Keeping You Up-To-Date On Bankruptcy And Business Financial News.
This Administration will provide $39 Billion in Automatic Forgiveness on Student Loans for 804,000 Borrowers
In a recent article, the Department of Education discussed how this Administration would discharge over $39 billion in federal student loans for more than 804,000 borrowers in the coming weeks. The article states that these discharges are a result of fixes implemented to address historical failures of the Federal student loan program. Borrowers are eligible for forgiveness if they have accumulated the equivalent of either 20 or 25 years of qualifying months. This recent announcement is a significant step towards relieving the stress of student loan debt for many individuals and improving their mental and physical health. The Administration has approved over $116.6 billion in student loan forgiveness for more than 3.4 million borrowers. To learn more about this student loan discharge, click on the hyperlink to read the original article. [article published July 14, 2023]
Credit Card Debt Hits a New Record of $930.6 Billion, an 18.5% Increase From Last Year
CNBC.com’s interesting article identified that credit card debts increased by 18.5% from last year, hitting a record $930.6 billion at the end of 2022. During that time, the average credit card debt rose to $5,805. This increase was aided by an additional 202 million new cards opened in the fourth quarter of last year, predominantly opened by 18 to 25-year-olds, and the increased interest rates now averaging 20%. Unfortunately, as consumer goods and the cost of housing continue to rise, credit card companies will likely continue to raise the interest rates, which will make it more difficult for the average American to ever pay back their credit card debt. Bankrate calculated the time it would take to pay back the average $5,805 debt when a person only makes the minimum payments and found that it would take more than 17 years to pay the debt off and would cost more than $8,213 in interest. Please visit the CNBC page hyperlinked above to read more about this issue. [article published February 03, 2023]
As the average American faces hardships due to a lack of disposable income, it is smart to reach out to the Law Office of Jeffrey K. Greenwell, PLLC, so you can determine what your options are moving forward, and obtain the necessary guidance to make your way through this difficult financial time.
Bankruptcy Filings in September 2022 Are Higher Than Filings in September 2021
The American Bankruptcy Institute posted an article detailing the bankruptcy filings in September 2022 vs. September 2021. Although filings for 2022 (284,773) are down by 9% from 2021 (312,647), total filing rose in September 2022 (33,184) as compared to September 2021 (30,922), which is a 7% increase. This increase was due to individual filings increasing by 7% (31,190 vs. 29,201), commercial filings increasing by 16% (1,994 vs. 1,721), Chapter 11 increasing by 76% (437 vs. 249), and Subchapter V increasing by 84% (150 vs. 79). Many factors may be causing the increase. If you are experiencing financial hardships during this inflationary period, please feel free to contact our office so we can discuss your options, or visit our blog so you can better understand your rights.
Increased Mortgage Rates And Prices Are Slowing Down The Housing Market
The AP News provided an article about the Federal Reserve’s decision to raise short-term interest rates to fight inflation. Due to the rate increase, the interest rates on credit cards, mortgages, and auto loans have also increased. The added economic pressures on the consumer have caused the housing market to decline over the past five months, which has typically been the busiest time for home purchases. Today, the average mortgage rate has doubled from 2.78% last year to the current 5.54%. These added costs have provided consumers with very few options, including buying smaller homes, living in other neighborhoods, or abandoning the purchase until the market stabilizes.
If you have experienced financial hardships during this inflationary period, please contact our office so we can discuss your options, or visit our blog so you can better understand your rights.
