Atlanta Bankruptcy Attorney Blog

New data suggests that as many as one in every 10 children in the U.S. has been or will be affected by the current foreclosure crisis. In hard-hit housing regions like Atlanta, the effects could be even more far-reaching.

According to USA Today, an estimated 2.3 million kids were residents in homes lost to foreclosure - and another 3 million are on the path to foreclosure because their parents are delinquent on payments.

The data was taken from home loans made between 2004 and 2008. Because it doesn't take into account mortgages made outside that time frame, actual numbers are likely to be even higher.

While the media tends to focus on struggling homeowners, the children of homeowners often have it even harder. Stability and security are important factors in a child's emotional well-being, and foreclosure disrupts that, according to the article.

Kids who move as a result of foreclosure suffer a drop in reading and math scores equivalent to declines seen by children who miss a month of classes. Students who move frequently are twice as likely to drop out before graduation.

Back in 2008, USA Today took a look at the toll losing a home can take on kids and teens.

Children of distressed homeowners may be more likely to exhibit behavioral problems, experience feelings of anxiety and shame, and suffer from health problems due to a lack of health insurance.

In addition, many children are also affected by their parents' emotional struggles. Foreclosure is a leading contributor to depression and divorce.

Often times, financial struggles are out of our control. Unfortunately, they can have a lasting effect on the livelihoods of our children. Many families are managing to maintain a stable home for their kids by filing for Atlanta bankruptcy.

Chapter 13 has the ability to legally stop foreclosure proceedings and other collection activities, providing families with much-needed time to reorganize debt. After a successful repayment period, remaining debts can often be eliminated.

In March, our Atlanta Bankruptcy Attorney Blog reported that more residents in Georgia are living close to the financial edge than those in any other U.S. state. If financial troubles and potential foreclosure are threatening the well-being of your family, an Atlanta bankruptcy lawyer can help determine if bankruptcy protection is an option.

Continue reading "Families with Children May Be Biggest Victims of Foreclosure in Atlanta" »

Our debt problems are beginning earlier and earlier.

As recent news stories have illustrated, American students collectively hold one trillion dollars in student loan debt. In addition to school loans, most recent graduates leave school with the burden of credit card debt and car loans.

While this is bad news for young adults, it's also bad news for parents and grandparents.

Because few lenders are willing to take a risk on teens and 20-somethings with little credit history, adult relatives frequently co-sign credit cards and loans for young adults.

While co-signing is one way to help your child establish credit, it can backfire if your son or daughter can't make payments. In fact, co-signed loans are one reason that more Georgia residents are seeking protection through Atlanta bankruptcy.

A recent Business Insider articles estimates that three out of four borrowers defaults on loans, leaving the co-signers liable.

It's not that today's youth are especially irresponsible; it's just that, in today's economic climate, it's impossible to guarantee a young adult will have the income to make pricey payments. Tuition and the cost-of-living are skyrocketing, while jobs for students and new grads remain scarce.

If circumstances prevent the primary borrower from paying back the loan, the co-signer becomes responsible. As a result, lenders can go after your house, car, and life's savings. Meanwhile, the good credit you worked your entire life to build can quickly disappear. Your child will also suffer from a lowered credit score, but you'll be the one pursued by bill collectors.

Bailing out our children does nothing to teach them about managing money. In many cases, a more realistic solution is to lend a loved one money directly (if you can afford it, of course), reducing the need for an outside lender - and reducing the risk of credit damage and liability in the instance of a default.

For young adults over their head in credit card debt, filing for bankruptcy in Atlanta can offer a chance to start over on the right foot. Chapter 13 bankruptcy protection can reorganize debt with a payment plan, preventing default and protecting the co-signer.

Student debt poses a challenge because it is not eligible for release with bankruptcy. However, because bankruptcy can reduce other forms of debt, it may be able to free up funds for making school loan payments.

Young adults must often make financial mistakes to learn how credit really works. However, as adults, we shouldn't be paying for our kids' mistakes. If you're burdened by debt, whether it's someone else's or your own, Atlanta bankruptcy may provide relief.

Continue reading "Co-Signing Parents Left with Credit Damage and Debt Turn to Atlanta Bankruptcy" »

A marriage-wrecking infidelity doesn't always involve another person. For many couples, it involves a credit card.

More than half of people who share finances with a partner admit to lying about a purchase, according to a survey by the National Endowment for Financial Education. And 31 percent surveyed cop to being downright deceptive about money.

Debt has a habit of spiraling out of control when untended. Living with too much debt is difficult enough when you're the only one affected - but when you share financial responsibilities with someone else, things really get complicated.

For many Georgia couples, filing for a bankruptcy in Atlanta is the best way to eliminate debt - and save their marriage.

Many times, Atlanta bankruptcy lawyers have watched marriages fall apart because one spouse or partner was keeping financial secrets for years.

The longer one person hides a purchase or debt, the more likely it is that the problem will become unmanageable. Often times, the spouse hiding financial troubles feels anxious, helpless, and depressed. And of course, when the cat is let out of the bag, the partner kept in the dark is likely to feel resentful and angry.

When people have different money priorities, it can be difficult to repair a relationship damaged by financial infidelity. But if you have the same money goals, it's possible to work together to overcome debt and get back on track. Bankruptcy can help.

This Valentine's Day, perhaps it's time to have a heart-to-heart with your husband/wife or boyfriend/girlfriend about the state of your finances. It might not sound romantic, but it may be the best thing you can do for your relationship.

Couples who work together are more likely to succeed financially - even if it takes hard work to get there. After all, two heads are better than one.

Even better, consider seeking advice from a financial expert such as an Atlanta bankruptcy attorney. Many couples are able to eliminate most or all of their unsecured debts with a Chapter 7 or Chapter 13 bankruptcy.

Meanwhile, here are some relationship tips from CNN Money.

Discuss Money Before Marriage

Once you're married, what's yours becomes ours. It's important that couples are honest with each other about their financial situations and priorities. A problem like student loans or credit card debt doesn't have to be a deal breaker - and it can be overcome if you work together. But if you're hoping to save up for a house while your significant other is a chronic over-spender with no plans to change, you may never be on the same page financially.

Know the Warning Signs of Debt Denial

People hiding their financial behaviors often exhibit red flags. For instance, they may hide credit card bills so that you can't see the balance. You may find shopping bags with recent purchases stashed in the closet. You might see more bills arriving more frequently. And often times, you'll notice that your partner becomes irritated when you bring up finances. All of these signs indicate it's time to talk about money. No matter how large the debt troubles, bankruptcy may provide a solution.

Go Over Your Finances Together

One of the best ways to prevent debt from spiraling out of control is to manage your money together. Sure, it's fine if one spouse handles the bill paying, but you should both have an idea of how much money is being spent and saved. Make a point to go over your bills, bank account, and credit report periodically so you're both on the same page. You can access one free annual credit report from each of the three credit bureaus from AnnualCreditReport.com.

Continue reading "Credit Card Debt Takes a Toll on Marriage for Many Atlanta Couples" »