Debt may not simply be a lack of money

Many New Jersey residents who struggle with meeting their financial obligations on a regular basis can't help but imagine how less complicated life would be if their net worth were somehow miraculously increased. People with money, as the theory goes, don't worry about every penny, don't lose sleep over what unexpected setback is lurking around the corner and can actually look forward to the future. The truth, however, isn't that black and white. Many individuals who earn a solid living, have a nice home and outwardly appear affluent also struggle with credit card debt.

Once people acquire enough money, credit card debt and almost all debt entirely is eliminated, but this doesn't become a reality for most Americans until they approach millionaire status. Many in the $100,000 income range regularly carry credit card balances each month, and these averages can be several thousand dollars. For those living paycheck-to-paycheck, this can be difficult to fathom, but there are common reasons for this.

One reason often plaguing households is a lack of liquidity. Significant resources can be tied up in the family home or company stock, and while they look good on paper, there is limited disposable cash. Other times, there is a disconnect between what is in fact earned and a perceived, deserved lifestyle. Like anyone from almost any income level, an unexpected economic catastrophe can devastate the financial picture for years to come.

For those facing such a circumstance, there may be a way out and a path to a fresh financial start. Chapter 13 bankruptcy, also called a wage earner's plan, may provide the opportunity to restructure debt in such a manner as to stop creditor harassment while establishing manageable payments. An experienced bankruptcy lawyer may explain whether Chapter 13 is the right option under the specific situation.

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