Modesto Bankruptcy Lawyer Blog

As the holiday season came and went, U.S. consumers increased their dependence on credit cards and that has led to many people struggling to get out of the debt -- a prospect that these credit card companies try to avoid.

The Associated Press recently reported that November debt surged by $20.4 billion, the largest monthly gain in a decade. Most experts believe this was fueled by the holiday shopping season, as Americans set aside their economic worries and spent big during the holiday season.

Our Modesto bankruptcy lawyers recognize that people in bad economic situations attempt to make sure everything seems normal for their children by continuing normal spending habits, either because of embarrassment or trying to make sure their children aren't disturbed by a different routine. But this can lead to additional debt.

If joblessness is a factor and credit card debt is increasing as people search for employment and a steady stream of income, filing for bankruptcy in Modesto may be a workable option for your family.

For one, most credit card debt is eligible for discharge, meaning that whether you have five credit cards or ten and $10,000 in debt or $50,000, it's possible to have that debt wiped clean as you start over. Some people might say that they don't want to file for bankruptcy because they believe it will hurt their credit score.

But what people must consider is that if they have thousands in credit card debt already and have begun missing payments, their credit score is already poor. As months pass without payments and new fees kick in, the debt compounds. The creditors are reporting these problems to the credit bureaus and your score is likely low anyway.

Filing for bankruptcy is a way out of the continuous cycle of debt. It's a stopping point and a starting point. It ends the continuation of debt that piles on and never seems to stop. At the same time, it starts a fresh life, without the debt that is dragging down a person and their family.

As the Associated Press recently reported, consumer debt spiked in November as consumers were granted more credit cards for gifts and bought more cars with loans from banks. The Federal Reserve reports that credit card debt rose by $5.6 billion and auto loans jumped by $14.8 billion.

The Associated Press reports November was the third straight monthly increase in debt after the economy began showing modest gains. In December, employers added 200,000 jobs and the unemployment rate dropped to 8.5 percent, the lowest rate in three years.

Borrowing has increased in six of the last nine months and in November, Americans saved just 3.5 percent of their income, the lowest rate since the recession began in December 2007.

That could be a recipe for disaster, as lots of debt and little savings can put consumers in Modesto in a precarious position. Our bankruptcy lawyers know that times are tough and especially in California, where the economy hasn't improved as quickly as we had hoped.

Continue reading "Consumers Increase Credit Card Debt in Modesto, Nationwide to Start 2012" »

At least one Modesto family is hoping that 2012 brings some better fortune than 2011, as their finances have gotten difficult because of job loss.

This is a common refrain that our Modesto bankruptcy lawyers have heard in the last several years as many people struggle with the effects of the economy. Foreclosures, unemployment, high medical bills and other factors have led to financial ruin.

But there is help and it comes in the form of filing for bankruptcy in Modesto. Some people do all they can to avoid bankruptcy, while remaining unaware of the many benefits of these laws.

For people struggling with job loss, a bad mortgage situation or foreclosure, major medical bills that have turned into debt problems or credit card payments that have sparked late fees and high interest rates, bankruptcy can actually be very beneficial. it allows people to discharge their debts and break free from them while providing an opportunity to control their financial future.

Unemployment has hit California hard and Modesto is among the hardest hit areas nationwide, according to a recent report by KRCA.com. While unemployment rates nationwide have continued to drop slightly recently, Modesto still ranks among the highest cities for unemployment rates nationwide.

In fact, in November, 9 of the 10 worst cities for unemployment were located in California. El Centro, California had an unbelievably high 27.2 percent unemployment to lead all cities, while Yuma, Arizona checked in at 23.7 percent. Modesto ranked No. 6 overall at 15.5 percent.

The Modesto Bee recently highlighted one family that is struggling mightily with debt as a result of job loss and is using a Modesto bankruptcy to its advantage. The family of five has struggled since 2009, when David lost his job as a bottled water truck driver. Laura worked part time as a waitress and they owned a three-bedroom house, a boat and took frequent trips to Disneyland with their three daughters.

After David was laid off, the health insurance expired, the boat was repossessed and the trips to Disneyland stopped. The couple filed for bankruptcy to get protection from their debts as they begin to recover from the whirlwind that life has put them in.

Laura is working part time, going to school and seeking a job in the medical field. David is searching for jobs, but seeks disability pay for migraines. Despite a lack of healthcare, the family is able to cover two of their daughters who have pre-existing conditions and other low-cost medical options are helping.

Our Modesto bankruptcy lawyers believe that bankruptcy will go a long way toward helping this family recover from the difficult situation they find themselves in. By clearing off debts, families can begin the process of recovering and starting fresh. Bankruptcy laws are designed to help consumers struggling with debt. Allow these laws to help you if you are in a difficult financial situation.

Continue reading "Will The New Year Bring Better Finances For You? Modesto Bankruptcy Could Help" »