Northern Virginia Law Blog

Perhaps you have decided now is the time to tackle estate planning; you have put it off long enough.

What is your game plan? Which estate planning tools best address your situation? With an idea in mind and a little advance preparation, the task will be much less stressful and time-consuming than you anticipate.

Virginia residents often rely on their online accounts and mobile devices to manage important assets. Of course, managing an online account requires having access to digital passwords. While estate owners need to protect their passwords in order to preserve privacy and defend against theft, it's also important to think about how accounts will be managed in cases of death or incapacity.

When a spouse unexpectedly passes away, it can be difficult for the surviving spouse to gain access to important financial information, especially if there was no clear plan in place to transfer digital assets. Analysts note that missing information has always been an issue for the survivors of estate owners. However, it has become more challenging as more people rely on online assets to manage their assets. In fact, surviving spouses may not even be aware of all of the digital accounts that exist. In some cases, people can gain access through court orders or by presenting a death certificate. However, even this can be challenging if there are cryptocurrency accounts or overseas digital assets involved.

The purpose of Chapter 7 personal bankruptcy is to provide a fresh start for an individual who has fallen behind on obligations to creditors. Most Virginia residents are aware to some degree that certain categories of debt are not dischargeable in accordance with federal law. These include student loans, child support and alimony and government taxes. However, a question remains whether or not a judgment entered against the debtor can be discharged.

At first blush, it may seem inappropriate for a debtor to be released from a judgment that was based in some form of intentional or even negligent conduct. However, in evaluating whether a judgment is dischargeable, legal scholars explain that the bankruptcy court must look to the federal exceptions to bankruptcy and not simply assume that a state case resulting in a judgment met the federal standards. This is true even if the underlying state case dealt with fraudulent conduct.

According to Federal Reserve Data, Virginia residents and others have combined to accumulate $1.05 trillion in revolving consumer debt as of the fourth quarter of 2018. Consumers have accrued $870 billion in credit card debt, which beats the previous record high set in 2008. At the end of 2018, there were about 100 million more credit card accounts than in 2010. Between the final quarter of 2017 and 2018, there were an additional 37 million accounts that were 90 days past due.

The percentage of accounts that are 90 days past due has increased since 2016 to about 5%. However, this is still lower than in 2009 when delinquency rates were above 10%. Research shows that there is not necessarily a correlation between a person's credit score and the amount of debt that he or she has. This is because credit scores generally track whether a person makes minimum payments each month.