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Columbia Bankruptcy Law Blog

Is Chapter 13 the best bankruptcy option for you?

You are definitely not alone in your struggle if you happen to be employed but have still been having trouble making ends meet. Like most localized economies in the nation, South Carolina has seen its ups and downs in recent years. Just because you currently have a reliable source of income doesn't necessarily mean you have enough to satisfy your debts.  

Perhaps your family has faced a recent medical situation that has tipped your financial scales off-balance. Maybe you got married and your spouse brought several children to your household, thus adding your blessing but also to your expenses. If things have gotten a bit out of hand and you're considering filing for bankruptcy, you'll want to seek clarification regarding the difference between Chapter 13 and Chapter 7 so you'll know which option best fits your needs.  

Personal loan debt growing quickly for South Carolina borrowers

Borrowing money is integral to the American way of life. From buying homes to purchasing motor vehicles to acquiring goods and services with a credit card, many daily purchases in South Carolina are based on borrowed money. However, most people think of borrowing money in specialized manners, such as a mortgage or an auto loan. Increasingly popular is the personal loan, an old practice that is now adding to the average consumer's debt.

Personal loans are not new, but they have experienced a recent surge in popularity. These unsecured loans may be for as little as $1,000 or as much as $10,000. Newer technology makes it easy for borrowers to complete online applications and get their funds in just a few days.

Medical debt a financial challenge for South Carolina residents

An accident or illness can dramatically change one's financial situation. In addition to the added bills caused by medical debt, it is likely that the South Carolina resident may also be facing a reduction in income. This combination can make it impossible for the individual to meet his or her monthly expenses.

No one expects to be in a serious accident or succumb to a devastating illness. Yet, these things happen on a daily basis. One minute the individual is laughing with friends and the next tragedy strikes. Not only does the individual suffer physically, but he or she will most likely suffer financially. Medical bills begin to accumulate, yet the individual is unable to work until he or she has recovered.

Consumer debt up in South Carolina

Keeping up with rising costs of living on what are often stagnant wages can be difficult during the best of times, but add debt into the mix and the few people may make it out on the other side. Many South Carolina debtors are now struggling with burgeoning household debts in recent years. As non-mortgage debt continues to climb, bankruptcy may be the most sensible option for consumers who are struggling to keep up. 

Mortgage debt still makes up the largest portion of household debt, and as mortgage and consumer debt is set to hit $15.7 trillion soon, mortgages account for $11.7 trillion of that number. So why are experts not focused on the mortgage side of things? Since 2008, household debt related to mortgages has actually dropped by over 5 percent. In 2008, the average mortgage ate up as much as 98 percent of a household's disposable income. Now, that figure is only about 68 percent. 

South Carolina debtors shouldn't wait to file for bankruptcy

Things will turn around soon; one more bonus and the bills will be caught up. A better job is just around the corner. One or more of these statements will run through the South Carolina debtor's head as he or she considers what should be done to relieve the financial pressure. Rather than continue to worry and wonder how to pay off the debt, it may be time to take action and file for bankruptcy.

Research indicates that the longer an individual puts off filing for bankruptcy, the harder it will be for him or her to get a fresh start. Many choose to take a wait and see approach -- let's wait and see what happens next month, next summer, after the first of the year, etc. However, as he or she waits to see what will happen, debts continue to increase, the stress continues to build and assets are often depleted.

Home ownership possible after South Carolina resident bankruptcy

Home ownership is often asserted to be the "American dream." Many South Carolina residents look forward to purchasing their dream home; however, when financial struggles become reality, they worry that they will never be able to qualify for a mortgage. This simply is not true. In fact, many who file bankruptcy find that they are able to obtain a new mortgage within a few short years.

One benefit of bankruptcy is that it allows the individual to start over and rebuild his or her credit. Then, within just a couple of years, the individual will be eligible to apply for a mortgage. FHA and VA require a two year waiting period once the bankruptcy has been discharged; USDA requires three years. Additionally, conventional FNMA or FMAC loans typically require a four year waiting period.

Chapter 13 bankruptcy may be solution for South Carolina resident

Financial struggles are a concern for many South Carolina residents. For some, the loss of income, a medical crisis or some other catastrophe has left them unable to pay their bills. For others, there is income; however, it is not enough to keep up with everything that they owe each month. When this happens, filing for bankruptcy may be the appropriate solution.

For those who have minimal income or are unable to make payments on their mounting debt, Chapter 7 bankruptcy may be the appropriate choice. Under Chapter 7 bankruptcy, the majority -- and sometimes all -- of the individual's debt can be discharged. Assets that are not considered to be exempt may be sold to help offset this debt; however, the individual is typically able to retain the majority of his or her assets that are not used as collateral of a debt being discharged.

Did one of these problems prompt your need for debt relief?

When considering either global, South Carolina or personal economics, you may notice that finances fluctuate. A nation, civic community or individual may go from days of financial stability, perhaps even a thriving economy to major financial crisis in a short amount of time. Depending on your circumstances, you may be aware of an approaching financial crisis or caught completely off-guard.

Perhaps your boss tells you the company plans on cutting back and you'll be out of a job in six months. If you are unable to secure new employment within that time, it may come as no surprise when you start to have trouble making ends meet once you're unemployed. On the other hand, you may have a few months' savings in the bank but face sudden, unexpected crisis when a medical emergency arises. When external factors cause financial distress, it's critical that you know where to seek support.

South Carolina bankruptcy does not always equal foreclosure

A sudden job loss or health concern can quickly alter one's financial picture. One day the South Carolina family is living comfortably in their home, bills are being paid and there is even money left over to enjoy the occasional splurge. The next day, tragedy strikes and the family's financial situation immediately changes. When this happens, the family may be faced with foreclosure unless they can find a way to restructure their financial obligations to allow for the home to be saved.

One of the first steps the family will want to take is to analyze their budget. Based upon the changing circumstances, what income can the family expect to receive? Additionally, which expenses must be paid? Which expenses can be eliminated? Once this has been accomplished, the family will have a good idea of where they stand financially.

Timing your bankruptcy filing just right may improve outcome

Financial crises are usually temporary; that's the good news. More good news is that there are often several debt relief options available that can help you get things back on track when situations arise that threaten your financial stability. You may be understandably frightened if lenders are mentioning words like foreclosure or creditors are threatening litigation.  

It's always best to try to remain calm and gather as much information as possible to help you make financial decisions that resolve the problem at hand and set the tone for a stronger financial future. If you're considering filing for bankruptcy, timing is important because when you file may affect which of your debts you can discharge. You may also be relieved to know that you don't have to go it alone when trying to find viable solutions to serious financial problems because support is available.  

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