Overall, the nation’s economy is in relatively good shape. This means that unemployment rates are down throughout much of Mississippi and the rest of the United States. However, there is a somewhat new phenomenon that is showing a darker financial picture for some Americans — there is a notable increase in bankruptcy filings for older individuals, particularly for baby boomers.
Anything that impacts the baby boomer generation, which represents approximately one-quarter of the population, is certain to have rippling effects throughout the entire economy. Economic researchers report that in the last 25 years, the rate of baby boomer bankruptcy filings has increased sixfold. The overall trend shows bankruptcy rates declining for those 54 and under yet dramatically increasing for the 55-plus group.
While any age group can be hit by major economic events, such as job loss or a family split, older people are unique in finding themselves transitioning into retirement. The combination of living longer, dealing with a decrease in social security benefits, less or non-existent pension plan benefits and far higher medical costs across the board places boomers and those nearing retirement at greater risk. Nothing occurring currently in the economy seems likely to change these trends in the near future.
Financial challenges can arise at any time in any one’s life. A fresh financial start may be possible with debt relief or a manageable payment plan. A bankruptcy lawyer can provide guidance and counsel in determining whether Chapter 13 relief would be appropriate under the specific facts and circumstances.
Many people living in Mississippi have concerns about credit card debt. While credit cards can be a useful tool in managing personal finances, consumers will sometimes run up balances that can be difficult to manage or pay off. In fact, a recent study has shown that the average household credit card debt in the United States is $8,284.
In many cases, consumers do not intend to run up significant debts. They use credit cards responsibly, and either pay their balances each month or make reasonable monthly payments. However, circumstances can affect an individual’s ability to pay their credit card bills. For example, someone may become ill, unemployed or face a major, unexpected expense such as a medical bill or home repair.
When people can’t pay their credit card bills or can only pay a minimum amount, balances will balloon due to interest rates and late fees. It can be very difficult to catch up, particularly if one is attempting to cope with a diminished income or other urgent financial obligations. Over time, the stress of trying to deal with creditors and pay bills can take a significant toll on a debtor’s health, marriage and family life.
Fortunately, people living in Mississippi have several debt relief options. These include bankruptcy as well as negotiating installment payments and debt consolidation. Homeowners who are concerned about making mortgage payments may also be able to avoid foreclosure through some similar strategies.
Debtors could benefit from speaking with an experienced attorney. The lawyer might be able to review the client’s current financial situation and make suggestions regarding debt relief options like bankruptcy and possible ways of avoiding foreclosure.
According to an article in Health Affairs, medical debt in collections peaks when individuals are in their late 20s. This is because younger people tend to make less money than those in their 50s or 60s. Furthermore, younger people are more likely to not have insurance. Even if a person has insurance, the policy likely comes with a deductible that an individual could have trouble paying. However, there are ways that those dealing with such debt in Mississippi and throughout the country can better manage it.
For instance, it could be possible to negotiate with a care provider to reduce the bill. This may work best for those who can provide detailed income and other financial information to demonstrate their ability to pay. A medical bill advocate may be able to negotiate on a patient’s behalf. In some cases, a substantial portion of the balance could be forgiven when going this route.
If that doesn’t work, a doctor or hospital may allow an individual to make payments each month. In the event that a bill is already in collections, there is a chance that the debt collector will take less than the amount owed to resolve the matter. Individuals who are searching for a way to pay down a medical debt could try to crowdfund the money or ask family members for a loan.
Those who are struggling to pay off a medical debt might benefit by filing for either liquidation or reorganization bankruptcy. Doing so may make it possible to put an end to creditor phone calls or other debt collection activities. This might mean keeping a home, car or other property that is secured with collateral. It may also mean that a creditor lawsuit could be postponed until the bankruptcy case has been resolved.
Bankruptcy is a scary reality for many people living in Mississippi. Fortunately, the rate of people filing for bankruptcy appears to decrease around the country. In particular, many older Americans over the age 65 no longer have to seek out bankruptcy.
It is vital to realize filing for bankruptcy is not the end. In some cases, it is the only way to take control of your financial future. However, you need to go through your bankruptcy the right way. Many people doom themselves from the start by making one of the following mistakes before or during the bankruptcy.
Avoid using your credit card
When you suffer from extreme credit card debt, it may seem like a good idea to rack up more debt in the months before you file. This is a poor decision because a judge may still require you to pay off a large portion of the debt if it looks like you tried to get recent purchases discharged from the bankruptcy. You should stick to making purchases through your debit card in the few months before you file.
Avoid transferring assets
A lot of people think they can protect some of their assets by giving them to family members and friends. Concealing assets is not a good idea, and you should assume a judge will learn of such actions eventually. A typical example of this involves transferring the title of your car to another person’s name.
Avoid suing anyone
When there is someone you want to sue, you should wait until you resolve your bankruptcy first. Any legal claim you currently have in process can become an asset taken into consideration by the bankruptcy court. Even claims you have filed with others but have not gone to court yet can still come into play. It is a good idea to seek out sound financial advice before pursuing any type of legal claim.
A Mississippi debtor who successfully files for Chapter 13 bankruptcy will go on a payment plan that lasts for three or five years. Payments are made to a trustee, and the trustee then distributes the payments to creditors.
How much that has to be paid is based on the person’s income and expenses. It is necessary to submit expenses for six months. The income can be from a number of sources including employment, alimony or a pension plan. If it varies from month to month, the amount the person must pay can vary as well. For some expenses, such as rent, the filer can use the actual amount owed, but there is a government-set amount that is used for utilities.
Priority debts include things such as child support, taxes and alimony and generally must be paid in full. If a person wants to keep a piece of property, such as a home, the payments have to be caught up with. For unsecured debt, such as medical and credit card bills, the person has to pay as much as the nonexempt assets are worth. However, a person does not necessarily have to pay off all debts. At the end of the payment period, if the person has followed the bankruptcy agreement, many of the remaining unsecured debts will be discharged.
People who are struggling with debt and considering bankruptcy may want to discuss options with an attorney. Some people may hesitate to file for bankruptcy because they think they will be unable to afford the payments or that their credit will be ruined for decades. However, bankruptcy gives a person an opportunity to make a fresh start while avoiding creditor harassment.
