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Understanding how bankruptcy can help with debt relief

Virginia residents who are struggling to keep up with their debt payments could benefit from filing for bankruptcy. Mortgages, auto loans and credit card bills are among the types of debts that could be discharged. It is also possible to have rent, past due utility bills and medical bills taken care of in a bankruptcy case. However, there are many types of debts that either can't or are rarely reduced or eliminated in bankruptcy.

For instance, student loan debts usually can't be discharged unless they cause an extreme hardship. Typically, a student loan debtor would move to an income-based repayment plan to lower his or her monthly payments. If a person owes money to the government, balances owed are unlikely to be done away with. This includes most income and payroll tax debt as well as almost any fines incurred for a violation of state or federal law.

Debt and interest rates to rise in 2018

Americans spend about 10 percent of their monthly income on debts such as auto loans and credit cards. While that may not be a dangerous level for most people, it is a good idea for Virginia residents to know where that debt is going. As a general rule, student and auto loans are easier to manage compared to credit card debt because of the difference in interest charged.

Those who struggle to avoid using their credit cards should use a debit card to make purchases instead. Making a budget can be an effective way for a person to understand his or her financial health and make changes if necessary such as shopping less often. According to LendingTree, consumer debt is going to reach $4 trillion by the end of 2018. Despite this increase in debt totals, the credit card delinquency rate is only 2.4 percent.

Tips for choosing a trustee

There are many reasons why Virginia estate holders may want to create trusts. One major reason may be for the avoidance of probate. You may also want to state the terms of the distribution to your beneficiaries as opposed to them receiving all your assets outright at once.

The trust creator can specify if access to the trust or distributions will change when heirs reach a certain milestone or age. A distribution may happen all at once or over time.

Credit card debt could become costlier

Many people in Virginia and across the country are struggling with overwhelming debt, especially as credit card fees and interest rates mount. In March of 2018, the U.S. Federal Reserve announced an increase in the federal funds interest rate from 1.5 percent to 1.75 percent. Even though this rate is not a consumer rate and reflects a bank-to-bank lending rate, it is used as a benchmark for consumer loans, credit accounts and even savings accounts. An increase in the federal funds rate means that interest rates on consumer debt rise as well.

Because credit cards often have a variable interest rate, the escalating fed funds rate can be reflected in credit card rates, making it more expensive to carry credit card debt from month to month. Because credit cards use compound interest, a person's existing balance can also become costlier. The Federal Reserve itself noted that average interest rates for credit cards sat at 15.32 percent APR in February 2018, an increase from 14.99 percent in November 2017.

3 most common questions about bankruptcy

Most people have a passing knowledge of bankruptcy, but when you are considering it as an option for your financial future, you need to know all the details. It can be overwhelming at first to research this information. If you want to find debt relief and reclaim your finances, though, it is well worth the effort to find answers to your questions. Countless people gain financial freedom through bankruptcy.

It is important to enter the process as informed as possible. Do not rely on any single source for information, and do not trust all advice from family and friends. Empower yourself by asking questions and learning whether bankruptcy is the right option for you.

Getting organized can be the key to a quality estate plan

When a Virginia resident passes away, his or her assets will be distributed to other parties. A Will can ensure that those assets are distributed in accordance to the deceased's wishes. However, simply having a Will doesn't mean that an estate plan is complete.

Ideally, an estate holder will have a financial power of attorney, a health care directive, a Will and a living trust. Assets in such a trust can be used for a person's benefit while alive and then pass to a beneficiary without the need to go through probate. The durable power of attorney entrusts another party to make decisions related to paying bills, filing tax returns or other designated tasks. With a health care directive, an estate holder can address consent issues regarding medical treatment.

Understanding bankruptcy and credit impacts

Many people in Virginia are facing a daily crisis and financial struggle with the weight of overwhelming debt that may seem impossible to pay back. As late fees, interest charges and other expenses accumulate, these people may be looking for a solution or a way out from this landscape of debt. Bankruptcy can offer an alternative financial path, but many people are hesitant to approach this decision because of their concern for the future of their credit report and financial lives.

It is undeniable that bankruptcy has a substantial negative impact on a person's credit report; for people who had decent credit, bankruptcy can cause a credit score to fall by 200 points or more. However, this credit score drop is temporary. In fact, not all bankruptcy information is even available on a credit report for 10 years; only a Chapter 7 bankruptcy filing persists on a report for the full decade. When people file for Chapter 13 bankruptcy, they enter into a court-supervised debt repayment plan. Chapter 13 bankruptcies may only affect a credit score for seven years.

What you might expect if you die without a will

A will is one of the most common legal documents around. It serves the very useful purpose for the will's maker of expressing clearly to the state and to potential heirs how an estate should be handled upon the author's death.

Many would likely agree that a will is such a common sense device to ensure that your desires are known and that your successors are relieved of difficult decisions that it is hard to fathom why everyone doesn't have one. Yet, the truth is that many people do not. Even when a will is in place, it often isn't properly updated to reflect changes of life that have occurred.

How does bankruptcy affect your children?

Bankruptcy can be an intimidating process when you do not know what to expect. You worry about your current and future financial security, you worry about losing property, you worry about how you are going to rebuild your credit, and you may even wonder how it will affect your children.

The good news is that all these worries can go away with proper planning with an experienced attorney. You can get through the proceedings and start rebuilding credit, retaining most assets and preparing for any consequences for your children.

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