balance every month. As of the third quarter, 33.18% of accounts paid off their balance in full. That’s the lowest share since the fourth quarter of 2020, Philadelphia Fed data show.

A nearly three-year stretch of high inflation has sent consumer debt into overdrive. Towards the end of last year, outstanding credit card balances surpassed the $5 trillion mark for the first time, according to Federal data.  These rising delinquencies are becoming painfully expensive for many consumers. Interest rates are the highest they have been in two decades.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges.  It is not surprising with the high interest rates, unreasonable fees, harassing debt collection calls, penalties and never-ending minimum payments that do not even make a dent in your actual debt.

Filing for bankruptcy is a viable option for those struggling with insurmountable credit card debt. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills, and personal loans.  There are certain qualifications a consumer must meet in regard to income, assets, and expenses to file for Chapter 7 bankruptcy, which is determined by the bankruptcy means test.

SOURCE: Credit Card Delinquencies Surpass Pre-Pandemic Levels – CNN (January 11, 2024)

Credit Card Debt

Cities with the Most Credit Card Debt

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The average person has more than four different credit cards in their wallet, according to WalletHub’s proprietary data. People in some cities have more cards than others. The average in the top cities being over six cards per person. To determine the cities where credit card ownership is increasing the most, WalletHub analyzed the latest consumer-finance data across four key metrics. These metrics measured the average number of credit cards owned per person and average number of new cards opened per person in Q4 2023, as well as the percent change in both of those numbers from Q4 2022.

In total, Americans have over $1.2 trillion in credit card debt as of Sept. 30, 2023. Miami ranked No. 1, with an estimated payoff time of nearly 111 months — over nine years on average. Some of the reasons for the enormous timeline are the city’s high median credit card debt ($3,106) and relatively low median earnings for workers ($38,823), researchers explain. Several other Florida cities ranked near the top of the list for the least sustainable credit card debt, including Port St. Lucie (No. 4), Cape Coral (No. 5) and Tallahassee (No. 10).

If a person is struggling with credit card debt and is unsure of which route to take, it is always best to consult a legal professional to discuss his or her options. An attorney can look at the person’s situation and can advise him or her on whether bankruptcy is appropriate or whether other options are best.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges.  It is not surprising with the high interest rates, unreasonable fees, harassing debt collection calls, penalties and never-ending minimum payments that do not even make a dent in your actual debt.

Filing for bankruptcy is a viable option for those struggling with insurmountable credit card debt. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills, and personal loans.  There are certain qualifications a consumer must meet in regard to income, assets, and expenses to file for Chapter 7 bankruptcy, which is determined by the bankruptcy means test.

Click here to read more.

Sources:

Cities with the Most Credit Cards (wallethub.com)

Cities with the least sustainable credit card debt (wallethub.com)

Credit Card Debt, Debt Settlement

Why Debt Settlement Is the Wrong Way to Go When Dealing with High Credit Card Debt

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When someone is struggling with high credit card debt, it can be easy to take any offer that promises to eliminate that debt. This is why so many debt settlement companies exist. These companies are often referred to as “debt relief” or “debt adjusting” companies, and their claim is they can negotiate directly with the consumer’s creditors to reduce the amount he or she owes. However, when it comes to dealing with high credit card debt, working with a debt settlement company is not always the best plan.

During the debt settlement process, the consumer will stop making payments on his or her credit card debt in hopes that his or her creditors will settle for less than what is owed and will negotiate with the debt settlement company. The problem is, creditors are not bound to work with the debt settlement company, and this process can often take years to complete.

student loan debt

Biden’s New Plan for Student Loan Forgiveness

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President Biden has a ‘Plan B’ lined up for student loan forgiveness, which looks significantly different from the first plan.

His original plan, which was recently blocked by the U.S. Supreme Court, would have cancelled up to $20,000 in student loan debt for tens of millions of borrowers. Following the ruling, the President created a Student Loan Debt Relief Committee to create an alternate plan.

The President’s original plan impacted nearly 40 million American borrowers, but the new plan will be narrower in reach. The original, which covered more than 90 percent of federal student borrowers, will now cover just 10 percent.

