Sader Law Firm Blog - Kansas City Bankruptcy Attorney Blog

Americans’ Credit Scores Are Falling for the First Time in a Decade

Posted on April 5, 2024 by Sader Law Firm

For the first time in nearly a decade, the national average FICO score has decreased, signaling that many Americans are experiencing some level of financial stress during a time of inflation and high interest rates. This drop has occurred despite historically low unemployment rates and as fears of recession fade. In October 2023, FICO released data showing the national average FICO score came in at 717, down from 718 in July. FICO shared that this recent one-point drop was a result of an increase in missed payments and rising debt levels for borrowers. While this average score remains near record high, and is above pre-pandemic levels, this marks the first decrease since October 2013, when scores fell by two points from April. “The effects of high interest rates and persistent inflation may be starting to weigh on consumers, especially those already struggling to manage their finances,” said Can Arkali, FICO’s…
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Bankruptcies Increasing Among Gen X and Millennials Potential Signal of Debt Crisis

Posted on March 1, 2024 by Sader Law Firm

Despite recent positive data regarding consumer confidence, LegalShield saw a concerning rise in financial constraints in the December Consumer Stress Legal Index (CSLI). The result was a peak in consumers seeking out bankruptcy help and other legal assistance. The data for the index draws from more than 35 million legal service requests and is forecasting a dip in the previously optimistic consumer confidence. This trend of consumers seeking help filing for bankruptcy showed a disproportionate impact on younger generations and reflects a potential credit crisis. A report from Newsweek stated that this is reflected in the broader U.S. economy, as household debt rose 1.3% in the third quarter of 2023. The Federal Reserve Bank of New York attributes this to increases in mortgages, auto loans, credit cards and student loan balances. As consumers take on more debt, they are beginning to look into options to relieve this financial burden. LegalShield…
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Navient Announces Plan to Exit Student Loan Servicing Market

Posted on February 26, 2024 by Sader Law Firm

Navient Corporation recently announced to shareholders plans to end its current student loan servicing business following a number of scandals and government lawsuits. The one-time leader in the market plans to transfer millions of student loan borrower accounts to the Missouri Higher Education Loan Authority (MOHELA). In 2014, Navient was the largest student loan company in the world, managing more than 12 million accounts of student loan borrowers. The organization has since faced numerous consumer protection lawsuits from state and federal regulators and continues to defend itself against allegations of cheating millions of customers out of their rights to affordable loan payments. Despite exiting the market, the company still collects on roughly $40 billion in government-regulated loans, which originated under a federal student loan program and $17 billion in private education loans. The organization has a track record of scandal and alleged abuse, including attorneys general of six states suing…
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