America’s Credit Card Debt

It is difficult to find credit card debt statistics because they are not widely known. It is also hard to measure and analyze the data of credit card debt statistics as there is no good system in place for doing so. However, the lack of statistics rivals the amount of people struggling to manage or get out of their debt. A great resource for those looking for numbers on credit card debt in America is the US Census Bureau Report.

Millions of US citizens have accumulated a combined $886 billion dollars in 2010 and the projections for 2011 are only worse. The average cardholder has approximately five thousand dollars in credit card debt. This figure is a direct increase from 1990 where the average credit card holder owed around three thousand dollars. After almost doubling, the national credit card debt seems to only intrinsically increase over the years. It is imperative for credit card users to know the options available to them for credit card debt relief.

The most logical and sure-fire way to reduce or avoid credit card debt is to learn new ways to save money. Saving money before you allow yourself to secure any type of debt, be it mortgages, car loans, student loans, or credit cards, will give you an alternative plan that will save you from financial ruin. Research different methods to save money by reading online articles or talking with successful close friends and family. Once you have figured out the best route to save money, employ those practices and avoid debt in its entirety.

For those who have already accrued a sufficient amount of debt, there are many different options for getting out. By putting forth all your efforts to pay off a debt, you are sure to eliminate all of your debt at a quicker and less-stressful pace. Talk to your credit card companies and attempt to renegotiate the terms of your debt repayment. Creditors and debt buyers are willing to work with those who are willing to work with them. Settling or negotiating your debt is a safer way to remove debt without filing bankruptcy. Be sure to use bankruptcy as a last resort and only for an extreme situation where no alternative is available.

Americans will consistently find themselves in debt unless they decide to do something to change it. Credit card debt will follow an individual where ever he may be go, so it is vital to understand the methods and resources to avoid credit debt entirely.

Going Bankrupt – Will I Lose Everything?

Going Bankrupt – Will I Lose Everything?

The quick answer is no, you will not lose everything. Filing bankruptcy protects you from losing everything, and this type of legal protection is one of the main reasons people choose to file for bankruptcy. Because sometimes an individual or business can be legally forced by their creditors and/or a court to declare bankruptcy, it is better to choose to file because the type of bankruptcy you choose determines which types of assets and property you get to keep.

Property You Get to Keep

In most cases, when you file for bankruptcy you will be able to keep your home, car, bank account savings, retirement account savings, household items, and other personal effects. You will also get to keep some of your other assets. Unsecured debt, that is debt that a creditor has not protected with a lien or some other form of collateral, is often discharged or eliminated as a part of bankruptcy, but secured debt is subject to repossession or liquidation.

Keeping Your Home

One of the main concerns of people on the verge of bankruptcy is whether or not they will get to keep their home. Keeping your home in bankruptcy is contingent on many factors, including the type of bankruptcy you choose to file. Nearly all individuals file either Chapter 7 or Chapter 13 bankruptcy.

Chapter 7 bankruptcy, which liquidates your assets in order to repay creditors, may allow the bank holding your mortgage to foreclose on your home. However, if you are on time with your mortgage payments you can keep your home, as long as you continue to make the payments on time.

A Chapter 13 filing legally protects your home under bankruptcy code and will stop foreclosure on your home, even if it is already in progress on the date you file. In a Chapter 13 filing, you propose a court-approved repayment plan that will bring you up-to-date on missed payments during a three to five year period. Since you are agreeing to pay back money from payments you’ve missed on your mortgage, the bank must allow you to keep your home under Chapter 13 bankruptcy code.

If you have a second mortgage or home equity line of credit on your home, it could affect your ability to keep your home if you are behind on the payments. Chapter 13 bankruptcy not only protects your home from foreclosure, but also offers the advantage of lien stripping, which removes a second mortgage of home equity line of credit from your home.

Keeping Your Car

The contingencies for keeping your car after filing for bankruptcy are very similar to those for keeping your home. If you are not behind on your car payments, you will get to keep your car. If you’ve missed a few car payments, you are already in danger of your lender repossessing your car, whether you file for bankruptcy or not. By filing a Chapter 13 repayment plan, the payments you’ve missed will be re-added to your principle balance, but you will be required to continue to make on-time payments in order to fulfill your repayment plan agreement.

In a Chapter 7 bankruptcy, you have the option of rebuilding your car loan through the redemption process, which allows you to obtain a redemption loan for the purpose of purchasing your car during bankruptcy. The redemption loan buys your car from your car loan lender, but you are responsible for making monthly payments on the redemption loan instead, which may be less than the car payments you were previously required to make.

A third option may be signing a reaffirmation plan with your car loan lender, which can be done whether or not you choose to file for bankruptcy. The reaffirmation plan re-adds your missed payments to your principle balance, and you sign a contract “reaffirming” that you will continue to make on-time payments for the remainder of the loan.

Keeping Your Business

When you file for bankruptcy, your business is usually treated like an asset. A value is placed on your business and the court or a court-appointed trustee decides whether your business will become an exempt or non-exempt asset. An exempt asset is one that is protected by bankruptcy law, allowing you to keep it. A non-exempt asset is not protected and may be sold in order to pay your creditors. In most cases, your business will be considered an exempt asset and you will be able to keep it. In some cases, some of your business assets may be considered non-exempt assets and liquidated.

Rental Properties

Whether or not you will be able to keep a rental property depends mainly on two factors. If you are behind on the mortgage payments for your rental property, it is more likely to be foreclosed on. However, it also depends on whether the property is cash-flow negative or positive. In other words, are you making money off rent from the property, or are the monthly payments and other related expenses costing you more than you are able to charge for rent? Just as with your home mortgage, if you are current on your rental property mortgage payments, you will likely be able to keep it.