Why Are Mesa Residents Still Filing for Bankruptcy if the Economy Is Said to Be so Much Better?
For the last few years, we have been told just how much better the Arizona economy has gotten and that the hard times we faced in the early 2000s are over. However, if you look around, there is still plenty of hardship to be seen and many of our fellow Mesans are still filing for bankruptcy. So the questions remains: why, when are are supposedly doing so much better than before, do so many of us still need to file for bankruptcy to get ahead financially?
Here are some important reasons why so many Mesa residents are still filing for bankruptcy despite a significant economical upswing:
While it is undoubtedly true that the jobless rate has dropped significantly- in fact it is half of what it used to be- the pay rate in Arizona is still disturbingly low. And while many who used to be unemployed may have been able to finally find work, the odds are that the pay they receive is not able to move them out of debt and pay up what they owe.
While the economy is doing better, employees are not paid more. In fact, many make less than they used to before they lost their job due to the disastrous economy. The only way to get ahead of the game or even just to even the playing fields is by filing for Chapter 7 and have your debt erased and start over. While bankruptcy can be a great way to jumpstart your financial future, it shouldn’t have to be that way.
In 2016, minimum wage is still $8.05 which is hardly enough to pay all the bills that are coming in on a monthly basis. If you add to that the odds that employees have preexisting debt, the odds of catching up on your bills and paying off debts is almost impossible.
Just what type of debt does the typical Arizonan have to deal with?
For one, many young adults carry their tremendous student loans with them. The numbers relating to student debt are staggering. While in the 1990s about 50% left college with student loan debt, today it is over 70%. This means that currently more than 40 million Americans are paying off student loan debt. In fact, Arizona residents owe more in student loans that in credit card debt
Student loans are the most common form of debt for those 24 years old and younger and account for over $8 billion of defaulted private loans.
If you connect the dots between student loan debt and the low wages paid, you will understand why people are still not getting ahead. According to CNN, 260,000 Americans with a college or professional degree make at or below the federal minimum wage.
Many bankruptcy attorneys may tell you that student loans cannot be discharged in a Chapter 7 bankruptcy proceeding in Mesa, but under certain limited circumstances you can file for bankruptcy because of your student loans and get them discharged. It is essential that you are working with an experienced and knowledgeable Mesa bankruptcy attorney who can clue you in as to which conditions you need to fulfil in order to qualify.
Credit Card Debt
Credit Card debt is another significant contributor to being indebted and which is driving many to file for bankruptcy. Credit card debt can be exceedingly difficult to pay off, especially in an economy that is on the rebound. While the going was rough, many Mesa residents have resorted to using their credit cards to buy necessary items in the hope they would be able to keep the boat afloat until the tide was coming in and things would get better. However, credit card interest rates are rarely known to be favorable (at least not once you have exceeded the introductory rate period), and if you are only able to make minimum payments, you will never be able to pay off your credit card (s).
It is easy to be seduced in better times to purchase something on credit with the intention of paying it off. What consumers end up with are payments they cannot keep up with or only making minimum payments on their credit cards which doesn’t even make a dent in the mountain they owe. Why is that?
Rates are on the Rise
Interest rates have been on the rise and are predicted to continue to rise in 2016. While the pace of the increase is fairly moderate, an increase no matter how small, in interest rates is detrimental to many credit card holders. What exactly does that mean? The continued interest rate increase is going to cause consumers having to pay an additional $1.3 billion in credit card payments. Many will only be able to afford minimum or slightly above minimum payments, which won’t help to pay credit card balances down. This in conjunction with gas prices that are predicted to increase again, leaves less money in taxpayers pockets for other necessary living expenses.
While increased employment opportunities and better economic times have led to a decrease in bankruptcy filings in Mesa and elsewhere, the trends is not significant enough to say that things have improved tremendously.
There are other factors involved as well. But fact remains that many employees and workers are off worse than they should be and that the quest for debt relief is still strong.
There is no shame in having to file for bankruptcy and getting the fresh financial start you deserve, but it also should not be necessary as often as it is. Just make sure you consult with a qualified Mesa bankruptcy law firm before you do.
If you are trying to find out if filing for bankruptcy in Arizona could be the right choice for you, contact the experienced Mesa bankruptcy attorneys with My AZ Lawyers today. We can help you to assess your personal financial situation and we also offer free initial bankruptcy consultations.
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