Virginia residents struggling to cope with unmanageable bills sometimes see debt management plans as a way to pay off their debts while maintaining their credit scores, but research indicates that 40 to 45 percent of these plans is abandoned long before they are completed. When developing debt management plans, credit counselors urge creditors to reduce their rates and minimum payments in return for an assurance that debts will be paid off fully over a three- to five-year period.
Obtaining a credit card is relatively easy, even for young adults. In fact, as of July 2016, the amount of revolving debt for American families totaled nearly $970 billion, according to the Federal Reserve. Virginia residents might be interested in reading about the good and bad features of credit.
Many Virginia residents file for Chapter 13 bankruptcy as a way to get out of debt while retaining their most valuable assets. Debtors who file under this chapter can keep their home, car and other valuable property while they pay off a portion of their debts over three to five years. After the repayment period is over, some of the remaining unsecured debt may be discharged.
According to one study, the average American household has $5,700 in credit card debt. Furthermore, more than 38 percent of American households have a credit balance of some sort. Those over the age of 75 have the lowest average credit card balance with $5,638 while those under the age of 35 have the second-lowest average debt at $5,808. Households earning over $160,000 a year have an average of $11,200 in credit debt, which shows it effects people of all income levels.
Although it may seem intimidating, bankruptcy can provide Virginia residents with options for addressing excessive debt that has accrued because of different types of life circumstances. In some cases, the mismanagement of finances can lead to unmanageable debt. However, many individuals and families find that the loss of a job or a serious medical condition can have a negative impact on the ability to pay bills. A common concern is how bankruptcy will affect one's financial dealings in the future, especially in situations such as refinancing a home.
Virginians who file for bankruptcy aren't necessarily guaranteed that their future earnings will be excused from old debt. In one August ruling, a bankruptcy court judge decided that a man who had filed for Chapter 13 and had the plan confirmed must use the funds he later received from a motor vehicle accident settlement to repay his debtors.
There are many events that could lead to Virginia homeowners being unable to make mortgage payments. However, they might not know what to do when falling behind on payments. A house is a secured debt, so payments must continue when staying in the property. If foreclosure is possible, a homeowner needs to act promptly and take the threat seriously.
In today's economy, it's easy to quickly accumulate large credit card debts. Using this mode of instant cash can be handy for people who want to keep track of their purchases and improve their credit ratings; however, paying off high-interest credit cards can be quite challenging. There are several solutions that may be of interest to Virginia residents who are having trouble ridding themselves of their credit card debts.
According to a ruling passed in a Virginia bankruptcy court, obligations that are not related to maintenance, alimony or support can be discharged in Chapter 13 bankruptcy. The decision was based on the judge contention that the plaintiff, the ex-wife, did not prove that there was an agreement for the indemnity provision in a property settlement to create an obligation. The court further stated that under Section 1328(a), the Bankruptcy Code Section 523 discharge exemption for domestic support obligation does not apply to a Chapter 13 discharge. Other factors that contributed to the judge's ruling included both the financial standing of the plaintiff and the defendant and the purpose of the obligation when the property settlement was agreed upon.
Virginia residents who have more debt than they can afford to pay off in a reasonable amount of time may decide to file for bankruptcy. Individuals may choose to liquidate all of their available assets to pay off creditors under Chapter 7 bankruptcy or develop a repayment plan under Chapter 13 bankruptcy and keep assets like a house and a car.