With certain student loan payment requirements set to resume after a nearly four-year pause, the Federal Reserve Bank of New York found this may not result in a significant impact on the economy. However, borrowers have taken on more debt burdens since the COVID-19 pandemic. Despite the relief the government provided during Covid, all this debt combined results in challenges that there may now be additional payments unaccounted for within an individual’s current budget. While most student loan debt is not dischargeable, bankruptcy may provide relief for other debts and eliminate the need to take on more credit card debt or personal loans. This is especially true for those facing any of the circumstances outlined in this recent Yahoo! article that detailed the Fed’s study and other reports related to the economic impact when payments resume for thousands of individuals. The Fed’s study found borrowers would reduce their spending by…
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Small business bankruptcy filings are increasing, likely a result of the Federal Reserve’s increased interest rates as well as higher operating costs and stricter lending standards. Small-business owners received a decent amount of help during the pandemic through various government programs. However, as many of these programs come to an end, small businesses are feeling the impact in a big way. In a more challenging time to navigate these circumstances, small businesses, by their general nature, operate on thinner profit margins and smaller cash reserves than do larger corporations. According to a report from the Wall Street Journal, this has led many small businesses to file for bankruptcy under Subchapter V, a newer provision in federal bankruptcy code that makes it easier for financially struggling businesses to restructure. Put into effect in February 2020, Congress created Subchapter V, as standard Chapter 11 bankruptcy filings were far more expensive and restrictive…
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As the Federal Reserve continues to raise interest rates and with no reprieve in sight, Americans are beginning to feel the pressure. Consumers looking for home and auto loans are finding that their money gets them a lot less now than it did a few years ago. Simultaneously, consumers with credit card and other debt are also experiencing the impact of these higher rates. A recent report from the Wall Street Journal showed the significant increase in mortgage rates, which have jumped from about 3% just two years ago to a current rate of around 7%. This increase means that homebuyers could potentially pay hundreds of thousands of dollars more over the life of their loan compared to loans obtained just two years ago. Because of these higher rates, the National Association of Realtors calculates that the typical American family can no longer afford to buy a median-priced home. Mark…
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*Credit card payments will not be accepted for bankruptcy cases, unless pre-approved by The Sader Law Firm. If you have a question about a credit card payment, please call our Office Manager at (816) 561 1818.
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