Managing your finances is often much easier said than done. In fact, it may just be one of the most challenging and arduous undertakings in adult life, for any number of reasons.
Dealing with student loan debt, for instance, has caused many millions of young adults to enter their professional lives already coping with a serious financial weight. Many more are stuck paying steadily-increasing rent costs, rather than attempting to build equity by purchasing a home.
For others, however, purchasing that home has resulted in trying to pay for an asset that isn’t appreciating in value as they might have hoped. In other cases, an unexpected medical bill may send someone’s personal debt skyrocketing.
The reality is that if you’re dealing with debt, you’re not alone. Debt happens: It comes in many different forms, takes on many shapes, and impacts people in unique and unpredictable ways.
If you’re facing down debt, you’re certainly not alone – and you don’t have to face its challenges on your own, either.
The Reality of Debt in America
Here are some sobering facts about debt which you may not know. The last time the United States census was taken, in 2010 and 2011, roughly 70 percent of households in the country had debt.
Around the year 2000 (the previous census), the median household debt was about $51,000 – fast forward ten years to 2010, and this figure increased to a striking $70,000. As of 2011, the average adult 35 or younger had already accrued as much as $45,300 in debt. Those in the midst of adulthood, ages 35 to 45, were facing a whopping $108,000 of debt on average.
Well, as of 2018, total household debt has reached a record high of $13.3 trillion, according to data from Bloomberg. Total mortgage debt has reached $9 trillion. Auto loan balances have reached a high of $1.2 trillion, continuing a six-year climb, according to stats from the Federal Reserve Bank of New York. Total credit card debt stands near $1 trillion, and student loan debt at $1.4 trillion, per CNBC.
While we don’t have more recent census data, a recent survey suggests that average household debt in the country sits around $38,000 – without factoring in mortgages. According to that same study, roughly 20 percent of Americans spend 50-100 percent of their monthly income on debt repayment, and the number of people who report having “no debt” has been in freefall.
The bottom line? While the economy has changed in the past several years, countless households around the country are still dealing with the grip of debt.
And while these numbers are revealing, they don’t tell the whole story for the many, many households out there struggling to stay afloat in a rising tide of debt.
Fortunately, there are many viable strategies to help consumers break the crushing grip of debt – including filing for bankruptcy.
Bankruptcy: Providing Relief for Households Facing Debt
While bankruptcy often gets a bad rap, due to the many common myths and misconceptions that float around, the reality is that it may be a way for many people to achieve the financial relief they need, and genuinely deserve.
And again, in filing for bankruptcy, you will not be alone. According to a CNBC report, more than 733,000 individuals and businesses were expected to eliminate their debts through bankruptcy in 2018, up significantly from fiscal year 2017.
There are two commonly available types of bankruptcies that individuals can utilize. The first is a bankruptcy known as a Chapter 7. This process calls for the appointment of a “trustee” to oversee the debtor’s assets. Assets that are not exempt from a bankruptcy filing will be sold and the money collected will go to the creditors. In Chapter 7, the goals is to offer the debtor a new financial start, free from the overwhelming weight of their past debts. In this process, creditors may release liens on property or discharge debts completely.
The second common type of bankruptcy is called Chapter 13. This filing is sometimes known as a “wage earner’s plan.” When an individual has a regular and consistent income, a Chapter 13 can be utilized to establish a structured repayment plan, created with the guidance of an attorney and overseen by a trustee. Sticking to this plan can help debtors avoid foreclosure on their homes and avoid direct contact with creditors. Over three or five years debtors make consistent payments, on schedule, to ensure that their past debts are extinguished.
How Can the Gunderson Law Firm Help Guide You Through the Bankruptcy Process?
At the Gunderson Law Firm we believe in second chances. We believe in realistic financial planning. We believe in you.
If you, like millions of others, have found yourself in over your head, give us a call. We are here to help Chicagoland individuals, families, and businesses to leave their past debt where it belongs – in the past.
Our attorneys and staff can help you determine whether bankruptcy is the right strategy for you, and, if so, help you through every step of the process, making it as smooth and secure as humanly possible. Nearly every day, we protect our clients’ assets to the full extent allowed by today’s laws throughout the complex bankruptcy process, helping them get the debt relief they need.
Have any questions? Want to find a time to schedule your free initial consultation? Don’t hesitate to drop us a line today to get the conversation started.