You might currently owe more than one lender money. It is not uncommon, nowadays, for California residents to have multiple loans out at once. Perhaps you have a mortgage, a car loan and credit card debt. If you run into financial trouble, it can be quite challenging to meet your monthly payments. Many issues, such as reduction of income, medical bills or some other family crisis, might throw your finances completely out of whack.
Escalating personal debt, unrepayable credit card bills and constant creditor calls may lead some Californians to think about their options for debt relief. For some people, personal bankruptcy can be an important way to work toward a new financial future. There are two major types of personal bankruptcy filings: Chapter 7 and Chapter 13. When choosing the right type of bankruptcy, debtors can benefit from asking certain key questions to determine which option may work best for their circumstances.
An individual in California can make as much money as he or she wants and still possibly be eligible to file for Chapter 13 bankruptcy. However, there are limits to how much debt a person can have at the time he or she files. An individual cannot have unsecured debts of more than $394,725 or secured debts of more than $1,184,200 and still qualify for a Chapter 13 filing.
California residents who are struggling to keep up with their debts may benefit from filing for bankruptcy. However, it should be seen as a last resort for those who don't have any other options available. In the case of a short-term financial shortfall, it may be best to speak with a lender to work out alternate payment arrangements. This could make it possible to avoid a repossession or serious blemish on a credit report.
Many young people in California and nationwide are dealing with a growing debt burden. According to statistics released by the New York Fed Consumer Credit Panel and Equifax, people between the ages of 18 and 29 owe $1.05 trillion in debt. This burden is comprised of a number of different types of obligations, particularly student loans. However, it also includes a substantial amount of credit card debt, auto loans and mortgage obligations. This marks an increase in the collective obligations of young Americans; the last time this demographic had over $1 trillion in debt was in 2007.