By now most of our Escondido readers have heard about the looming problem that exploding student debt obligations presents to our country. Beyond that, many also know that student loan debt cannot be discharged in a personal bankruptcy action either, leaving few, if any, options for individuals drowning in this type of debt. After all, if an Escondido resident finds themselves plagued by almost any other type of debt, especially something like credit card debt, they know that filing for bankruptcy can be a solid option to get the debt discharged in order to begin to rectify an individual or family financial situation. So, are there any options for addressing student loan debt?
"Should I consider filing for bankruptcy?" This question begins for many people as a whisper of a thought in the back of their minds as they look over all of their financial commitments and compare them to the, at times, trickle of income they rely upon. While for many years there was a middle-class in this country that was able to meet all of their financial obligations, and at the same time put aside retirement savings, emergency fund savings and perhaps even college savings for their children, those days seem long gone for many people, most likely including many of our Escondido readers. For the vast majority of people throughout America these days, income is basically spent as quickly as it is earned, as millions exist in hand-to-mouth fashion.
California residents are accustomed to hearing quite a bit of celebrity news in their daily lives. This is no surprise since many famous actors and musicians call California home. While there are sometimes good, heartwarming stories about celebrities helping charities to raise money or adopting children from poverty-stricken foreign countries, more often than not celebrities make news for the wrong reasons. While one actress caught some negative news coverage recently, fortunately it was not for an arrest or entering drug rehab. Teri Polo, one of the stars of the "Meet the Parents" movies, filed for personal bankruptcy.
With the April 15 tax-filing deadline having already come and gone, many of our Escondido readers have probably taken their last comprehensive look at their finances for the year. Everyone knows that filing taxes each year can be a grueling process, but the reality is that this time of year also offers individuals and families an excellent opportunity to assess the current state of their overall financial health - and perhaps predict the impact of certain debt obligations going forward and whether or not filing for bankruptcy may be in play.
Some of our Escondido readers may have so many financial problems that they simply have no idea how to approach them. Some people do their best to pay off debt and live within a budget. Others borrow money from payday loan stores and lean on credit cards just to make ends meet. Still others will look into the possibility for filing for personal bankruptcy. No one ever wants to find themselves in this type of situation, but is it really that bad to consider bankruptcy over the alternatives?
When an Escondido resident is considering whether or not they should look into a personal bankruptcy filing, the decision can be driven by a variety of reasons. Some people may have thousands in credit card debt - so much that they think it might be impossible to pay it all back with interest accumulating every month. Others want to stop foreclosure actions on their homes and know that filing for bankruptcy will stay those proceedings. And, increasingly every day, millions of Americans are dealing with medical debt. However, now and in the years to come, there will be millions more facing another kind of debt - student loan debt.
Many Americans find themselves in this situation at some point in their lives: income is stagnant, bills are piling up and they are using one credit card to make the minimum payments on several others. Debts seem to be ever-growing, no matter what amount of payments are made. In a word, they are "underwater." They owe more than they make. People in this kind of situation, perhaps even some of our Escondido readers, will then ask themselves, "what now?"
Our Escondido readers may have seen the latest report on the unemployment rate in America, which recently ticked back up a bit. Even though more jobs are being created than are disappearing, most of the indications point toward a painfully slow economic recovery, in California and throughout the country. However, another barometer used by many experts, the rate of bankruptcy filings - both Chapter 7 personal bankruptcy and Chapter 11 business bankruptcy - provided a bit of good news in the latest figures.
We're told that we are living in the "Information Age." From a casual look at daily life in America, it is easy to see why. The Internet has brought information to people who may not otherwise have access, and virtually every home in the country has a television on which news from around the world can be accessed every day. Of course, there are both positive and negative aspects to this amount of available information. But, when it comes to considering a personal bankruptcy filing, an Escondido resident can never have too much information.
When many of our Escondido readers consider filing for bankruptcy, one of the primary factors to be brought up is probably this: How will I be able to get by with a bad credit report? It is true that a personal bankruptcy - a Chapter 7 bankruptcy in particular - can stay on a credit report for years, and in many ways this can restrict options for financing in the future. However, once the bankruptcy process is complete and an individual or family is ready to head toward that fresh start financially, a recent article suggested a few tips which might help raise a credit score faster.