Posts Tagged ‘Credit cards’
Here’s a link to a worthwhile article by Jennifer Waters on a very common (and very important) question that our clients often ask: What can I do to help my credit rating after filing a bankruptcy?
To discuss your credit repair and rebuilding options with one of our attorneys, call us today!
1. Don’t run up your credit cards.
2. In fact, don’t even use your credit cards!
3. Don’t take our any pay day loans.
4. Don’t Cash out your 401(k) or any other retirement plan you might have.
5. Don’t pay back any friends or family members to whom you might own money.
6. Don’t transfer your money into someone else’s bank account.
7. Don’t go gambling!
8. Don’t do a balance transfer.
9. Don’t try to transfer any property out of your name.
10. Don’t be afraid to ask your attorney questions!
USA Today recently published an article explaining that Americans’ student loan debt, which totals approximately $850 billion, now exceeds outstanding credit card debt in the U.S., which totals approximately $828 billion.
Perhaps a more interesting element of this story has to do with the monthly repayment numbers borrowers are expected to pay. The USA Today article suggests that $30,000 of student loans, payable at 6.8% interest over ten years would amount to $350 per month. At this level of debt, the average person would need to earn at least $42,000 per year. Unfortunately, as bankruptcy attorneys we commonly see student loan debt in excess of $100,000, with monthly payments over $1,000.
From a bankruptcy perspective, student loan debt is not dischargeable except in cases of “undue hardship.” In the Eastern District of Wisconsin, the court uses a very strict three part test to determine whether student loans may be discharged. As the law stands today, debtors in the Eastern District of Wisconsin have not been successful in arguing for hardship discharge on the grounds that they cannot find a job that pays enough to support their student loan obligations.
The MSN Money team makes the important point that before you start saving money, you have to stop spending it. Below are 10 common ways that Americans blow their hard-earned cash. Check out the full article here.
1. Buying Brand Names
2. Buying New
3. Accepting Initial Offers
4. Buying a Bigger Home than You Need
5. Paying Interest
6. Eating out too Much
7. Paying for Freebies
8. Keeping Unhealthy Habits
9. Turning Down Free Money
10. Paying too Much for Insurance
Do any of those ring a bell for you? Did they miss anything? Add your top money wasting activities in the comments section below.
Bankruptcies ease in U.S., state
By Paul Gores of the Journal Sentinel
July 25, 2011 |(1) Comments
Bankruptcy filings in Wisconsin and the nation are running behind last year’s pace, but attorneys say it’s too soon to know whether the wave of filings triggered by the economic downturn has crested.
Still, at least in some lawyers’ offices, the number of people coming in to declare themselves insolvent has slowed slightly. And more of those filing for bankruptcy today are people who at one time were higher on the economic scale. That compares with many of those who filed earlier in the recession – people who were living paycheck to paycheck and folded quickly when their income was cut, lawyers said.
“I think those that we’re seeing now are those who were able to survive the downturn – people who were self-employed, people who had higher-paying jobs, were able to tap into retirement accounts and use the credit card but make the minimum payments,” said James Miller, of Miller & Miller in Milwaukee. “There is just not that same mass of people as those who fit into the first category.”
U.S. Bankruptcy Court records show bankruptcy filings fell 8.4% in the first half of 2011 in Wisconsin, to 14,682 from 16,024 in January through June 2010. About 80% were Chapter 7 filings, which wipe out debt on things such as credit cards, medical expenses and utility bills.
The Wisconsin numbers mirror a decrease in consumer bankruptcies nationally. There were 709,303 filings in the United States in the first six months of 2011, an almost 8% decrease from 770,117 during the same span in 2010, according to American Bankruptcy Institute.
“What we’re seeing is still high filings, but off the peak,” said David Leibowitz, founder and managing member of LakeLaw in Milwaukee and Kenosha. “I don’t think we can take a great deal of comfort in it. But I do think that there’s a direct correlation between the economy and unemployment on one hand and the bankruptcy statistics on the other hand.”
Madison bankruptcy attorney Claire Ann Resop of von Briesen & Roper said people who had been making at least midlevel incomes are among those she sees more frequently. Among those on the list: teachers, nurses, sales people, tradesmen, homebuilders and truckers.
“They had higher income and they had more resources to try to keep up for a while,” she said.
Milwaukee attorney Robert Waud said he was “kind of surprised” to hear the number of filings in the state declined.
“It’s pretty steady coming in the door,” he said.
Small-business owners, trades people and land developers are common bankruptcy filers, he said.
Waud, of Todd C. Esser & Associates, isn’t convinced bankruptcy filings have peaked, even if the half-year trend is down from a year ago.
“I think it’s too soon to say,” he said.
Miller said restraints on credit since the start of the recession and financial crisis have cut the likelihood of people charging huge debts that end up in bankruptcy.
“Credit companies aren’t taking as many risks on people, so there are not as many credit-related defaults,” Miller said.
Lawyers said issues that historically have led to bankruptcy remain the big factors – uninsured major medical costs, divorce and job loss.
“The problem still, as far as I’m concerned, is there are not enough people working,” Waud said.