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Two major kinds of bankruptcy for Virginia individuals

People in Virginia who are struggling to make payments on their debts might consider filing for bankruptcy. There are a number of factors they should consider before they file, including the total amount of debt, types of debt and income levels. For most individual filers, there are two types of bankruptcy that might work to discharge their debts: Chapter 7 and Chapter 13.

In a Chapter 7 bankruptcy, the petitioner liquidates his or her assets in order to pay off debts as much as possible. In many cases, the petitioner will be able to keep some important assets like a car or tools of the trade. Not every person can get a discharge via Chapter 7 bankruptcy. The petitioner must first pass the means test by comparing income and allowed expenses to determine disposable income, which must be below a certain amount to qualify for Chapter 7.

Few Americans have estate plans in place

Many Texas residents agree that it is important to plan for the future when it comes to protecting their assets and making sure their loved ones are taken care of. This is in harmony with recent surveys showing that the majority of Americans understand how important estate planning is, but few actually have a plan in place.

In one survey, over 75% of the respondents said that legacy and estate strategies were important for everyone, even individuals who were not wealthy. However, less than 25% had actually taken the step of designating beneficiaries in case of their death. On the bright side, it is good that Americans recognize the importance of proper estate planning. It puts a person in control of what happens to the people and things they love if they are no longer able to care for them, like dependents, minor children and financial assets.

What does mandatory credit counseling involve?

There are several hoops you need to jump through before the court approves your bankruptcy. One is that you must attend classes where you learn about proper debt management. Virginia residents can take these classes online or in-person, but they are essential to get your finances back on the right track. 

Bankruptcy has helped numerous Virginia citizens overcome debt. However, it is much harder to go through bankruptcy than most people realize. There is one class you have to take before you file and another one to go through before a given deadline. You do not want to ignore these classes, or else it could jeopardize your bankruptcy proceedings. 

Reasons why bankruptcy fillings are low

Virginia residents may be interested in knowing some of the reasons why bankruptcy filings are at a 10-year low. According to a report from a Supreme Court Justice, both consumer and corporate bankruptcy filing rates are the lowest they have been in a decade. But the reason is not necessarily that people are doing better financially.

Around 1.6 million petitions were filed for bankruptcy in September 2010. Consumer cases made up the majority of those petitions. Under 800,000 cases were filed in September 2018, with 97 percent being consumer cases. The number of cases dropped by more than half in just eight years.

Using a pour over-will with a trust

When asked if a couple needed both wills and a trust, one attorney with an estate planning background provided answers. Virginia residents might have questions about estate planning documents and want to know more about this piece of advice.

Due to testamentary benefits, trusts can be used to transfer assets after a person passes. This is also one of the basic functions of a will. However, a will is likely needed even when an individual or couple has one or more trusts.

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.

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