Debt can be a significant source of stress for both men and women in Mississippi. However, data collected by Comet Financial show that women carry higher debt loads than men on average. The average student loan balance for women was $30,716 while men owed amounts that averaged $24,323. Car loans produced another disparity, with women owing an average of $12,183 compared to $10,371 for men.
Credit card debts followed the same pattern. While women carried an average outstanding balance of $6,559, men’s credit card debts averaged $5,163. Medical bills hit women harder as well. Their average medical debts were $1,110 more than that for men. The gender wage gap presents itself as the likely contributor of higher debts for women. In general, female workers only earn $0.72 to $0.82 for every $1 paid to male workers.
Regardless of gender, people have a strong interest in paying down their burdensome debts. To accomplish this, they might scrutinize their budgets for expenses that can be cut so that money can be redirected to debt balances. For many people, a second job has the potential to bring in hundreds of extra dollars per month that could go toward paying off loans.
When circumstances have forced a person so far into debt that keeping up with loan payments and living expenses appears impossible, speaking with an attorney about bankruptcy might reveal a solution. After reviewing someone’s financial situation, an attorney might recommend filing for Chapter 13 bankruptcy. This action might result in an adjusted payment plan that a debtor can keep up with every month. An attorney could prepare the financial disclosures necessary for petitioning the court. Legal support could allow a person to halt creditor harassment and potentially convince a court to discharge a portion of debts after the completion of a payment plan.
Some women who are living in Mississippi may struggle more than men to pay off credit card debt. A study found that more than one-quarter of women around the country said they were not confident they would be able to pay all their bills in a month compared to 14 percent of men. Furthermore, just under one-third of women who had credit cards said they had paid the balance in full one time or less in the past six months compared to 20 percent of men.
There are a number of reasons for this. A major problem is that their median wages are 80 percent of what men make, so it takes them longer to get out of debt. Single mothers in particular struggle because they often do not make enough to make ends meet and must rely on credit. This is the case even in a time when the economy is strong and unemployment is low. Many women may also be less informed about finances than men. Women’s magazines do not tend to write about financial literacy as much as magazines aimed at men, and women’s clothing stores may encourage using credit to get discounts.
However, credit card debt is on the rise for everyone. WalletHub reports it has reached its second-highest point since the 2008 financial crisis ended.
People who are struggling with credit card debt might want to discuss debt relief options, including bankruptcy, with an attorney. Credit card debt can be discharged in a bankruptcy, but other types of debt such as student loans and child support generally cannot be. It might be possible to create a budget that helps pay off debt, or a person may be able to get a loan or consolidate the debt.
Credit card debt leads to numerous people filing for bankruptcy every year. Mississippi has one of the highest bankruptcy rates in the United States, with roughly 361 people out of every 100,000 having to file for bankruptcy every year.
Filing for bankruptcy can be a viable option for many people to get their lives in order. However, there are actions many take directly before filing that significantly jeopardize the process. Therefore, before applying for bankruptcy, you should make sure you have not recently done the following.
Running up credit card debt even more
When some people decide they will file for bankruptcy, they figure they have nothing left to lose. They make a ton of purchases on their credit cards because they assume the courts will instantly forgive the debt. Most of the time, any credit card purchases made within 90 days of filing will not qualify for forgiveness. The court may then require you to pay off a significant portion of the debt even after the bankruptcy is over.
Transferring property to friends and family
Bankruptcy may require you to relinquish certain assets. In an attempt to avoid this, some people transfer certain items over to friends and family members so the court does not find them. This is illegal. It can derail the bankruptcy process, so make sure to be completely transparent with all the assets and debts you own.
Taking money out of your retirement accounts
Some try to take money out of their 401(k)s or other retirement accounts to either pay off creditors or stash some of it away. The bankruptcy code states you cannot pay off a creditor because it shows you favor one over another. If the plan is to hide the funds, then it is an unfounded fear. Bankruptcy does not impact retirement accounts, so you do not have to worry about losing those funds.
Far too many people in Mississippi struggle with credit card debt on an ongoing basis. When it is difficult to make ends meet, many people turn to credit cards to cover the gaps. Of course, it can then be even harder to keep up with existing expenses while trying to pay back the credit card bills. Credit card companies also urge customers to take on more debt. However, by keeping some tips in mind, people can help to resist these advances.
Across the country, consumer revolving debt, including credit card debt, stands at $1.037 trillion. Many credit card companies’ tactics inspire people to increase their debt burden, but that can come with a significant cost to consumers. Credit card rewards programs bill themselves as ways to benefit consumers for using the card. Sometimes, they can be a good choice, so long as people have the money to pay off the bill at the end of the month. But some programs can help people rack up debt; for example, one program allows people to buy a plane ticket now, but obtain the miles to cover it later through card purchases. If a customer doesn’t rack up miles, however, he or she will have to pay to buy the miles on credit.
In other cases, people may get in trouble due to late payments. After someone is more than 60 days late on a payment, a credit card issuer can apply a penalty rate to that person’s entire balance. This means that an APR can skyrocket to 29.99 percent across the board, making the debt even more difficult to surmount.
Consumers are often looking for debt relief, especially when their financial situation becomes unsustainable. A bankruptcy lawyer might be able to help people to review their options to move forward toward a new financial future, including personal bankruptcy or other negotiated alternatives.
People paying off debts in Mississippi often stop using credit cards and switch to making purchases with cash. Although this is an appropriate way to tackle debt, careful use of credit cards does help people maintain their credit ratings. Credit cards that offer reward points provide consumers with multiple advantages when paid in full every month.
An active credit card account that’s in good standing could help a person secure a low interest rate when financing a car or home. This benefit emerges after cultivating an excellent credit history on the same account over the long term.
To build a good credit history, a person should take care to not use over 30 percent of the available credit at any time. The full balance also needs to be paid on time every month. The development of a budget could help someone prevent overspending that would interfere with paying off his or her bill every month. Once a budget has been mastered, a person could then route regular expenses through the credit account in order to earn rewards. This regular monthly activity would also promote a good credit score because credit bureaus calculate scores based on the use of credit as well as the length of credit history.
A job loss or medical crisis, however, could undermine the budget of even a very careful person with good credit history. When bills start to go unpaid, interest rates and penalties add up quickly. If a resolution to financial challenges does not appear possible in the future, a person could consider tackling the problem head-on with a bankruptcy filing. An attorney could supply specific information to a person about qualifications and protection from creditors. A lawyer could also prepare the lengthy financial disclosures for the court to pursue the discharge of debts.
