Millions of Americans are in debt. In fact, according to a 2015 report by the Pew Research Center, 89 percent of individuals ages 36 to 51 and 86 percent of individuals ages 20 to 35 are in debt. From a home mortgage and student loans to credit card and medical debt, many individuals age 50 and younger will spend the rest of their lives attempting to pay off debt.
A job loss, health emergency or unexpected car repair can result quickly result in an individual accruing thousands of dollars in debt. For the millions of Americans who struggle each month to pay the bills, it’s easy to become overwhelmed and to feel hopeless. While it’s often very easy to fall behind and accrue debt, high interest rates make it exceedingly difficult to pay down or off debt.
According to the Institute for College Access & Success, 69 percent of public and nonprofit college graduates have student loan debt, the average amount of which totals in excess of $28,000 per student. Combined, U.S. college graduates have accrued massive amounts of student loan debt to the tune of $1.2 trillion dollars.
With the introduction of major credit card companies like Visa and MasterCard in the mid-1970s, the U.S. public fell in love with the concept of having it now and paying for it later. Since that time, the credit card industry has grown into a multi-billion dollar one, with the average U.S. consumer having four credit cards with an average total household balance of nearly $8,000.
A recent study conducted by economists from the Federal Reserve Bank of New York and Columbia University suggests that the costs associated with filing for personal bankruptcy could cause some people to become insolvent. The researchers looked at the impact that the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act has had on bankruptcy filings.
New York homeowners with second mortgages may want to know about a case being discussed by the Supreme Court regarding how bankruptcy should affect the status of "underwater" second mortgages. The case involves allegations that the current system, which is governed by the precedent established by a 1992 Supreme Court decision, allows the lien holders of second mortgages to prevent some borrowers who have declared bankruptcy from avoiding foreclosure.
According to a study done by an attorney, 40 percent of holders of student loans were able to have those obligations discharged in bankruptcy court if they attempted to do so. Furthermore, although there are thousands of good candidates for full or partial discharges, the vast majority do not avail themselves of this opportunity. This is partially because of the widely-held perception that student loan obligations cannot be discharged in bankruptcy.
Long Island residents who are struggling to pay bills and have overwhelming consumer debt may be interested in some information about the types of personal bankruptcy available. Depending on a number of factors, one of the two types of bankruptcy may be appropriate for their particular situation.
When an individual files for bankruptcy, he or she may have to liquidate assets to pay off debt. While the liquidation process is an important part of bankruptcy, there are some assets that individuals need to have to survive. Fortunately, the New York bankruptcy code makes certain exemptions that allow individuals to retain ownership of specific assets.
New York residents who are facing overwhelming debt from first or second mortgages may be interested in one way to find debt relief. One specific legal process may allow a homeowner to remove a lien on their home that is held by the second mortgage creditor.