Northern Virginia Law Blog

Household credit card debt increased in 2018

On behalf of Law Office of Deborah N. Arthur posted in personal bankruptcy on Thursday, January 3, 2019.

Households in Virginia and throughout the country carried an average credit card balance of $8,284 in the third quarter of 2018. That was a 2 percent increase from the third quarter of 2017, according to a study from WalletHub. As debt levels increase, it may become more difficult for households to repay them. Increasing interest rates may also make it harder to repay those balances.

Current credit card debt levels are approaching those last seen during the Great Recession, and the amount could be exceeded in 2019. At that point, credit card debt balances may be at an unsustainable level. According to WalletHub, current levels are only $177 away from that point based on current income figures. In total, Americans owe $974.2 billion in credit card debt, which is up 3 percent from 2017. The increase comes in spite of the fact that $40.8 billion in debt was paid off in the first quarter of 2018.

When estate plans need updating

On behalf of Law Office of Deborah N. Arthur posted in estate planning on Wednesday, December 19, 2018.

There are a few common errors people make with their estate planning. One is leaving certain critical documents, such as a will, out of the plan. Others have to do with failing to update the plan. People in Virginia should review their estate plan roughly every three years, but there are also certain events or situations that should trigger a review.

People may need to update an estate plan after moving to another state since state laws can differ. It may also be necessary to take steps to update residency in another state. There could be changes in the family because of births, deaths and divorces that lead to an estate plan update. A change in a person's assets might also result in the need to update the plan.

Protecting your inheritance without losing Medicaid benefits

On behalf of Law Office of Deborah N. Arthur on Tuesday, December 11, 2018.

Your disability does not keep you from many important day-to-day tasks. However, it does make life expensive and difficult when it comes to your medical needs. A family member wants to leave an inheritance to you, but your medical needs will drain those assets. Meanwhile, the income will cause you to become ineligible for the government benefits you count on.

Is there anything you can do to protect your inheritance and retain the assistance you need?

Credit card debt in America passes $1.04 trillion

On behalf of Law Office of Deborah N. Arthur posted in personal bankruptcy on Thursday, December 6, 2018.

The amount consumers in Virginia and around the country owe to banks and credit card companies is expected to surpass $4 trillion by the end of 2018. This figure, which reflects revolving and installment debt but does not include mortgage balances, has risen by $1 trillion in just the last five years. Experts voiced few concerns over growing consumer debt levels when interest rates were close to historic lows, but a recent wave of rate hikes with the promise of more increases to come have prompted them to start issuing grim warnings about credit bubbles and unsustainable borrowing.

The Federal Reserve says that interest rates must be increased to rein in a surging economy and prevent inflation from taking root, but consumer advocates worry that credit card rates are already too high. According to the consumer information website LendingTree.com, American consumers spend more than $10 billion each month on credit card interest and fees and pay annual percentage rates that average between 16 and 17 percent.

Stan Lee's estate may not have such a happy ending

On behalf of Law Office of Deborah N. Arthur posted in estate planning on Thursday, November 29, 2018.

Fans of Spider-Man in Virginia are among the many superhero enthusiasts around the world who have been mourning the recent death of Stan Lee. Unfortunately, the last few years of the life of the former head of Marvel Comics were a tangled web of accusations coupled with numerous changes involving relationships with attorneys and business managers. During this time, Lee also lost his wife, was accused of sexually harassing home aides and nurses, and made accusations about thousands of dollars being stolen from his condo.

It's not clear how much estate planning Lee had done prior to his death although similar issues have affected late celebrities such as Aretha Franklin and Prince, both of whom did not have wills. There were also rumors of cognitive decline associated with Lee during his final years along with allegations of elder abuse he made against his own daughter before taking back his statement.

Navigating out of credit card debt

On behalf of Law Office of Deborah N. Arthur posted in personal bankruptcy on Wednesday, November 7, 2018.

