“STAY AWARE OF YOUR OPTIONS”
by Contributor
(Nov. 21, 2019) — As a by-product of policies enacted between 2008 and 2016, a huge proportion of American citizens have found themselves mired in bankruptcy. According to new figures analyzed by CNBC, bankruptcies related to medical issues rose by 2.5% to 67.5% of all bankruptcies after the ACA, outlining the burden placed on citizens by those policy changes. With bankruptcy creating waves in personal and family finances long after the process has been undertaken, it’s important that debt is managed properly so that those affected by the measure can get their lives back on track.
Correcting the record
Bankruptcy impacts your credit report first and foremost. However, many are under the impression that it stays around for longer than it should, and this is likely impacting their ability to secure new finances. According to market blog MarketWatch, the myth that bankruptcies linger on a credit report for 10 years after the event is widely held despite this being patently untrue. You are absolutely able to remove a bankruptcy from your credit report early through a variety of methods, all of which are legal and routinely employed by business. Most frequent is the use of credit repair agencies, most of which will charge a small fee to arrange for the relevant corrections to be made. This shows that bankruptcy should not be indicative of total financial ruin.
Managing your own house
Many Americans lost their health coverage unknowingly when companies went under following the 2008 crash. According to Investopedia, this is one of the key reasons why medical bankruptcies spiked, a fact exacerbated by measures such as the ASA. What this tells private citizens is that they should manage their own health insurance and use their company as leverage. Under the changes made by Trump’s APF Plan, citizens are encouraged to get their own health insurance that will cover long-term conditions and prioritize nipping new situations in the bud. You can also use your workplace policies to help negotiate better deals with private companies.
Divorce bankruptcy changes
Medical bankruptcy is not the only form of bankruptcy. CNBC statistics outlined foreclosure, student loans and divorce as some of the primary sources of bankruptcy. As with medical issues, now is a great time to evaluate your options in order to prevent financial harm in the future.
Chief among these considerations is related to divorce. Good Housekeeping estimate that divorce rates are going down, and new laws enacted by the Trump administration aim to improve equity for women. Currently, alimony payments are tax-deductible. In the future, this will be reversed, with the payment liable to be taxed to the relevant state degree. Clearly, this increases the risk to the beneficiary of the alimony payment.
Tackling the student crisis
Student debt is out of control as a result of liberal lending in the early-00’s, and 32% of students are now close to filing for bankruptcy, according to Business Insider. The burden forms 49% of the entire debt of those affected, which shows the extent of the issue. Tackling this are two measures being implemented by the current administration. Firstly, the income-driven scale will match similar systems in the UK and wider Europe; the more you earn, the greater percentage you pay, with no payments under a certain level. Secondly, bankruptcy is set to be opened up further with the ability to discharge student debt within it, providing a huge boost to those struggling.
Bankruptcy can feel emotionally damaging, but it doesn’t need to be that way. Many bankruptcies have been unduly influenced by poor policy-making, and new measures will help impacted people to get back on their feet. Stay aware of your options if you’ve found yourself in that situation.