medical bills

Emergencies can lead to out of control debt

Posted on by McIntyre Thanasides

Before the 2007 recession, the majority of Americans were not putting much thought into their emergency savings account. Without any “just in case” emergency funds, when people starting getting laid off and being forced to take pay-cuts, many no longer could afford their lifestyle. Some saw their homes go into foreclosure, while others had to deal with the constant calls from bill collectors.

Since then, while the economy has started to rebound and some are trying to save for emergencies, almost half of Americans still have more credit card debt than that saved in emergency funds. Bankrate.com conducted a survey by questioning 1,004 participants over the phone. This is the third year in a row the company has conducted this survey.

In 2011, 52 percent reported having more in savings than in credit card debt. The following year, in 2012, the overall percentage increased to 54 percent. In this most recent survey, 55 percent reported having more in savings than in credit card debt.

At first glance, this certainly seems encouraging. More and more are starting to save for emergencies. However, Greg McBride, who is a senior financial analyst with Bankrate.com, said that people are still not saving enough. Even with the better overall economic situation of the U.S., not enough attention is being given to saving for an emergency.

The issue is that, even though the economy has improved some, without money in savings, Florida residents will not be able to pay for emergencies. For example, if suddenly a homeowner comes down with a debilitating disease, there will be medical bills. However, since there is no extra money put aside to pay these bills, the homeowner will have to dip into the funds he uses for his other bills, like his credit card and mortgage. This in turn can lead into a vicious cycle where the homeowner owes money to multiple entities and just cannot keep up. In some cases, the threat of foreclosure can become very real.

In cases like this hypothetical one, or really any situations where debt is becoming overwhelming, instead of continuing to stress out, talk with an attorney who has experience handling debt relief cases.

Source: ABC News, “Nearly Half of Americans Have More Credit Card Debt Than Savings”, Susanna Kim, Feb. 25, 2013

Tampa residents can learn from celebrity bankruptcy filings

Posted on by McIntyre Thanasides

While most residents in Tampa, Florida, live their lives without their financial troubles being broadcasted on the news, there is something residents can learn from looking at the debt problems facing certain celebrities. Not only do their stories show anyone can run into financial hardships, but it also proves that debt relief options are often available.

Take for example the recent news that former supermodel Janice Dickinson filed for bankruptcy. The 58-year-old reportedly has more than $1 million in debt. This money is owed not only to the government in the form of unpaid taxes, but also to plastic surgeons and cosmetic professionals.
At one point, the claim is that Dickinson was even facing the possibility of eviction for falling behind on her monthly rent payments by three months.

When asked about her bankruptcy, Dickinson did admit that she had fallen behind and feels terrible about the money she owes. However, bankruptcy may be one way for her to get back on top of her finances.
For Tampa residents hearing of Dickinson’s bankruptcy, while their own debt issues may not be in the form of owing plastic surgeons, any Florida resident can run into debt. Whether it is in the form of credit card debt, unpaid medical bills or being behind on mortgage payments — or a combination of all three — being in debt is surely a frustrating time.
However, as Dickinson did, filing for bankruptcy is often an option.
In terms of filing for personal bankruptcy in Tampa, it is important for all residents to understand they are certainly not alone. Over the past several years, the area has been severely impacted by the downturn in the economy. In turn, this has led many residents who never imagined having financial problems to bankruptcy.
With personal bankruptcy, there are two types to consider: Chapter 7 and Chapter 13. With a Chapter 7 bankruptcy, assets are liquidated and debts are discharged. The financial slate is essentially wiped clean.

However, Chapter 7 is not necessarily for everyone and there are eligibility requirements. For some, this is where Chapter 13 can work to their advantage. With this type of filing, also commonly referred to as a wage earner’s plan, a repayment plan is created with monthly payments being made over the next three to five years.
When it comes to filing for bankruptcy though, while this can clear up debts and put an end to creditor phone calls, this is merely a brief overview and not something that should be done alone. Rather, many reach out to attorneys with experience handling personal bankruptcy cases in order to learn more about what debt relief options are available and to make the best choice for their individual situations.

Source: Los Angeles Times, “Former supermodel Janice Dickinson files for bankruptcy”, Nardine Saad, April 23, 2013