U.S. Credit Reports Are Removing Some Medical Debts From Credit Reports
The A.P.News provided an excellent article detailing how credit reports will start treating medical bills. The companies will stop counting paid medical debt on the reports, give people a year to resolve delinquent medical debt (up from six months), and stop counting unpaid medical debt under $500. This change will wipe out nearly 70% of the medical debt listed on credit reports, which is important because almost 58% of debt on credit reports is from medical bills. [article published June 30, 2022]
Workers In The U.S. Are Quitting Their Jobs At A Record Pace
The A.P. Newshas a recent article discussing how 4.3 million people quit their jobs in August, the highest on record that dates back to December 2000. About 900,000 people who left their jobs were from the restaurants, bars, and hotel industries, while industries, where people could work from home, remained relatively flat. The article states that the sharp rise in people leaving their position in the service industry may represent a delta variant fear. Although many people are quitting their jobs, available jobs dropped from 11.1 million to 10.4 million. Please visit the A.P. News page hyperlinked above to read more about this issue. [article published October 12, 2021]
The Recession Caused By The Pandemic Was Over in April 2020
The Washington Post published an article that discusses how the Pandemic recession was the shortest on record, a mere two months. The recession started in March 2020, a month after the economy hit a record peak. The economy began to rebound by May 2020. Although the economic output has reached the pre-pandemic levels, the unemployment rate remains around 5.9% which is 2.4% higher than the pre-pandemic level. Please visit The Washington Post webpage for more on this issue. [article published July 19, 2021]
Total Bankruptcies For October 2020 Dropped 41% From October Last Year
The American Bankruptcy Institute published the latest numbers on bankruptcy filings. The article identifies that 40,209 total bankruptcy filings occurred last month, a 41% decrease from the 67,858 filings in October 2019. People in Montana filed 783 bankruptcies this year, a 38% decrease from last year. This year, there are approximately .96 filings per 1,000 people living in Montana, much lower than the national average of 1.78. Please visit the American bankruptcies webpage for more on this issue. [article published November 9, 2020]
The Latest Bankruptcy Statistics Are Out For August Bankruptcy Filings
The American Bankruptcy Institute released its latest report on monthly bankruptcy filings across the United States. Although Chapter 11 bankruptcies increased 11% nationwide from last August, the total number of bankruptcies dropped by 41%. There were 39,349 total filings in August as opposed to 65,530 total filings last August.
Year-to-Date, Montana has filed 653 total bankruptcies. Chapter 7 accounts for 85%, while Chapter 13 accounts for 13% of Montana bankruptcies. Montanans appear to be doing better financially than most of the other states. Only six states have lower per capita filings than Montana when the study includes the District of Columbia. [article published September 8, 2020]
Alarming News: 32.9% Decline In GDP For The 2nd Quarter Of 2020
The feds have released their first GDP estimate for the 2nd quarter of 2020, which is an astonishing 32.9% drop. GDP records began in 1947. Since that date, the most significant decrease occurred during the 1st Quarter of 1957, which was 10%. Even during the Great Recession, the most significant decline was 8.4%. Economists estimate that the Great Depression witnessed a 29% decrease in GDP, but that was over three years. Please visit Considerchapter13.org to review the Honorable Kevin R. Anderson’s report from the United States Bankruptcy Court for the District of Utah. If you are being affected by this drop in GDP through a decrease in income, loss of a job, or difficulty managing your bills, please get in touch with your Kalispell bankruptcy lawyer to discuss available options.
Nearly 30% or 12.3 Million Renters Nationwide Face Being Kicked Out Of Their Homes
The federal government imposed a moratorium during the COVID crisis that prevented landlords with federally backed mortgages from kicking out their renters for failure to pay the rent. That moratorium expires at the end of this month, which will put approximately 12.3 million Americans at risk of being kicked out of their homes. The House of Representatives passed legislation to create a $100 billion emergency fund that will provide renters up to 18 months to pay back missed payments. Still, the Senate has not adopted that legislation in their latest stimulus bill. Please visit WashingtonPost.com to read more about this issue.
If you are experiencing financial stress from the COVID epidemic, don’t hesitate to contact your local Kalispell bankruptcy lawyer for help. [article published July 21, 2020]
Business Debts Hit Records Dating Back To 1952
Firm debts increased by $754.8 billion in the first quarter of this year, the most significant increase in debt dating back to 1952. The debt hit $16.8 trillion, which now surpasses household borrowing. At the same time, debt is increasing; household net worth dropped from $117.3 trillion to $110.8 as stock prices dipped. Interest rates have dropped to near zero, while unemployment has hit a level not seen since the Great Depression. Corporations and individuals have been taking on debt at unsustainable rates, and the pandemic has exposed the vulnerability created by excessive debt. To read more on this topic, please visit bloomberg.com. [article published June 11, 2020]
Chapter 11 Bankruptcies Are Up 48% While Total Bankruptcy Filings Are Down 42%
The American Bankruptcy Institute published the latest numbers on bankruptcy filings. The article identified 722 Chapter 11 bankruptcy filings in May as opposed to 487 in May 2019. There were 39,969 total bankruptcies filings in May (1.98 filings per 1,000 people), down from 68,860 (2.09 filings per 1,000 people) bankruptcies in May 2019. These numbers may be a result of the government’s ability to keep consumers solvent during the pandemic. Hopefully, May’s Chapter 11 filings will not influence future consumer filings. [article published June 4, 2020]
Five Tips For Small Businesses To Survive This Pandemic
The American Bar Association provided a great article about the following five things that can help you and your small business survive this economic downturn:
- Stay current on legislation. Congress is introducing laws daily that can affect your business.
