Sometimes, it is difficult to see it coming. It happens gradually, in small increments. By the time you realize that it is a problem, it has become more than you can handle and you do not know what to do. Debt. Especially credit card debt and especially if you have more than one credit card.
Financial documents can be confusing. Mortgage loan documents can be more confusing than most, because most people only purchase a home once or twice in their lifetimes, and have few chances to gain experience with the process. The mortgage crises of the last decade showed that many borrowers failed to understand the implication of the documents they were signing. And that failure had monumental consequences when those borrowers began to default on the loans they could not afford. For many, it led to foreclosure and bankruptcy.
In Louisville, and across Kentucky and neighboring states of Ohio and Indiana, we talk to many borrowers with student loans. Often they have found themselves having trouble with repayment, given the difficulty in finding jobs and, as important, finding jobs that pay enough so they can afford to live and repay the loans.
Many Louisville residents who like the show "Gossip Girl" will know the actress Kelly Rutherford, who played a wealthy socialite on the show. However, Rutherford's life on TV does not mirror her actual life, as she has been engaged in a long custody battle for her kids after she and her husband were divorced. Her husband now lives in France with her kids.
During a bankruptcy, retirement accounts are typically exempt property. This means a trustee cannot take them to pay debts owed to creditors. This because they are for use when the debtor retires, Congress decided to exempt those assets from creditors. A recent Chapter 7 case from the Court of Appeals for the Seventh Circuit, however, decided that when an IRA retirement account is inherited, it is no longer a retirement account, and is no longer exempt property under the Bankruptcy Code.