From 2013 to 2016, the number of people declaring bankruptcy in the state of California reduced by almost half. That said, thousands of people still file bankruptcy every year. Do you know the most common situations that lead to bankruptcy filings? Read on to learn about the top five reasons debtors give and then reach out to The Law Offices of Paul Y. Lee at 951-755-1000 for a free bankruptcy consultation.
- Credit card debt
- Medical debt
- Home Equity Line of Credit Debt
- Mortgage debt
- Student loan debt
The latest data shows that about 70% of adults in America have one or more credit cards. Millions of Americans are in debt because of their credit cards. In 2009, the total credit card debt for the country was over $950 billion. In 2016, studies showed that the average amount of credit card debt for each family in California was about $5,700. The people with the most credit card debt tend to be people who have higher incomes and are between the ages of 35 and 64.
According to a 2013 study that looked at data points from top sources like the U.S. Census and the Centers for Disease Control, medical bills are actually the top reason that people file bankruptcy in the United States.
Also known as HELOC, Home Equity Line of Credit is a type of loan that offers borrowers not just a single lump sum, as most loans do, but allows the borrower a credit limit up to a specified amount during a specific time frame. The typical draw period is ten years. When that period ends, then loan payments start. According to government reports, in 2009 there was more than $577 billion of HELOC debt in the United States.
We’re glad to say that the country – and California – has come a long way since the financial crisis of 2008. That said, there are still millions of home within the country at are at danger of being foreclosed on. A Chapter 13 filing can prevent a home from being taken in a foreclosure. This is important for many Americans, considering that in California the average mortgage debt is $55,000 – that’s about $17,000 above what the average American owes.
California is in the top twenty for states with high student loan debt. For Californians, the average student loan debt for someone who graduated in 2015 is $22,191. This is not as high as some states (for example, in New Hampshire it’s about $40,000) but it’s enough to make it hard for many students to get off the ground after they graduate.
Are you considering filing bankruptcy for these or other reasons?
If you’re thinking about filing bankruptcy then you likely have questions. The good news is that The Law Offices of Paul Y. Lee has the answers you need. Reach out to us today at 951-755-1000 for your free bankruptcy evaluation. We can help you through the process to give you the clean start you need.