- Take the grant or small business loans offered by the government. Although this may add to your debt, it may be the only solution.
- Consult a reputable bankruptcy attorney. Your bankruptcy attorney will help explain how to navigate your financial distress.
- Remember that your business debts may not be your debts. Although many people sign personal guarantees on loans and other obligations, sometimes your business is solely responsible for its debts. Ensuring you have as little personal exposure as possible is another good reason to talk with your bankruptcy lawyer.
- Be proactive when thinking about your next steps. Look for financial opportunities, consult your financial advisor, or discuss your issues with your bankruptcy attorney.
To read more about this issue, click on the link above. [article published March 25, 2020]
40% Of Low-Income Workers, 19% Of Workers Making $40k to $100K, and 13% Of Workers Earning Over $100k Have Lost Their Jobs In March
Washingtonpost.com has an interesting article discussing the severe financial issues that surround both individuals and small businesses. According to a federal survey, over 18% of Americans do not believe they have enough money to pay their bills, while 35% of laid-off workers thought they would miss at least one payment in April. The coronavirus has also struck businesses. 17% of companies say they do not have enough cash reserves to last three months without revenue. 7% of companies have no cash, while 9.5% cannot cover more than one week of operating expenses. [article published May 14, 2020]
As Unemployment Hits 14.7%, Congress Considers More Aid
Unemployment hit 14.7% in April, and many expect it to exceed 20% by the end of May or June. The Whitehouse is considering a cut to the payroll tax, which is the tax that funds Social Security and Medicare, while the House is working on a bill to add more money for state and local governments, coronavirus testing, and the US Postal Service. To read more about this issue, visit the Reuters.com site. [article published May 10, 2020]
As Global Declines Continue, The United States Drops Out Of The Top 20 In the Rule of Law Index
The Worldjusticeproject.org compiled eight factors that measure how well a country’s justice system operates. The United States fell to number 21 this year. The United States’ global rank for each factor was 36th for civil justice, 22nd for criminal justice, 20th for regulatory enforcement, 22nd for constraints on government power, 19th for the absence of corruption, 13th for open government, 26th for fundamental rights, and 28th for order and security. Denmark, Norway, Finland, Sweden, Netherlands, and Germany were the top six countries. [index published March 11, 2020]
The Government Has Started Taking Applications For The Second Round Of PPP Loans.
After running out of money in 13 days the first go around, the federal government has set aside another $360 billion in emergency funds for small businesses through the Payroll Protection Program. This article identifies the number of processed loans, which shows the plight of American small businesses. The SBA is having tremendous problems processing these loans, creating frustration with both the banks and the small businesses attempting to obtain a loan. To read more about this matter, read this great article from nytimes.com. [article published April 27, 2020]
$8 Trillion In Economic Benefits, And Up To 50% Of Lives Saved Through Moderate Social Distancing
Washingtonpost.com has a great article on the number of lives that moderate social distancing can save and the net economic benefit that the saved lives are worth to the U.S. economy. The article cites how the virus could kill up to 2.2 million people in the U.S., but moderate social distancing may save up to 1.1 million lives. The dollar value to the U.S. economy of these saved lives is $8 trillion. Please click on the link above to read the article. [article published March 30, 2020]
The Government Orders Mortgage Payment Reduction Or Suspension For Up To 12 Months
NPR.org recently reported that homeowners who have lost their jobs because of the coronavirus might be eligible for up to 12 months of payment reductions or suspension. People may be able to testify about their distress over the phone and document the hardship later. Please read the article if you think you may fall into this scenario. [article published March 19, 2020]
Fannie Mae, Freddie Mac, HUD Are Suspending All Foreclosures And Evictions
The government announced that the Department of Housing and Urban Development is suspending foreclosures and evictions until April. If you have an FHA-insured Title II Single Family forward and Home Equity Conversion mortgage and are having difficulty paying your mortgage, you should contact your bank immediately to explore your options. Housingwire.com has a great article on this matter. [article published March 18, 2020]
