New York is home to some of the nation's finest universities, and the students who attend them often take on tens of thousands of dollars of debt to pay their tuition and living expenses. Individuals who are struggling to make student loan payments often believe that this type of debt cannot be discharged in a personal bankruptcy, but this is not always true. While the Bankruptcy Abuse Prevention and Consumer Protection Act does make student loans exempt from discharge most of the time, the 2005 law does allow relief to be granted to prevent undue hardship.
Most of the people in New York and around the country who file personal bankruptcy do so because of overwhelming medical debt, and many of them find themselves in an unsustainable financial situation after losing their health insurance coverage. Individuals often lose their health insurance after leaving a job or going through a divorce, and a coverage gap of only two years makes bankruptcy twice as likely according to a recent study.
For many people in New York dealing with insurmountable debt, a lawsuit from a debt collector may be a very serious concern. Of course, legal action is only one of the pressure tools used by collection agencies. People may deal with phone calls, letters and other attempts to collect a debt. Over 70 million people across the country have dealt with collectors at some point or another, and one-quarter of those felt threatened during those encounters. In order to handle a legal threat or a lawsuit over an unpaid debt, it is important for people to understand their rights.
A survey from U.S. News & World Report found that 21% of Americans don't know if they have credit card debt. It also found that Americans don't always know the interest rate on the debt that they do have. Of those who were surveyed, 37% said that they had just one credit card while 12% said that they had five or more credit cards. There are many ways that debtors can get a handle on their balances such as transferring them to new cards.
Young people in New York and across the country are facing a growing debt burden. While millennials were once known as a generation averse to borrowing, especially after they came of age during the financial crisis of 2008, an increasing number of young Americans now owe a significant amount to credit card issuers. Of greater concern is the indication that more of them are also having trouble paying their bills. Americans aged 18 to 29 now have a greater amount of debt overdue by at least 90 days than at any time in the past eight years.
Many people in New York have trouble dealing with medical bills. Pursuing necessary medical treatment may leave Americans with substantial debt that is almost impossible to repay. In fact, over two-thirds of all bankruptcy filings across the country involve medical expenses as part of the overall debt burden. According to a recently released study, around 530,000 people and families file for bankruptcy every year due to the financial impact of a serious illness.
There has long existed a significant gap between what an average man and woman makes for an equivalent job in New York. Although there certainly are other factors to consider, such as spending and borrowing habits, this wage gap has contributed to what is now seen as a "debt gap."
Some New York consumers who are struggling with credit card debt might be considering a debt settlement arrangement. There are advantages and disadvantages to this as a solution.
Individuals in New York struggling with student loan debt may be interested in the new bankruptcy rules that are being proposed for students who have debt. Student loan debt in the United States is estimated to be around $1.4 trillion. Billions of dollars of student debt are at least 90 days delinquent according to the Federal Reserve Bank in New York. It is clear to see the burden that student loan debt is having on many people.
Filing for bankruptcy can offer the potential for a new financial future for people in New York struggling with the weight of insurmountable debt. Despite the potential benefits of bankruptcy, however, many individuals hesitate before filing. In some cases, people regard bankruptcy filings as a type of failure on a personal and financial level and thus may be hesitant to take that step. However, the consequences of waiting can cause someone to be in a far deeper financial hole from which to emerge.