When an individual finds himself facing financial challenges due to a struggling economy, medical expenses, credit card debt, or other unexpected life changes, he may be stressed about how he is going to get out of his financial dilemma. Many who are in these situations consider bankruptcy, but may feel scared about going through the process. Fortunately, the process does not have to be frightening and the results of filing for bankruptcy may be better than choosing to forego bankruptcy.
Many small businesses rely on credit cards to get by. But while the CARD Act of 2009 helped protect consumers from unfair lending practices, the Act does not cover business credit cards. This can spell trouble for small business owners who find themselves facing financial challenges and struggling to pay the minimum payments on card balances.
There is bad news for loan holders. According to the American Bankers Association, U.S. consumer delinquencies worsened in 2013's second quarter. The composite index used to determine delinquency rates looks at eight types of loans including auto loans and personal loans. While auto loan delinquencies dropped, those delinquencies tied to personal loans and home equity lines of credit rose. Experts claim the delinquencies were propelled by slow job creation and minimal wage gains.
While the economy continues its slow slog towards recovery, banks and consumers are struggling. As the auto lender market has thinned, banks have continued to lower credit requirements for borrowers. This has led to an increase in the subprime auto loan market, similar to the one that wrecked the housing market during the last recession. According to reports, 36 percent of auto loans issued in the second quarter were made to subprime borrowers. Consumers should be wary as these loans may carry higher interest rates that make repayment difficult.
Businesses face financial difficulties from time to time. But when financial challenges are systematic, whether due to a lack of demand or an overabundance of supply, it may become impossible for the business to remain current on its bills. When this happens, business owners can lose sleep due to overwhelming stress and fear. Yet, as a recent instance highlights, these business owners can seek legal protection and obtain debt relief.