The Senate Voted In Favor To Block A Secretary Of Education Rule
Thehill.com has a short article discussing how the Senate just voted to overturn a rule by the Secretary of Education that restricts the “borrower defense” rule meant to protect students misled by for-profit educational institutions. [article published March 11, 2020]
Ever Wonder How Much The Average American Spends On Christmas
Magnifymoney.com has a great article discussing the money spent during the holiday season and which generation spent the most. Interestingly, 78% of the people will not pay their holiday debt off in January, while 15% will only pay the minimal amounts owing on that debt. [article published December 27, 2019]
The Cost of Having a Child In The United States Exceeds $4,500.00, Even With Insurance
A study looked at 657,061 women who had insurance between 2008 and 2015. Out-of-pocket costs increased by approximately $1,400.00 – $1,700.00 during that time. As many expected, the percentage of women with insurance deductibles rose from 69 to 87 percent. The Atlantic’s article is an interesting discussion on this subject. [article published January 6, 2020]
Small Business Optimism Index Increased to 102.4 in October
Small business owners’ optimism outlook increased by 0.6 of a point in October. The most significant issue identified by business owners is finding qualified labor. CalculatedRISK has an interesting article outlining this issue. [article published November 12, 2019]
American’s Consumer Debt Hits $13.95 Trillion
Consumer debts have hit almost $14 trillion, with home mortgages taking approximately 66% of the debt. Since the securitized mortgage meltdown, the most significant shift in debt is in student loan debt, which has doubled and is now the second-largest consumer debt. For more information, check out the Reuters.com article. [article published November 13, 2019]
More People Are Finding Themselves Underwater On Their Vehicle Loans
The Wall Street Journal has a great article detailing the problems of trading in your old vehicle to purchase a new one. Over 33% of the people who traded in their cars in the first nine months of 2019 found themselves underwater (negative equity) on their loans. [article published November 9, 2019]
It Might Be Time To Tighten The Purse Strings
Two-thirds of all big cities are predicting a recession, while the Midwest is financially declining. A few indicators of a possible recession are slowing general fund revenues, weakening property tax receipts, and the beginning of spending growth being outpaced by revenue growth. For more information on this matter, please visit nlc.org. [article published October 28, 2019]
The Federal Reserve Cuts Interest Rates Once Again But States The Cuts May Stop Soon
The Central Bank lowered its benchmark funds, which banks charge each other for overnight lending, by 25 basis points. The new range is between 1.5% and 1.75%. To read more about how this will affect most forms of revolving consumer debt, please visit cnbc.com. [article published October 30, 2019]
Treasury Department Is Rolling Back Regulations Meant To Keep Corporations From Moving To Other Countries
In this article, NYTimes.com discusses how the Treasury Department is rolling back regulations to stop corporate inversions. The current administration calls the rules redundant since the tax breaks should prevent corporations from moving outside the United States. However, corporate tax breaks appear to be doing little to stop corporations from moving. [article published October 31, 2019]
Personal Loans Are Outpacing Credit Cards And Auto Loans As The Fastest-Growing Debt Category
Axios.com has an interesting article discussing wages vs. the cost of living for lower and middle-income households between 2008 and 2018 and how the disparity pushes people to obtain personal loans to pay their bills. [article published October 30, 2019]
Student Debt Nearly Doubles U.S. Housing Market
Student loans have reached $1.5 trillion, with Millenials making up approximately 34 percent of the total student borrowers. Montanans have roughly $3.3 billion in student loans, with 111,000 student loan borrowers. The average debt per borrower is $29,837. Please visit realtor.com if you would like a better understanding of this financial problem plaguing our economy. [article published October 15, 2019]
Easing Derivative Rules For Banks
The Federal Reserve proposed a rule to relax the cash reserve requirement for derivative trades between affiliates. Please visit Reuters.com if you would like to read more about it. [article published October 28, 2019]
Online Installment Loans
Subprime lenders use the online installment loan as a new vehicle to strap the middle class with large sums of debt. This new vehicle appears to have taken the place of the dwindling payday-loan market. Please visit Bloomberg news to read more about it. [article published October 29, 2019]
