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Getting free of debt seen as impossible by many Americans

Only 13% percent of people who are part of the millennial generation and have credit cards are debt free, according to a report. The report, released by CompareCards.com, also found that credit card debt is a greater drag on the finances of millennials in Virginia and around the country than student loans. Among Generation Xers, only 11% who have credit cards are debt free.

Baby boomers are more likely not to have debt, as 29% of members of that generation who have credit cards said they are debt free. According to the report, student loan debt is an issue for 36% of millennials and 67% of millennials have credit card debt. Approximately 25% of cardholders overall believe they will still be in debt when they die. More specifically, 19% of men and 25% of women believe they will always have debt. Among people in that group, 16% have annual household incomes in excess of $100,000.

Chronic illness and estate planning

Almost 157 million people in the United States will have some form of chronic illness. For people in Virginia who have a chronic illness or has a loved one who is chronically ill, it is essential that they have an estate plan that adequately addresses their health and aging issues.

The legal documents that should be in the estate plans for people with chronic illnesses are typically no different than those for typical estate plans for people who are not chronically ill. However, it may be necessary to modify the legal documents so that they are able to directly address specific needs and challenges.

Is it time to prepare for your estate planning meeting?

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.

Medical debt is the leading cause of personal bankruptcies

About 530,000 people around the country file for bankruptcy each year, and most of them do so because of overwhelming medical debt. A recent academic study revealed that two out of three personal bankruptcies are tied to medical debt, and many Virginia consumers who seek debt relief every year because of doctor or hospital bills had health insurance that proved to be inadequate.

Lawmakers thought they had addressed this problem when they passed the Affordable Care Act in 2010, but the figures suggest that the landmark law has made little, if any, difference. Many Americans turn to credit cards to pay unexpected medical bills or cover their basic needs when an injury or illness prevents them from working, but this often leads to a downward spiral of inescapable debt.

Passwords can be important to estate planning

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.

Patients face mounting medical debt

Medical treatment can leave people in Virginia struggling with massive quantities of medical debt. People across the country are facing costly medical bills that they cannot afford to pay, even when they have health insurance in place. In fact, medical debt is the leading issue linked to personal bankruptcy filings across the country. Patients worried about medical bills can take some steps to minimize their exposure to health-related debt.

People struggling with illness may also need to take on another task: understanding the complexities of their health insurance plans. Many people face costly medical debt because they receive care from doctors deemed out-of-network by their insurance companies. In some cases, these out-of-network facilities and providers may be much closer or have stronger reputations in the particular care needed. However, patients may face limited coverage or none at all. In addition, some insurers require specific processes to obtain permission to see a specialist, receive an imaging test or undergo surgery. By working with these processes, people can work to improve their chances of stronger coverage from their insurance plan.

A judgment may not be dischargeable in bankruptcy

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.

Estate planning is vital for unmarried LGBTQ+ couples

Who can forget the overwhelming joy many in the LGBTQ+ community felt when the U.S. Supreme Court handed down its decision to effectively legalize same-sex marriage across the United States? That said, that decision obviously did not mandate every LGBTQ+ person to enter into a marriage. On the contrary, choosing to remain unmarried is one way to assert your legal rights. 

As you probably know, marrying your partner automatically conveys certain legal protections and other benefits. If you decide never to walk down the aisle, though, estate planning may be even more important. Here are a few planning tips for unmarried LGBTQ+ couples: 

Credit card debt at highest level since 2008

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.

How to approach estate planning

Virginia residents may have an idea of what an estate plan is. However, they may think that it is something that they create at some point in the future. Ideally, individuals will create a plan as soon as possible and continue to update it as they get older. This is often a good idea even for those who don't think that they have a lot that they need to account for.

If a person owns a car, has an online account, or owns a home, those items should be included in an estate plan. Reviewing a plan can come in handy because decisions made in the past may no longer be appropriate. For example, someone who was named to be a child's guardian might not be the right person to assume that role now.

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