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Are millennials killing off Chapter 7 bankruptcy too?

Millennials are often blamed for any number of things, including taking down entire industries. From credit cards to divorce, news articles have placed an enormous amount of blame on this generation of young adults. But could they also soon be responsible for eliminating things like Chapter 7 bankruptcy? While some people in California might be hopeful, it is unlikely that it will happen.

In general, the financial priorities of millennials are about the same as their parents. A NerdWallet survey asked a group of adults spanning the millennial and baby boomer generations how they would use an extra $1,000 in a single month, and found their answers strikingly similar. The vast majority of both generations responded that they would either save or invest the money. They did differ on at least one matter, though. Despite the association of millennials with loving to travel, 7% of baby boomers said they would use the money to travel, but only 3% of the millennial respondents said they would travel.

Can Chapter 7 bankruptcy address growing consumer debt?

Borrowing money is not necessarily a bad thing. From taking out mortgages to buy homes or auto loans for vehicles, borrowing can often feel like a necessary part of moving forward in life. However, for some people in California, what might have felt like relatively safe approaches to borrowing can quickly spiral out of control. In such instances, Chapter 7 bankruptcy can be a viable option for debt relief..

Americans in general seem to be more confident when it comes to borrowing. Unemployment rates are relatively low and the economy is doing well, so taking on additional debts can feel like a safe move. However, all of that borrowing has led to $13.3 trillion in consumer debt nationwide.

Whiplash common outcome of motor vehicle accidents

Most people in California associate severe injuries such as broken bones and obvious signs of trauma with serious car accidents. While these are very real risks associated with motor vehicle accidents, some injuries are less obvious and harder to diagnose. For individuals who were recently involved in a car accident, here are some symptoms that are associated with whiplash.

Soft tissue injuries are common in car accidents, and whiplash is the most common type of this injury. Whiplash occurs when a person's head violently snaps back and then forward. While virtually anyone involved in an accident can suffer a whiplash injury, drivers and passengers who are rear-ended by other vehicles are the most frequent victims. Largely due to negative connotations that have developed over the years, this injury is also referred to less and less frequently as whiplash. Instead, terms like cervical strain, cervical sprain and hyperextension injury are used more often.

Credit card interest rates could lead to Chapter 7 bankruptcy

Falling deeper and deeper into credit card debt is easier than some California consumers might think. After all, credit card companies generally make special offers to their customers, including things like temporary low interest rates, rewards points and more. Unfortunately, spending in order to earn those rewards might not pay off. Instead, it could be leading some people further and further into the kind of debt that only Chapter 13 or Chapter 7 bankruptcy can address.

In Jan. 2019, Americans carried an almost record amount of credit card debt -- $1.034 trillion. While this much credit card debt can be attributed to a number of factors, part of it might be consumer confidence. Currently approximately 66 percent of people in the United States believe the economy is in good shape. That is 17 percent more than back in 2009.

What is an automatic stay?

Prior to filing for bankruptcy, you likely have been bombarded with calls, messages and emails from creditors demanding their money.

Filing for bankruptcy will create an automatic stay. This will stop any creditor or bill collector from seeking to get their money back from you.

Victims of motor vehicle accidents deserve help

You probably never expected to be injured in an accident. The sad reality is that many unsuspecting people in California suffer serious injuries  in motor vehicle accidents, truck collisions and more. Like other victims, you might be wondering how you will pay your medical bills and deal with other economic damages, like lost income from taking time off work. While the situation might feel hopeless, you have options.

If your injuries were the result of another person's negligence, you can seek compensation through a personal injury lawsuit. While these claims are most often associated with car accidents, they can also apply to people who were injured on motorcycles, bicycles or even by a third-party at their job. However, it is not enough to simply say that another person caused your injuries.

Several injured in California motor vehicle accident

California police believe that the driver who apparently caused a multi-vehicle accident was under the influence of illicit drugs. They charged the driver with a felony DUI, although toxicology reports have yet to determine whether this was the case. In total, seven vehicles were involved in the motor vehicle accident, which resulted in several injuries.

The 19-year-old driver who supposedly sparked the multi-vehicle collision was headed eastbound on Highway 18. According to authorities, he sideswiped another vehicle and then lost control of his own car. He crossed into westbound traffic, striking several other vehicles in the process.

Could Chapter 7 bankruptcy address growing auto loan debt?

Car owners in California often take pride in their vehicles, but some may be struggling to keep up with their monthly payments. While owning a car is often necessary for employment, some people could see a large chunk of their paycheck going straight toward their auto loan. Although it is possible to eventually pay off a car in several years and live payment-free, getting to that point can be difficult. In such cases, Chapter 7 bankruptcy might be a better option.

Auto loans are nothing new, but they are certainly growing in size. Over the last 10 years, debt for auto loans has ballooned by over 75 percent. American consumers owe a collective $1.2 trillion in auto loans. So what is behind the significant boom in vehicle debt? The increasing popularity of vehicles like crossovers and SUVs -- which are more expensive -- could be partially to blame.

Company announces successful exit from Chapter 11 bankruptcy

Many California companies have used the bankruptcy remedy to achieve an economic reorganization and emerge from bankruptcy in good operating condition. It may seem counter-intuitive, but there are numerous investment companies that are willing to consider putting money into companies that have filed a Chapter 11 bankruptcy, which is the business reorganization chapter of the federal Bankruptcy Code. Investors may take a percentage of ownership in the company in return for infusing fresh capital into the enterprise.

In the best of worlds, the company that has filed Chapter 11 will not miss a beat in its daily operations. It will continue to operate, employees will continue to work and be paid and the vendors and contractors to the company will be accommodated through a workable Chapter 11 plan. A Chapter 11 may also allow the company the ability to reduce secured debt down to the current value of the collateral.

Can Chapter 7 bankruptcy help with high debt-to-income ratios?

Credit cards are a convenient way to help bridge the gap between expenses and income. Unfortunately, these handy cards also make it incredibly easy to get into debt. While anyone of any age in California can find themselves in need of debt relief through Chapter 7 bankruptcy, some people could be have more of a need than others.

The average American has $5,331 in credit card debt. To make matters worse, most people do not -- or cannot -- pay off their balances in full every month. However, those between the ages of 45 and 54 could be struggling more than their younger and older counterparts. Even though this age group is rapidly heading toward retirement, they carry a little over $9,000 each. By age 75, average credit card debt declines to $5,638, closer to the national average.

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Farhat Law Firm, APC
232 E. Grand Boulevard
Suite 202
Corona, CA 92879

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