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Navigating out of credit card debt

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

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

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

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

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.

Estate planning can help young people

Young people in Virginia may not dedicate a lot of time or mental energy to thinking about estate planning. For many millennials, especially those who are single and do not have children, making out a will seems unimportant or a matter to be considered for the future. According to one survey, 78 percent of younger adults do not have a will or other estate documents in place. While many note that death is an unpleasant topic, for many people, the issue is simply off their radar.

Creating a will can be important, especially if the unexpected were to occur. This document spells out exactly how a person wants his or her assets to be distributed. If someone passes away without a will, state laws on intestacy will apply. For people who are single without children, their parents will generally inherit any assets. Even those who are satisfied with their parents receiving everything may want to save them time and potentially costly fees by making their wishes clear.

Rise in credit card delinquencies worries economists

Figures from the Federal Reserve suggest that a worrying number of consumers in Virginia and around the country are finding it difficult to make their credit card payments on time despite a robust economy and low unemployment. The credit card delinquency rate in the United States now stands at an alarming 2.47 percent. That figure was 2.42 percent at the beginning of 2017 and 2.12 percent in early 2015. This means that about $23 billion in this type of revolving debt is currently 30 or more days past due.

Just as concerning for economists is the reasons why many Americans are not paying their credit card bills on time. An online survey of 2,019 consumers conducted by the financial information and advice website NerdWallet revealed that almost two-thirds of those with delinquent revolving debt fell behind because they simply did not have enough money to make their minimum monthly payments. A third said that they needed the money to pay for essentials and 32 percent put the blame on an emergency or unexpected expense.

Likelihood of bankruptcy after retirement increases sharply

People are filing bankruptcy in their golden years more than before according to a study by a professor group. The professors used data gathered by the Consumer Bankruptcy Project and determined that the number of bankruptcy filings by people aged 65 to 74 grew by more than 200 percent between 1991 and 2016. In Virginia and across the U.S., the rate of bankruptcy filings by people 75 or older has more than tripled over that same period.

According to the study, one in seven people who files bankruptcy is 65 years of age or older, an increase of five times between 1991 and 2016. The mean of the ages of filers in 2007 was 44.4 years old; it increased to 48.5 over less than 10 years. The study says that's a statistically significant difference.

Important estate planning steps for new parents

Becoming a parent can change virtually every element of your life, from how you spend your money and time to how you make plans for the future. If you already have an estate plan in place, you may need to make some fundamental changes to it once you have a son or daughter of your own. Conversely, if you do not yet have an estate plan in place when you become a parent, it is a good time to get down to business creating one.

Creating your estate plan gives you an opportunity to leave a lasting legacy behind for your child, and it can also give you peace of mind when it comes to who will provide care for your child, should you no longer be able to do so yourself. While every estate plan is different, there are some important steps you may want to take with regard to it once you become a first-time parent. For example, once you become a parent, consider the following:

Estate planning involves more than just creating documents

Developing a viable estate plan involves more than just making a will for distributing assets. Virginia residents may be interested to know that the people they pick to carry out their plans can be just as important as the documents themselves. Picking the wrong representatives for estate planning tasks can have devastating effects.

There are several types of representatives a person can choose. For example, an executor manages the estate after the creator's death and is responsible for carrying out their last wishes as stated in the will. If a Virginia resident sets up a trust, they can set some guidelines for how they want it handled. A trustee makes the financial decisions on how the trust should be handled.

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