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Chapter 13 bankruptcy can help with the worsening debt crisis

For Virginians and people across the nation, debt is reaching critical levels. Student loans are perceived to be the culprit for the debt problems many Americans face, but there are other reasons. For example, people rely on credit cards to a troubling degree. The combination is making it nearly impossible to get ahead and forcing debtors to consider solutions like Chapter 13 bankruptcy.

Experian says that people owed $1.4 trillion in student loans in early 2019. This is 116% higher than 10 years ago. Credit card debt adds to their financial difficulties. Millennials do not accrue the same amount of credit card debt as past generations. Still, the bulk of the debt for those aged 25 to 34 is due to credit cards. A study by WalletHub suggests that credit card debt will rise by $70 billion this year.

The average household carries debt of more than $8,000. While people are blamed for their financial struggles, government-influenced student loans and how they impact credit card reliance are leading to a worsening financial situation. The cost of living has forced many to use credit cards to get by. High interest rates, governmental missteps and lack of oversight has lowered the value of the dollar according to some experts. It is a circular problem that prevents individuals and families from making headway to get on stronger financial ground.

People who are in debt and have nowhere to turn might resist the thought of bankruptcy. In truth, wage earners may benefit from Chapter 13 and pay a reasonable amount each month. In addition, Chapter 13 typically allows people to retain property like a home and a motor vehicle. To understand how Chapter 13 bankruptcy works, individuals may contact a law firm that specializes in debt relief to determine the next step.

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