Credit Card Debt

Can Credit Card Debt Be Written Off?

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According to the U.S. Government Accountability Office, the amount of credit card debt consumers face has reached a record high with consumers owing more than $1 trillion to credit card companies. It comes as no surprise that many people are looking for ways to escape their debt, if at all possible, which leads one to the question: is it possible to get credit card debt written off?

The answer is yes, but it is not a simple yes. The process can involve negotiations with credit card companies or debt collection agencies or even legal proceedings.

Credit Card Debt

Ways to Avoid Christmas Credit Card Debt

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It can be easy to fall deeper into debt during the holiday season. Those celebrating the holidays are four times more likely to expect to spend the most money on gifts for family and friends (80%) compared to dining out (21%), social events (20%), travel (17%) and holiday decorations (16%) this year.

According to a survey by investment bank D.A. Davidson, 40 percent of American consumers are starting the holiday season with more credit card debt than they did a year ago, and 48 percent of them will end the holiday with even more debt. The fact that average credit card interest rates are at an all-time high doesn’t help.

Bankruptcy Trends, Business Bankruptcy, Consumer Bankruptcy

Bankruptcy Filings Increase by 13 Percent Despite Historic Low Level of Filings

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According to statistics from the Administrative Offices of the U.S. Courts, the total number of bankruptcy filings increased by 13 percent in the 12 months ending on September 30, 2023. Business bankruptcies during this time increased by approximately 30 percent.

Annual bankruptcy filings were 433,650 as of September 30, 2023, as compared to the 383,810 in September 30, 2022.

Factors contributing to the uptick in filings include rising interest rates and inflation.

Bankruptcy Law, Consumer Bankruptcy

Should You Hire a Bankruptcy Attorney?

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Bankruptcy can be a stressful and complicated process, but it doesn’t have to be something you do on your own. While consumers can pursue a bankruptcy case on their own, or file bankruptcy pro se, without the assistance of an attorney, it is not always wise to do so. In fact, the benefits of hiring an attorney far outweigh the negatives in the long run.

According to the American Bankruptcy Institute, less than 50 percent of filers who pursued a Chapter 7 bankruptcy case without the assistance of an attorney had their debts discharged. Alternatively, 94 percent of filers represented by an attorney had their debts discharged.

Credit Card Debt

How to Respond If You Are Sued for Credit Card Debt

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Most consumers utilize a credit card at some point in their lives, and many of them carry credit card debt from month-to-month. The amount of credit card debt carried by consumers is growing. It is estimated that around 23.5 percent of all Americans struggle with some type of debt in collections status, according to the Consumer Financial Protection Bureau (CFPB), and much of this debt involves credit card debt. If a consumer is on the receiving end of a collections lawsuit for credit card debt, it is important to know how to respond.

A collections lawsuit can vary, depending on the jurisdiction, but, the steps are all fairly uniform. The first thing to expect is the consumer will receive a complaint filed in civil court, along with a summons. This summons should contain a number of important pieces of information including who is suing the consumer, whether any additional co-defendants are a part of the lawsuit, how much money the creditor is attempting to seek, which can include the balance owed, along with interest fees and legal fees, the date of the hearing, and how to file a formal answer or response to the complaint.

Bankruptcy Law

What Debts Are Not Discharged in Bankruptcy?

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Bankruptcy offers people who are overwhelmed by debt an opportunity for a financial fresh start, either through liquidation (Chapter 7 bankruptcy) or reorganization (Chapter 13 bankruptcy). However, not all debts are eligible for a bankruptcy discharge. In our latest blog, we delve into what kind of debts are not alleviated when you file for bankruptcy, and what kind of debts can be more difficult to discharge.

Child Support and Alimony

Child support and alimony are debts that will stay with the filer even after a bankruptcy discharge is issued.  The reason for this classification as nondischargeable debts has to do with public policy. These debts involve obligations to support dependents, and the court views these as important, which is why they must be fulfilled to provide for the well-being of the filer’s dependents.