Even before the advent of the credit card industry, pioneers, patriots and presidents alike found themselves in tough financial straits. According to Roland Gary Jones, Esq., author of Bankruptcies and Money Disasters of the Rich and Famous, Abraham Lincoln went bust running a grocery store before falling back on politics. Even as he ran for state Legislature, he was battling creditors for non-payment of the store’s debts, Jones said. And even after winning election, Mr. Lincoln’s horse, saddle, and all other possessions were confiscated for auction by the local sheriff. Other notable heroes with money problems include Elliot Ness, the 1920’s FBI hero, as well as Samuel Adams, President Thomas Jefferson, and James Wilson, the first U.S. Supreme Court Justice, among many others. More recently, before his election to the nation’s highest office, President Donald J. Trump had used the bankruptcy law to relieve own business debts.
If you’re feeling alone in your financial troubles, remember that people don’t plan to go bankrupt. Many life and business events can result in unexpected cash flow problems and major debt. The bankruptcy chapters were put into effect to help not only the “rich and famous,” but also to assist everyday people who need to get back on sound footing. After qualifying for debt relief under the bankruptcy chapters, people have an opportunity to move forward and build a new financial base for the future.
For people struggling with debt, it helps to explore options available under the law. Individual circumstances vary; a qualified attorney can help determine whether bankruptcy is a viable option.
If you are mired in debt, don’t feel alone. According to a 2015 Pew Research study, only 20 percent of Americans are free from any form of debt. The most common variety is mortgage debt (44 percent), followed by unpaid credit card balances (39 percent), car loans (37 percent), and student loans (21 percent).
According to a USA Today report (10.12.2016), “Using data from the U.S. Census Bureau and the Federal Reserve, ValuePenguin found that the average credit card debt for households that carry a balance is a shocking $16,048 — a figure that has risen by 10% over the past three years. At the average variable credit card interest rate of 16.1%, this translates to nearly $2,600 in credit card interest alone. And many credit cards have interest rates much higher than the average.”
With “an average interest rate and a minimum payment of 1.5% of the balance, it would take nearly 14 years for the typical indebted household to pay off its existing credit card debt, at a staggering cost of more than $40,200. Keep in mind that this assumes no additional credit card debt is added to the tab along the way,” the report stated.
For more information on debt relief and bankruptcy, feel free to contact me with your questions or concerns:
When filing for bankruptcy on behalf of a client, an attorney must consider how to best protect the client’s assets. During bankruptcy proceedings, the court reviews the petitioner’s assets to determine the debtor’s ability to repay creditors. The court then may require sale of the debtor’s property to reimburse creditors and/or cover court costs. The degree to which property is liquidated depends on the circumstances of each case.
Luckily for debtors, the bankruptcy codes include exemptions that may allow debtors to keep essential items, such as money contributed to retirement and pension plans, primary residences (to a certain value), vehicles (depending on their value), household goods and home furniture.
If you are considering bankruptcy, a qualified bankruptcy attorney can help you understand your options. While it is not necessary to hire an attorney to file for bankruptcy, an attorney can help ensure that your bankruptcy is properly filed and determine which assets you can protect from liquidation.
When clients first consult me about bankruptcy, most feel worried and concerned about their future. The part I most enjoy about representing people in bankruptcy court is watching the smile emerge on their faces when their debts are discharged, and we’ve been able to protect property and assets important to their future.