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.
Debt collectors in Virginia and around the country have become increasingly aggressive in recent years, and daily calls demanding payment have become the norm for people who are struggling to make ends meet. The tactics used by third-party bill collectors often border on harassment, and they may also violate federal law. The Fair Debt Collection Practices Act was signed into law in 1977 by President Jimmy Carter, and it prohibits debt collectors from engaging in unfair, deceptive, or abusive practices to secure payment.
Failing to make a car payment on time could result in an individual's vehicle being repossessed. However, lenders in Virginia and throughout the country don't want to see that happen. Usually, it is more expensive to repossess a car as opposed to working out a new payment plan. They will generally work with those who reach out to them in a timely manner. Car owners can also look to refinance their vehicles in an effort to create favorable payment terms.
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.
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.
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.