Blogs

Most of us face financial crunches from time, and 2020 has been one long crunch for many people. Being short of money and having to pick and choose which bills to pay is always tough. Unfortunately, creditors and debt collectors make it much harder when they pour on the pressure. Your best defense against being bullied or manipulated into routing your money in the wrong direction is preparation. 

Back in January and early February, some financial experts were predicting that subprime auto loans--vehicle loans to people with lower credit scores who were considered higher risk--might be the next housing bubble. Between 2009 and 2019, U.S. automobile loan debt increased by 75%, to more than $1.25 trillion. In early 2020, about seven million auto loans were 90 days past due. 

Everyone knows that seniors are being hit hard by the pandemic. The risks of serious illness and death are more significant for those over 65, and isolation can be especially hard on the elderly. That element is compounded by strict safety precautions in nursing homes and other residential facilities populated by older Americans. In addition, there’s an obvious tendency for older populations to be less connected through technology.

If your retirement savings aren’t what you’d hoped--or you don’t have any at all--you’re not alone. By many different measures, Americans are lacking when it comes to retirement planning. 

Financial Struggles are a serious issue in Alabama.  In 2019, Alabama had the highest per capita bankruptcy filing rate in the country. At 5.62 filings per 1,000 people, Alabama more than doubled the national average. Neighboring Tennessee and Mississippi were also among the top five states. 2019 was no exception--Alabama has held the top slot for per capita filings for several years. And, the state has so far continued to hold the lead in 2020. 2020 rates have dropped across the country due to the disruption of the pandemic, but Alabama remains far above the national average. 

If you’ve recently received a notice that one of your credit card accounts has been closed by the issuer, or that your credit limit has been cut, your first instinct may be to wonder what you did wrong. Usually, accounts are limited or closed when the credit accounts are significantly past due, or when the cardholder’s credit history has taken a negative turn. 

Currently, we are not living in usual times. 

Early in the pandemic, two safety nets emerged to protect Alabama renters. First, Governor Kay Ivey’s March executive order put a moratorium on most residential evictions until June 1. At the same time, federal law called a halt to residential evictions from properties that were federally subsidized or financed with federally-backed mortgages.

In most areas of life, problems have a straightforward solution. For example, if you want to lose weight, you undoubtedly know that you should get more exercise and eat healthier. But that doesn’t always translate into action - we’ll start tomorrow; we need to find “the right gym”; it would be a real shame to let those pudding cups in the fridge go to waste. Even then, on any given day, you can wake up in the morning and decide to take a long walk or have a grapefruit for breakfast instead of a donut, and you’ve taken a step in the right direction.

Imagine that you’ve been wrestling with debt for a couple of years, and finally decided to take charge and reclaim control of your finances. You hire an attorney and file Chapter 7 bankruptcy. A few weeks after you file, you buy a Tennessee lottery ticket while you’re paying for gas and you win. 

Now what? 

Financial stress and pressure from debt collectors can create a sense of urgency that isn’t always productive. The urge to get a creditor off the phone, stop the threatening phone calls, eliminate the possibility of a lawsuit and otherwise dial down the pressure makes many people reach for the first available release valve. Too often, that means a dangerous financial decision that will ultimately do more harm than good.