We all need a break: a break from the pandemic and a break from the inflation-led financial crisis, both of which pushed people to take extreme measures to survive, such as amassing huge loans and debts. There is a way out of this financial crisis – Chapter 7 bankruptcy.
Inflation isn’t going anywhere anytime soon. As of last year, the United States has noted a significant increase in the Consumer Price Index (CPI) of an 8.5%, above the Dow Jones estimate of 8.4%. Consumers are struck where it hurts the most: the increase in prices for essential commodities such as food, gas, and other necessities such as clothing and shelter.
It’s not just the prices of consumer goods that are skyrocketing. Interest rates and annual fees are also on the rise, seemingly the last straw for individuals already having difficulty making ends meet. And taking on debt during these challenging, cash-strapped times seemed to be the only possible solution to stay afloat.
Acquiring loans to meet the demands for daily living costs might be a temporary solution but certainly not a permanent fix. Seeing no end in sight for both the pandemic and inflation, people might accumulate more debts than necessary.
The Law Offices of Ronald E. Stadtmueller is a certified bankruptcy law firm that provides debt relief for businesses and consumers. Get out of debt in San Diego, California, and avail the expertise of Ron Stadtmueller and his team of bankruptcy lawyers. With offices in Mission Valley, Rancho Bernardo, San Marcos, and La Jolla, the Law Offices of Ronald E. Stadtmueller specialize in Chapter 7 and Chapter 13 bankruptcy, debt reorganization, debt discharge, and other general bankruptcy services.
Acquiring debts or loans is already a drastic measure to counter the impact of inflation. But if you can no longer keep up with the payments and rising costs and have already exhausted all of your resources, filing for a Chapter 7 bankruptcy is the best course of action to get out of debt.
Types of Debts
Credit card debts surge as more and more Americans turn to borrowing to keep up with the unceasing increase in prices of gasoline, groceries, and basic needs. Understanding each type of debt can help your debt management strategy in dealing with inflation.
Secured debt
Secured debt is a debt that requires the borrower to put up an asset as a form of collateral in case of default of payment. Hence the term secured debt because the collateral “secures” the loan. The most common types of secured loans are auto loans, home loans, mortgages, life insurance policy loans, and secured-type credit cards.
Unsecured debt
Unsecured debts do not require any form of collateral. For payment default in unsecured debts, the lender can go to court to file a claim for any money owed. Common examples of unsecured debt include student loans, medical bills, utility loans, unsecured-type credit cards (no cash deposit required), and personal loans that are not backed by collateral.
Revolving debt
Revolving debt, or revolving credit, is a type of credit arrangement that allows the borrower to repeatedly borrow money to a specific limit while consistently paying the balance, or a portion of it, in agreed scheduled payment terms. Credit cards, secured or unsecured, personal lines of credit, and home equity lines of credit (HELOC) are examples of revolving credit.
Where does Chapter 7 come in with inflation-related debts?
Most people don’t realize it, but Chapter 7 bankruptcy can give you a much-needed break and relief from debts. Although filing for Chapter 7 does not change the current economic situation and lowers the costs of essential goods and commodities, it certainly can help you weather the financial crisis brought by inflation.
Chapter 7 can put a halt to all collection efforts. Creditors are not allowed to collect payments, garnish your income, or evict, foreclose, or repossess any of your properties. A court-appointed bankruptcy trustee then liquidates certain assets the debtor owns as payment for debts.
In California, there are laws that put an exemption to liquidation on some assets necessary for individuals to continue with their life after bankruptcy.
So, for anyone caught in the grasp of the inflation financial crisis and overwhelmed by debt, there’s always a way out, always an opportunity to start all over again.
Chapter 7 Bankruptcy: A lifeline
If inflation has you submerged and drowning in debts because of soaring prices of goods, commodities, interest rates, and even annual fees, making you lose sleep over the fear of property foreclosure or repossession, and debt collectors are breathing down your neck with harassing calls and threats of lawsuits, then Chapter 7 is your lifeline.
Don’t let inflation and debts rob you of your peace of mind. Reach out to experienced bankruptcy specialist lawyers that have your best interest at heart. Start your journey towards financial freedom and contact the Law Offices of Ronald E. Stadtmueller at (858) 564-9310 and get a FREE consultation.
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