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Louisiana Legal Blog

Debt increases but it may not be a bad thing

Louisiana residents have contributed to the nearly $4 trillion in debt that Americans owe collectively. About $1 trillion of that debt is attributed to credit cards with another $2.93 trillion from other debts such as auto and student loans. Mortgage balances are not considered to be part of the $3.93 trillion figure. According to LendingTree, credit card balances are expected to increase by 5 percent through the end of 2018, which could bring that number right to the $4 trillion mark.

That would represent a $1 trillion increase in debt since 2013. While recent growth in consumer debts may worry some, an economist from LendingTree isn't that concerned. It was noted that Americans have put $2.5 trillion more in the bank than they have on a credit card or into a vehicle. Furthermore, homeowners have $10 trillion more in home equity than they did in 2008 while incomes are also growing at a strong rate.

Time restrictions on multiple bankruptcy filings

Filing for bankruptcy is often thought of as a one-time thing, and most filers believe they'll never have to file again after their first bankruptcy is finalized. For some people in Louisiana, though, more than one filing might be necessary during the course of their lives. Technically, there is no restriction on the number of times an individual can file for bankruptcy protection, but there are restrictions placed on when subsequent bankruptcies can be filed. The applicable time period varies based on the types of bankruptcy involved.

If a person has already gone through Chapter 7 bankruptcy, for example, and had it successfully discharged, he or she will have to wait at least eight years from the date the first case was filed before filing Chapter 7 again. If a person has already gone through Chapter 7 and wants to file for Chapter 13 bankruptcy protection, he or she must wait at least four years from the date the Chapter 7 case was filed.

Credit card users seek relief from debt

Many Louisiana consumers are struggling with credit card debt that is difficult to repay. On average, Americans have around $38,000 in personal debt, not including home loans. When financial circumstances change, it can seem impossible to handle debt repayment at all, and late fees and other penalties may begin to add up. In addition, when people make only the minimum payments on their credit cards, they continue to face escalating debt due to interest, even if they do not make any new purchases.

People who are facing credit card debt may look for a solution, and many turn to companies to settle or consolidate it. This is especially true when collection calls start to come in over time. However, there can be unexpected challenges that accompany efforts to seek debt relief. Companies may offer to arrange a debt settlement, but they may take significant fees for themselves even when their clients take a hit to their credit score.

When is the best time to refinance my student debt?

A recent study found LSU students carry student loan debt at a lower rate than both state and national averages.

The report states that while 48 percent of Louisiana students graduated with debt, the average debt per student borrower was $26,808, making Louisiana the 19th lowest in the nation. Pennsylvania students had the most debt per borrower ($36,139) while Utah had the least ($18,425).

How to know when bankruptcy is a good option

Filing for bankruptcy in Louisiana can have a significant impact on one's credit score. It can also affect a person's ability to get a loan in the future. Bankruptcies will stay on a credit report for up to 10 years, but lenders can ask borrowers to disclose a bankruptcy regardless of when it happened. There are alternatives to bankruptcy for those who are struggling to repay their debts.

For example, it may be possible to negotiate a debt settlement after missing one or more payments. Creditors generally prefer to get some of their money as opposed to potentially getting nothing in a bankruptcy case. Prior to filing for bankruptcy, an individual will need to go through a credit counseling course. Therefore, it may be a good idea to seek credit counseling voluntarily as a possible means of getting on track financially.

How to deal with personal debt

For many people in Louisiana, credit card bills are on the rise. This reflects a national trend: In the first three months of 2018 alone, household debt grew by $63 billion across the country. This marked the 15th consecutive quarter of growth in the nation's personal debt burden. Americans collectively owe $13.21 trillion in household and personal debt, including $815 billion in credit card bills and $1.23 trillion in outstanding auto loans.

Debt has become a way of life for Americans, and it can be difficult to find a way out. In the first place, people who are in debt need to understand exactly what they owe. They should list their debts, including the creditors, interest rates and monthly payments. In addition, people are entitled to a free annual credit report from each of the major credit bureaus. By reviewing their credit report, they can gain a complete listing of creditors as well as note any mistakes to petition for their removal.

Women may struggle with higher debt loads

Women in Louisiana may be at particular risk for a crippling burden of debt. The gender wage gap has been widely debated as a significant political and social issue. Some studies indicate that on average, women earn 72 to 82 cents for every dollar earned by men. At the same time, however, the gap is not only reflected in income but also in comparative levels of debt. Many more women have larger amounts of debt than their male counterparts. For example, women owe an average of $6,000 more on their student loans and almost $2,000 more on their auto loans.

Credit card debt also reflects a gender gap: Women owe about $1,500 more on average then do men while they also have around $1,100 greater medical debt than men. While some of these obligations reflect the different choices made by women with regard to spending and borrowing, in many cases they reflect a lower ability to repay the debt. Ongoing lower incomes over the years can cause women to fall behind in paying back their debt.

Credit card offers can lead to debt

When people in Louisiana sign up for a rewards credit card, they may not realize how easy it can be to wind up with an insurmountable amount of credit card debt. When people receive a signup bonus or other incentives to start using a new card, it can be easy to choose what appears to be a great deal. However, when early promotional periods come to an end and interest starts to rack up, people may find themselves in trouble, facing late payment charges and seemingly endless collection calls.

One issue that can arise for credit card holders is the appeal of some promotional rewards. Many credit cards offer different types of travel promotions. In some cases, people receive miles when opening a card; they may be able to buy tickets with more miles than they have in the account with later purchases credited toward the existing tickets. However, if people don't buy enough to make up the mileage gaps, they will need to buy the miles from the credit card or airline. Sometimes, the cost of these miles can be as much as or more than buying a regular ticket.

Which will benefit you more: Chapter 7 or 13

Filing for bankruptcy can prove beneficial if you find that debt has overwhelmed you. But how do you know which type to file for: Chapter 7 or Chapter 13?

If you are considering filing for bankruptcy, you are not alone. According to United States Courts bankruptcy filings, Louisiana has one of the highest rates of bankruptcy. What are the benefits of Chapter 7 and Chapter 13?

Women struggle with mounting credit card bills

Louisiana women with mounting credit card debt are not alone in their struggles. Even though Americans of all genders are widespread users of credit cards, more women credit card holders are concerned about their ability to repay their mounting debt burdens. Across the country, credit card debt is at the second-highest point it has been since 2008, when a major financial crisis shook the American economy. Indeed, in one quarter in 2018, Americans accumulated $30 billion in personal consumer debt.

A recent study noted that 26 percent of women said that they were not confident they could repay their bills in full that month. On the other hand, 14 percent of men shared the same concern. Women make 80 percent of what men do on average, meaning that most women have to work more hours in order to escape their debt burdens. This is reflected in payoff rates; while one-fifth of men said that they had been able to pay off their bills once or not at all in the past six months, almost one-third of women said the same.