Archive for June, 2013

With Student Loan Rates Set to Double, Many Students are Already Struggling

According to Forbes, the rate of interest on new Stafford student loans is set to double on July 1st unless Congress is able to act. Unfortunately, there is little agreement on the part of lawmakers on how to solve the problem of rising rates and efforts to thwart this massive increase in student loan costs have thus far been unsuccessful. 

If leaders are unable to come to an agreement, this increase in the cost of student borrowing is going to come at an inopportune time and is likely to cause serious hardship for the young. Our Columbia bankruptcy lawyers know that student debt is already crippling young people throughout the United States.  An increase in student loan costs is only likely to make this situation much, much worse.

Student Loan Debts are a Major Struggle

Student loan debts are a huge and growing problem in the United States. The cost of college has increased significantly in recent decades and the majority of students graduate thousands of dollars in debt. In fact, according to CNN Money, an estimated 16.2 percent of all Americans have student loans and the average balance on these loans is $24,810. This debt burden is causing those who are lucky enough to be able to pay their loans to delay buying a home, marrying or starting a family because they are so burdened with debt.

Unfortunately, the bad job market is also combining with high debt rates to leave many students unable to even begin tackling their debt burden. According to CNN Money, for example, almost 12 percent of student loans throughout the United States are at least 90 days delinquent.  In South Carolina, the number of delinquent borrowers is even higher than the national average as 13.5 percent of student borrowers are delinquent in the state.

Student debt is the only type of debt that has continued to increase during the Great Recession in the United States, as young people hope that going to college will provide them with a way to make it in a tough economy. Unfortunately, the actual outcome has proven very different as college grads are having a hard time finding jobs in their field and an even harder time finding jobs that will allow them to actually begin to aggressively pay down their debts.

Limited Help for Those Struggling with Student Loans

As if it is not bad enough that young people are trapped by student loan debt, things are even worse when you consider the special features of student loans. Perhaps the most problematic feature of all is that student loans are NOT forgivable in bankruptcy under almost any circumstances.

While you can get rid of most other types of debt including credit card debt and personal loan debt, you cannot eliminate student loan debt by filing for bankruptcy except in very limited circumstances. This means that even if you cannot find a job and cannot pay back your loans, there is no way to make the balance go away. The amount you owe can just keep on growing with interests and penalties and the situation can become even worse.

If you find yourself dealing with student loan issues, a bankruptcy lawyer may be able to assist you by helping to resolve other debts so your loan payments become more manageable. Until the law changes – and not in a way that doubles student loan interest rates – the problems with student debts will continue to cause huge ripples throughout the U.S. economy.

If you are considering bankruptcy, contact the Columbia, South Carolina attorneys at Matthews & Megna today at 877-253-7705.

Poverty is Rapidly Spreading to the Suburbs

Many people consider poverty to be a problem that is concentrated in inner cities. The suburbs, on the other hand, are typically viewed as places where families go to raise kids in relative comfort once they’ve gotten a good handle on their finances and saved to buy a house. 

Unfortunately, this is no longer a reality. Our Columbia, SC bankruptcy attorneys know that many suburban families are struggling to pay their bills or driven into foreclosure or bankruptcy. The problems of suburban poverty are not limited to a few people or to a few areas but have become a major issue throughout South Carolina and the United States.

Suburban Poverty Rising in South Carolina

According to a recent NBC News Article, suburban poverty has practically become an epidemic.  In fact, from the years 2000 to 2011, the number of suburban residents living in poverty rose almost 64 percent. Today, there are now an estimated 16.4 million people who are living in suburbs who are classified as living in poverty.

The increase in the number of poor families in suburbia was significantly higher than the rate of increase in cities. In fact, the rate of growth for suburban poverty was more than double the rate of growth for urban poverty in many major cities.  This has resulted in a situation where, for the first time, there are more poor and struggling people living in suburbs in many locations than are living in urban areas.

Poverty is a problem anywhere that it occurs, but those in suburban areas may unfortunately be worse off in some ways than poorer people living in urban areas. Because poverty is stereotypically viewed as an inner-city issue, most of the resources intended to help people in poverty are usually concentrated in metropolitan areas. This may mean that struggling people in suburbia have limited access to lifelines that could help them through such as food banks and public transportation.

Because poverty is not expected in the suburbs, the problem is also a hidden problem. People may be ashamed or afraid of admitting that they are having a hard time paying their bills. They may not have the support of neighbors, friends and family that is often available in traditionally-struggling communities where people may be able to count on each other for help or at least for understanding.

The reality, however, is that high rates of poverty in the suburbs are driven by many factors very few of which are the fault of those living in this bad situation.  Suburban poverty rates have largely increased due to high rates of unemployment, the collapse of the real estate bubble, a slow economic recovery, an increase in student loan debt, an increase in income inequality and the fact that many of the new jobs that are being created are low-wage with limited benefits.

This means that suburban homeowners and individuals who are coping with poverty should never be afraid to ask for help. Whether the solution is seeking government benefits or declaring bankruptcy, there are resources out there to assist those who are having a hard time financially.

If you are considering bankruptcy, contact the Columbia, South Carolina attorneys at Matthews & Megna today at 877-253-7705.

Many American Families Struggling to Get By

Despite a booming stock market and politicians claiming that we’re in the midst of an economic recovery, many Americans are still struggling through hard times. Our Columbia bankruptcy lawyers know that there are countless families out there living paycheck-to-paycheck or underwater and coping with debts they cannot erase.  Unfortunately, many of these families are considered to be well-above the poverty line and are ineligible for help that could give them some breathing room. 

While these economic problems are nothing new, a recent survey shows just how much more than poverty-level income most people think is required in order to survive in this country.   The survey also showed that a lot of families don’t think they have quite enough income to make ends meet.

How Much American Families Need to Get By

According to Today.com, Gallup recently surveyed more than 1,000 Americans and asked them to name the smallest amount of money that a family would require to get by in the community where they live.

Based on the responses, the poll found that Americans think a family of four people would need to make, on average, no less than $58,000 per year in order to be able to simply get by.  The results from the survey were very similar to the results of a prior survey in 2007 where the same question was asked.

The results also showed that most people estimated the necessary minimum income at a little bit more than they themselves made.  For example, according to Gallup, adults in households earning less than $30,000 think that it takes $43,600 on average in order to get by. In families earning $30,000 to $74,999, estimates of the minimum needed to get by rose to $55,100. Finally, in families earning $75,000 or more, the minimum needed to survive was estimated at $69,400.

These findings show a couple of important things. First, they show just how far the “minimum” estimates are from the poverty level. The Census Bureau estimates that the poverty level for a family of four is $24,000. With the “minimum” amount of money needed to get by estimated at more than double this amount, it is clear that there are probably a lot of struggling families out there that are not defined as living in poverty but who are not able to get their basic needs met.

The fact that most people estimated that they need more money than they have is also important. If families continually feel as if they do not have enough, they may find themselves turning to credit cards or other forms of debt in order to meet their bills and deal with unexpected expenses. This can quickly exacerbate their financial worries as they are then left to cope not just with their regular bills but also with interest and other costs of borrowing.

Unfortunately, when looking at the results of this study, it is easy to see why many families get into debt trouble and why many families end up in bankruptcy to try to get out of a financial mess they were pushed into by bad circumstances and tough economic times.

If you are considering bankruptcy, contact the Columbia, South Carolina attorneys at Matthews & Megna today at 877-253-7705.