The effects of the recession are still lingering
Image source: Flickr Creative Commons User Rich Anderson
The Great Recession is over, so says all the pundits, but perhaps someone should tell our wallets. For many families in North Carolina, the recession is still causing problems, even if it's gone - like a car wreck that's left us with residual aches and pains. A recent study published last month by the Federal Reserve on household financial well being shows that many of us are still struggling. Let's look at some of the results and how they apply to us here in NC.
► 38% said they were either just getting by or struggling – in rural areas of our state, this is even worse, where unemployment has continued to be an issue despite improvements elsewhere in the state.
► 34% said they were worse off and 34% about the same, while just 30% said they were better off. While this is an improvement, it's still tough that one-third of Americans are worse off than they once were.
► 42% said they've had to put off a major purchase or expense and another 18% have had to postpone a major life decision – this can mean people are putting off parenthood and/or the purchase of their first home.
► 61% said they don't expect their income to increase over the next year. For those that are struggling, the struggles will continue unless something significant changes.
► 33% of those that applied for credit in the last year were either turned down or offered less credit than they wanted – this can mean that either credit scores are suffering or people are overextended.
► 19% of people didn't even bother applying for credit because they were sure they would be turned down – this means that those among us with credit problems know they're in bad shape.
For those still feeling the effects of the recession, there are solutions. If you're just a bit behind on your bills, you may be able to alleviate your financial stress by cutting back on expenses or working a bit of overtime to earn some extra cash to put toward your bills. If you're significantly behind, it may be time to try and negotiate for some extra time or a lower payoff with your creditors. But if you're seriously behind on your bills, it may be time for more extraordinary measures.
Chapter 13 will buy you extra time to get caught up on your bills when your creditors aren't being cooperative about negotiating with you. A Chapter 13 repayment plan pushes creditors into allowing you three to five years on a scheduled payment plan to get your past due obligations current. This can help you stay in a house if you've fallen behind on payments or keep a car loan that you're behind on, and will usually give you some relief on your credit card and medical bills, as well.
For those in even more dire straits, a Chapter 7 bankruptcy can give you a clean sweep of most of your debt so that you can get a financial fresh start. If you've lost a house to foreclosure or a car to repossession, this type of bankruptcy will clear out any back balances. And unsecured debts like credit cards and medical bills will be wiped clean, as well. Only child support, alimony, student loans and some tax debts will remain (and some taxes may be eradicated as well).
If you're still feeling the effects of the recession in your household, contact the law offices of John T Orcutt to find out whether bankruptcy is a fit solution to address your debt dilemma and how it can change your life.