For many people in Virginia, debt is becoming a growing crisis. In the first quarter of 2018 alone, household debt increased by $63 billion in total across the United States. This marked the 15th consecutive quarter of growing debt burdens for consumers across the country. In total, Americans have $13.21 trillion in personal debt, including $815 billion in credit card debt and $1.23 trillion in auto loan debt. For many people, debt can seem manageable for a time, but when a crisis hits, it gets harder and harder to pay the bills each month.

People can take action to maximize their financial planning in order to pay down their debt and escape its crushing burden. In many cases, it's important to target the types of debt with the highest interest rates first. Otherwise, compounding interest will continue to rise dramatically with little to no benefit to the consumer. In addition, people can benefit from a thorough review of their financial situations. Debtors should obtain a copy of their credit report and list the types of debts they have as well as the outstanding balance and interest rates. This can help people to craft a plan for repayment.

Including charitable gifts in an estate plan

On behalf of Law Office of Deborah N. Arthur posted in trusts on Thursday, October 25, 2018.

People in Virginia who are thinking about the future may consider how they can incorporate their favorite charities into their plans for their estates. Many people set goals for philanthropic and charitable giving during their lifetime, and they want it to continue after they have passed on. Philanthropy can provide important practical benefits in addition to a sense of well-being. By donating to charity, individuals can benefit from tax relief annually. This tax relief can also come as a boon to the beneficiaries of a person's estate.

When people think about the kind of giving they want to provide, they can make use of the estate planning process to help achieve their goals and leave a legacy of giving. Of course, it is important to choose a charity that is meaningful. People can select a meaningful cause by reviewing their past donations or focusing on a particular organization that has always been of interest. By choosing a charitable beneficiary with a high level of personal meaning, both the people planning their estates and their beneficiaries can feel good about their philanthropy.

Common questions about filing for bankruptcy

On behalf of Law Office of Deborah N. Arthur on Wednesday, October 17, 2018.

If you are struggling with overwhelming debt, the practical and emotional stress is likely weighing heavily on you every day. Rather than avoiding the problem, you need to find a workable solution so you can begin to get your financial future back on track.

Although filing for bankruptcy is a serious decision that merits careful consideration, for many people, it can be the most positive decision they make with regard to their financial health. A personal bankruptcy can often turn a bad situation into a fresh financial start and be the first step in terms of a new beginning. You should understand a few basic concepts about bankruptcy if you are considering it as a possibility in your situation.

Choosing the right executor for an estate plan

On behalf of Law Office of Deborah N. Arthur posted in estate planning on Thursday, October 11, 2018.

Some people in Virginia may put off creating an estate plan. It can be difficult to confront issues such as illness and death. However, all adults need an estate plan, and an important element of an effective estate plan is choosing the right executor.

First, the executor needs to be someone who is capable of doing the job. The executor needs to be organized and trustworthy and should be someone who is likely to outlive the person creating the estate plan. This could be a family friend, a child or a niece or nephew. The executor should also be someone who knows the person well. The executor should be able to anticipate and understand the person's wishes. This reduces the likelihood that the executor will misunderstand the will or other documents. A person is also more likely to be comfortable talking about issues related to the estate with someone close, and the executor is more likely to interpret any ambiguous elements of the estate plan correctly.

Credit card debt spiral threatens finances of older millennials

On behalf of Law Office of Deborah N. Arthur posted in chapter 13 bankruptcy on Thursday, September 27, 2018.

Virginia residents in the 25-to-34 age group have a high likelihood of struggling with debts. While some may assume that these millennials are mostly dealing with high student loan balances, credit card debts are more common. The 2018 Planning and Progress Study from Northwestern Mutual looked at the sources of debt for this demographic group and found that 24 percent of debts came from credit cards whereas only 16 percent resulted from student loans.

According to the study, a cycle of buying and borrowing increases credit card balances. Debt repayment appeared to be a low priority for many people and debts were more common than savings. Respondents were twice as likely to have credit card balances between $5,000 and $25,000 than personal savings.

We Have Your Best
Interest In Mind