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Fort Lauderdale Bankruptcy Law Blog

What is Chapter 13?

Getting into debt is a horrible experience. It can be extremely overwhelming and at times you may feel like your situation is hopeless. It is often hard to look positively toward the future and see a way out of your struggles. However, this is something that countless families in Florida go through and there is a way out. It may be a long and at times difficult path, but with the right support and guidance you can come out the other side of this taxing period of your life.

Florida family fight to save home from foreclosure

No matter how careful you are with your finances, how diligently you save or how thoroughly you plan for the future, life can still catch you off guard. It is all too easy for an unexpected event such as a serious illness, bereavement or accident to incur significant costs and leave you buried in debt. Sadly, it is a reality that all too many families in Florida face. Worse still, debt can be a downward spiral from which it is often difficult to escape.

Debt is not the end

Throughout Florida, countless families struggle with growing debts. The cost of living can be high and it is not always easy to earn enough to cover even your most basic living expenses. Throw in a few unexpected events, such as bereavements or illnesses and you can quickly find yourself becoming overwhelmed. At first you may try refinancing, putting expenses on credit cards or taking out loans, but this can often make the situation worse. Eventually, you may find that the problem seems insurmountable.

Is student loan debt going to cause the next financial crisis?

Are you one of the 40 million Americans with student loan debt? If so, you probably understand how pressing the issue is. You might have noticed that those without student loan debt don't seem to get it. However, some financial experts say that it’s only a matter of time before the problem starts affecting the economy on a broader scale, which is sure to get everyone's attention.

According to the president of Purdue University and the former Republican governor of Indiana: "Every citizen and taxpayer should be concerned about it."

Supreme Court bans second-mortgage lien stripping in Chapter 7

There are a variety of different ways that a Chapter 7 bankruptcy could potentially help an individual who is struggling with debt problems. However, there are limits to what a Chapter 7 bankruptcy can do.

A recent decision by the U.S. Supreme Court set such a limit. This limit is that, when a debtor is underwater on a property and has a second mortgage on the property, they cannot have the lien for the second mortgage stripped away in a Chapter 7 bankruptcy.

Having student debt becoming more and more common among seniors

Many years ago, it was fairly uncommon for a person to have much in the way of student debt in their elderly years. It is estimated that, in 1989, $400 was the average amount of education debt for retirees in the 65 to 74 age group and such debt made up less than 1 percent of the "installment" debt of retirees in this age group.

However, things are now much different. Substantial student loan debt is far less unusual of a thing for an elderly individual to have. According to some recent estimates, nowadays, the average amount of education debt for retirees who are in the 65 to 74 age group is upwards of $2,300 and a whopping 15 percent of this group's overall "installment" debt load consists of education debt.

Watch for the warning signs of credit card debt struggles

When it comes to emerging debt problems, addressing them sooner rather than later can be very important. Emerging problems with credit card debt are no exception to this. When a person spots and takes steps to address credit card debt struggles early in the development of these struggles, they might have a wider range of debt relief options available to them than they would have otherwise had and may be able to help prevent the struggles from reaching a level where they could cause a truly great deal of harm. 

Thus, it can be very important for individuals who use credit cards to keep an eye out, when it comes to their credit card debt, for warning signs that credit card debt struggles might be developing. There are many different such warning signs; some examples are: 

  • Drops in your credit score.
  • Having a very long estimated repayment time for your credit card balance. 
  • Constantly shifting your debt to different credit cards.
  • Being afraid to look at your credit card bill.

High debt can make saving for retirement difficult

Having high debt can have the potential to have a variety of negative effects on a person. One such possible negative effect is that it can make it more difficult for a person to save for their future retirement.

High debt may be one of the things behind the difficulties workers here in South Florida have been having when it comes to saving for retirement. A Fidelity Investments survey indicates that South Floridians are well below the national average when it comes to the size of their 401(k) retirement accounts. According to the survey, as of March’s end, the national average for amount in such accounts was $91,800. Meanwhile, the survey indicated that the average amount in such accounts for individuals in South Florida (Miami-Dade County, Palm Beach County and Broward County) was a mere $76,700.

Addressing debt problems with an investment property

There are many different routes individuals can go when it comes to investing. One investing route that some people go is to buy a piece of property as an investment.

Unfortunately, things sometimes don't go the way a person hopes they will with an investment property. For example, if an investment property's market value ends up dropping, it could put its owner in a tricky situation. One situation a value drop could potentially cause an investment property owner to be in is being underwater on their property. It can be incredibly disconcerting for an investment property owner when a property that they thought was going to be a financial boon for them is actually being the source of some significant financial problems.

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