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Columbia Bankruptcy Law Blog

Making the tough choice to file for Chapter 13 bankruptcy

Making the decision to file for bankruptcy is not an easy one. This decision likely came after significant financial difficulties, calls and threats from debt collectors, and other struggles. If you believe that bankruptcy is the right choice for your individual situation, you will then have to decide if Chapter 7 or Chapter 13 is the best option. 

Depending on the nature of your finances and the types of debts you owe, Chapter 13 may be the most appropriate option. Before you make an important and critical financial decision, you would be wise to carefully weigh both the pros and cons of this step.

Credit card debt carries heavy burden in South Carolina

Credit cards often seem like a lifeline when people in South Carolina have trouble making ends meet. While lines of credit can be invaluable tools for building a credit report or making sure there is food on the table, they can also impose a heavy burden. As household debt recently hit a record high, some economists worry that more consumers might be struggling with staggering monthly bills.

The current cumulative household debt tops out at nearly $13 trillion, with credit cards responsible for nearly $785 billion of that amount. After the United States' recent recession, many lenders reined in their lending policies and limited home loans only to those who can reasonably afford the debt. Credit cards lenders, however, tend to be far less picky.

Medical debt reform might not be helpful for South Carolina

Becoming sick, injured or otherwise unwell is an inevitability of life for many people in South Carolina. Although health insurance can help defray the high cost of seeking care, copays and payments from the insurance company usually fail to address the total bill. Indeed, many of the individuals who seek the help of a seasoned medical debt attorney are covered by health insurance, but still struggle with the final cost of their health care treatment. While various credit bureaus are reforming how they report medical debt, some of those who are truly in need of help will not be affected.

The reform stems from two different settlements that were reached with various state attorney generals back in 2015. The settlement was in response to the negative impact on patients' credit reports when payments lapsed between their insurance companies and their health care providers, and not when patients themselves failed to make payments. As of Sept. 15, 2017, credit bureaus will have to wait 180 days before they can place unpaid medical debts on credit reports. They will also be required to delete these reports if the debt is paid off.

Ways to manage credit card debt

Many households in South Carolina and around the country use credit cards as part of their overall financial resources. If used properly, they can be a valuable tool in a family's budget. However, many consumers accumulate a large amount of credit card debt by paying only the minimum due each month. Unfortunately, unless action is taken to break this cycle, the debt will continue to grow. Financial experts suggest several tactics for reducing or eliminating credit card debt.

It is critical to have a full understanding of how much one owes. Ignoring the debt can only lead to more problems. Once someone has a complete picture of total debt, the next step is to list all monthly bills. In addition to regularly recurring expenses, estimate other expenses, such as food and entertainment.

Former posh, now defunct resort headed to foreclosure

A creditor appears to be holding all the cards regarding a South Carolina luxury resort that was created by Citadel graduate and author Pat Conroy in the 1980s. The resort is said to currently hold a mere $18 in its bank account. The foreclosure process was initially paused and the property made available to potential buyers in a short sale auction; yet, no one has come forward to submit a formal offer.

The 400-acre resort is situated across from Hilton Head Island. Any and all offers to purchase it were due on a recent Tuesday. The asking price was thought by many to be quite minimal at $19 million. An attorney representing owners of the resort said no qualifying bids were submitted.

How do I know if bankruptcy is right for me?

Most everyone faces a time when things get tough. A job loss or divorce may drastically reduce your income, or maybe you just overspent on your last vacation. The result may be months of struggling, juggling and scrapping to get by. You may even reach a point where you begin to wonder if you will ever see the light.

In those moments, it may occur to you to investigate the option of filing for bankruptcy. Taking this step has brought debt relief to countless people in South Carolina, and you may wonder if your circumstances warrant such a move.

Repossession: More than just your car could be at risk

Many South Carolina consumers struggle with debt, and for some, these financial struggles can become a serious issue. You may have a significant amount of debt, and your situation may be at the point where you find yourself dealing with harassment from creditors and other issues, such as the threat of repossession.

If you are facing the possibility of losing your property because of your debt, you have no time to lose. Repossession could be more than a threat to your right to drive and keep your car; it could result in the loss of other types of personal property as well. You may feel hopeless, but there is a way you can make it stop.

Can Chapter 7 trustees request passwords to filer accounts?

Filing for bankruptcy is rarely a pleasant experience, but the hope of relief from debt makes the effort worthwhile for many. Chapter 7 bankruptcy offers the chance to have many unsecured debts discharged, providing a fresh start for those in South Carolina who have been struggling to keep their heads above water. Through Chapter 7, the court assigns a trustee to manage each bankruptcy and determine which assets are exempt or nonexempt. However, recent actions by bankruptcy trustees in another state have many concerned about the security of filers.

A trustee's duty in a bankruptcy case is to examine the assets of a filer and determine if any can be recovered to repay creditors. When it comes to online accounts, such as PayPal or eBay, trustees generally ask the filer to disclose any balances, or, if the filer is not forthcoming, they may subpoena the transaction statements. Recently, however, several Chapter 7 bankruptcy trustees requested the login and password information from people who had filed for bankruptcy in their state.

South Carolina credit card debt reaches record amounts

Having a credit card in one's wallet may provide a sense of security. What if one has an emergency, runs short of cash or comes across an unbeatable bargain? However, according to new data from the Federal Reserve, many in South Carolina and across the country may be placing themselves in financial jeopardy by carrying a high balance on those credit cards.

The report shows that Americans now carry a record-breaking $1 trillion in credit card debt. The average family credit card balance has risen to $9,600, which is about 17 percent of the average income for a U.S. household. Some credit card carriers may be paying as much as 24 percent interest on their balances. While the monthly payments may not be a problem for some family budgets, analysts advise that it often takes just one emergency to tip the balance.

Medical debt affects even those in South Carolina with insurance

It may be frustrating for many who struggle to keep their finances in order to hear accusations that they have reached this situation because of their own careless spending. Hearing advice to curb spending sprees and discipline their shopping habits may serve only to increase the stress for someone in South Carolina who is burdened with debt that has little to do with self-indulgence. In fact, medical debt remains the number one reason why Americans file for bankruptcy.

Having health insurance does not seem to make much difference. While about 40 percent of Americans have medical debt, a recent report shows that 20 percent of those younger than 65 struggled to pay medical bills despite having insurance. More than half of them admitted to having depleted their savings or taken a second job to try to pay their debt. Of course, if a serious or chronic illness or catastrophic accident is the reason for the medical debt, taking another job may not be a possibility.

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