Individuals in South Carolina who are seeking a fresh financial start may obtain it by filing for bankruptcy. However, in exchange for not having to pay off a medical, credit card or other type of debt, an individual may see his or her credit score drop significantly. It may be many years before a person is able to recover from the negative credit consequences that bankruptcy may bring.
Many people in South Carolina struggling to pay off debts truly desire to pay their bills and avoid bankruptcy. They might consider accepting a debt settlement deal with a credit card company or other creditor as an alternative to bankruptcy. Although settling a debt for a partial amount might present a reasonable solution in some cases, debtors should approach this route with caution.
People in South Carolina may be more likely to eventually file for bankruptcy if they have a gap in health insurance coverage. A study by the American Bankruptcy Institute found that a two-year coverage gap doubled the likelihood of a bankruptcy filing.
Generally, millennials and members of Generation Z in South Carolina and other states have been more cautious about debt than earlier generations. Part of the reason for this is because many of them lived through the recession that took place around 2008-10. But this trend may be reversing as more individuals within the younger generation continue to accumulate credit card debt.
Individuals in South Carolina and throughout the country may use their 401(k) balance to pay down debt instead of filing for bankruptcy. However, that may be a mistake as funds in a 401(k) are protected in a bankruptcy filing. The same is generally true of any money kept in an IRA. Furthermore, a person could run the risk of accumulating new debt and eventually having to seek protection from creditors anyway.
South Carolina residents who are dealing with large amounts of debt may consider bankruptcy as an option to bring relief to their situation. Chapter 13 bankruptcy is sometimes referred to as Wage Earners' bankruptcy. It could be an ideal solution for an individual who has a good income but is struggling to pay creditors.
South Carolina residents who are struggling to cope with an unmanageable financial situation can seek relief from overwhelming debt by filing a Chapter 7 or Chapter 13 bankruptcy petition. Those who wish to file for Chapter 7 must pass a means test, which can be difficult if they earn more than the state median income. Chapter 13 petitioners make payments to pay down their debt over a period of three to five years.
Debt is a much-debated topic in South Carolina and across the country. While it's generally acknowledged that some types of debt are more acceptable than others, such as mortgage and student loan debt, most financial planners agree that major credit card debt is a negative. However, there are certain life circumstances that leave cardholders no alternative but to run up credit card debt. And if the situation does not improve, even paying the minimum monthly payment may become too much.
Credit card debt can hang around for a long time. Now, just how long it takes a person to pay off a credit card balance depends on the situation. This includes how big the debt is and how much money a person puts each month towards paying it off. A recent analysis though paints a picture of the average amount of time it takes to pay off credit card debt in different parts of the county.
Once you decide to file for bankruptcy, your attorney will help you determine whether Chapter 7 or Chapter 13 is the best solution for your circumstances. In either case, you will have to attend the 341 meeting, where you might meet with some of your creditors.