Why Loan Programs Hurt The US Debt

Being in debt isn’t desirable for anyone—unfortunately, it’s a reality for most people in the U.S. Debt consumes our lives and dreams through most people having to file for bankruptcy during some part of their life. Bankruptcy in the U.S is higher than its ever been before—there are various factors for why, but it’s primarily due to medical bills and college loans that people rely on to survive and better themselves. Student loan debt is the second-highest consumer debt in the U.S—the endless race of a degree’s importance is catching up to many in the form of crippling debt. Students are unable to provide themselves a quality state of life, even after college because of the high interest rates of loans—during college there are more than 44 million borrowers who collectively owe upwards to 1.5 trillion dollars to a hard money lender, only in the U.S. The severity of student loans is something that is nearly unmanageable, especially considering the U.S financial climate, the gap has become far too wide for debt to paid off in this decade for loan programs. The route most people to be seeking is to find debt relief, to give them a potential chance to start over and make their debt a bit more manageable—debt relief is one of the highly sought-after services in the U.S, because its impact ruins lives for a lifetime if not minimized.
The U.S debt crisis isn’t new, however. Outstanding private loans have been rapidly collecting for decades now until it simply became unable to ignore how it was causing a decline in the economy. In 1989, the U.S debt was only half of America’s economic output, but as of 2017 the national debt exceeds what America produces in an entire year. What does this mean for our economy? The national debt wipe out funding for the Social Security Trust Fund, leaving many baby boomers without retirement benefits, and an increase in taxes when the U.S debt doesn’t allow for loans from other countries. People are responding to the crumpling economy by filing bankruptcy, statistics show in 2013 there were a total of 333,626 Chapter 13 bankruptcies filed in the U.S., but there are a few different types of bankruptcy that determine how its affect the longevity of a person’s credit.

What Are The Types of Bankruptcy?

Chapter 7: Basic liquidation for individuals and businesses, typically known as “straight bankruptcy” This form of bankruptcy causes assets to be forfeited to satisfy as much existing obligations of the debtor as possible, to have their remaining debts wiped out. Chapter 7 bankruptcy usually takes 6 months to complete and stays on your credit report for a decade with a hard money lender.

Chapter 9:Known as municipal bankruptcy—federal tool for resolving municipal debts

Chapter 11:Rehabilitation or reconstruction—Chapter 11 allows people to retain their assets, but restructure debt obligations to make repayment easier with a hard money lender. Typically, this is the most common type of bankruptcy for business debtors as a form of corporate financial restructuring.

Chapter 12: Agricultural Rehabilitation (Farmers and Fisherman)

Chapter 13: Allows for payment plans and rehabilitation with a steady source of income. Growers are able to devise a system of payment—Wage Earner Bankruptcy.

Chapter 15: Allows foreign debtors to clear their debts—Chapter 15 addresses international bankruptcy issues.

How To File For Bankruptcy

Although the media makes filing for bankruptcy an undesirable and ominous task, seeking a form of debt relief through a hard money lender is the route most are taking to solve this growing issue. Asking yourself the thought questions about your financial issues helps you assess if bankruptcy is the right choice for you —bankruptcy is typically a resource used when a person’s debt exceeds their income considerably. To determine bankruptcy there are services that can assist your eligibility, such as a bankruptcy law firm that can assist you through trying times. A bankruptcy lawyer will be able to tell determine an inventory of all liquid assets along with additional sources of income (I.e, retirement funds, stocks, bonds, real estate, vehicles, college savings account)—even if legal help seems out of your reach a low cost bankruptcy attorney is available to bridge the gap between piling debt and a way to find debt relief.

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