Right now, there are record numbers of U.S. men and women out of a job, working jobs under markedly different circumstances, failing to pay their rent, and/or struggling to make ends meet. COVID-19 leaves us in unprecedented financial crises. However, the financial climate before the global pandemic was similarly fraught with uncertainty and difficulties. Here is a breakdown of the facts then and now.
First, according to Debt.org, there are 300 million Americans in debt. Secondly, the average American under age 25 has a debt totaling $67,400. Americans 45 to 54 average $134,600 in debt. Finally, what about now? “Household debt rose to $14.3 trillion through the first three months of 2020. That’s $1.6 trillion higher than the record set in the middle of the financial crisis,” CNBC reveals.
These statistics leave many with feelings of hopelessness or unease. The good news is that your personal financial troubles are not immutable. There are steps individuals and families can take to mitigate their debts and get their finances in order. More encouragingly, there are experienced professionals poised to help. Find the right professional to help with your personal financial troubles.
Situation #1: You’ve Been In A Car Accident
According to Insurance.com, car repairs following a crash or accident can range from $50 to $1,500 and much more. That is unwelcome news, given that only 41% of Americans report that they have enough savings for a $1,000 emergency and another 14% (46 million) say they have spent all their emergency savings during the pandemic.
In the event of a crash, having adequate car insurance can make a tremendous difference. There are several different types of car insurance, the Insurance Information Institute (III) reveals. “Most states require drivers to have auto liability insurance before they can legally drive a car. Liability insurance pays the other driver’s medical, car repair, and other costs when the policyholder is at fault in an auto accident,” the III writes. This requirement usually covers two types of insurance, bodily injury liability and property damage liability.
As previously stated, states mandate at least some bodily injury liability coverage. Because injuries from car crashes can lead to sizeable lawsuits, drivers have the option of purchasing additional insurance. Property damage liability covers damages to vehicles, fences, lamp posts, telephone poles, guard rails, and buildings.
You may not get the full amount you are due if the other driver is underinsured. If the at-fault driver is underinsured or does not have insurance at all, you may be out of luck in most circumstances. That is where uninsured and underinsured motorist coverage can be a tremendous help. This type of insurance will cover all costs, even if the at-fault driver does not have enough insurance to pay them. Further, underinsured insurance will protect you if you are hit by a driver while walking, jogging, or cycling along the side of the road.
If you want to be covered should the unexpected happen, purchase comprehensive coverage. Comprehensive coverage “reimburses for loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, missiles, explosions, earthquakes, windstorms, hail, flood, vandalism and riots, or contact with animals such as birds or deer,” the III writes. In other words, it covers what other types of car insurance do not.
Do you have enough car insurance to cover your expenses in the event of an emergency? Do not inadvertently set yourself up for more personal financial troubles. Make sure you are appropriately insured before driving your vehicle.
Situation #2: Someone in Your Family Recently Passed Away
When you are speaking with the staff at your local funeral home, one of the last things you want to think about is your personal financial troubles. Unfortunately, that is the reality for many Americans. Funeral and inheritance disputes can be prohibitively expensive. That is why it is important for you to make plans before you pass, and you should, gently, encourage family members to make appropriate plans before they pass, too.
Securing life insurance and working with an estate planning lawyer before you retire or fall ill is a necessary and responsible financial move. Learn more below.
Unfortunately, many Americans have serious misconceptions about life insurance. For one thing, the optimal time to purchase life insurance is not when you need it most. In many cases, if you are 65 and up or suffering from a terminal illness and choose that time to buy life insurance, chances are your rate will be excessively high or even impractical.
Instead, purchase life insurance when you are relatively young and well. The term “insurance” is especially pertinent here. Purchasing life insurance should be a precautionary — not a reactionary — measure. For example, good times to purchase life insurance are when you are having a baby, after reviewing your personal financial troubles and realizing that you have amassed considerable debts, when and if you begin financially supporting your parents, if you are self-employed, or if you take on any high-risk job.
Estate planning is another smart financial move. Unfortunately, some of our debts may continue to haunt us from beyond the grave. After you die, if you have a will and carefully appoint an executor of that will, he or she will use any assets you have (land, valuables, and savings) to square away your debts.
Don’t make your personal financial troubles your children’s or grandchildren’s financial troubles. While it can be slightly uncomfortable to do so, securing life insurance and creating a will are conscientious and caring financial steps to take.
Situation #3: You Got Injured At Work
Most of us depend on work to make a livelihood. When you are injured on the job, that injury may render you unable to do your job for weeks or even months at a time. In worst-case scenarios, it may threaten your future and call your employment into question. For these reasons, you need to work with a workers compensation lawyer. A workers compensation lawyer can help you through the worst of your personal financial troubles — when you may owe exorbitant medical bills and may be temporarily or permanently out of a job.
It is especially wise to work with an attorney when you have a preexisting condition that may cause the courts to question the veracity of your claim, an insurance company denies your claim, or you are waiting undue amounts of time for compensation from insurance companies — and particularly if that wait time is affecting your ability to get necessary medical treatments, like physical therapy or surgery.
Situation #4: Your Surgery Did Not Go Well
Other people should not be responsible for your personal financial troubles. If you need surgery, there is a good chance that you already have considerable expenses. If your surgeon botches that surgery, you may have medical bills that keep piling up and you may be out of work that much longer to recover. Do not take on these added expenses without a fight. A medical malpractice lawyer can help you get the compensation you deserve.
Medical malpractice is a serious problem. “According to the Journal of the American Medical Association (JAMA), medical negligence is the third leading cause of death in the U.S. — right behind heart disease and cancer,” Forbes writes. Work with an attorney if you believe that a doctor’s actions led to injury, mental anguish, additional medical procedures and expenses, and/or lost wages.
To make a claim, you will need your medical records, bills, photographic or written proof of your injuries, and documentation to substantiate lost wages, like paychecks or old tax returns.
Don’t let someone else’s negligence add to your financial troubles. Consult with a lawyer to see if you have a case worth pursuing.
Situation #5: You Are Arrested
It is a situation that we do not foresee or plan ahead for. Being arrested can be an embarrassing and financially troubling time. Remember many Americans cannot afford a $1,000 emergency. Most bail is considerably higher.
Bail bond services can help you come up with the funds you need in a pinch. Bail bondsmen regularly work with local jailers and courts, making it possible for them to expedite your release and make it as seamless as possible. In exchange for bail bond agents providing bail upfront, you will pay them a fee (typically about 10%) and enter a written agreement that you will appear in court.
Without bail bond services, many do not have the funds necessary to get out of jail. Personal financial troubles can be life-changing if they leave you with no choice but to remain in jail. Know that you have alternatives, thanks to professional bail bondsmen.
Situation #6: You’re Getting Divorced
To put it lightly, divorce takes quite an emotional toll. Do not let it add to your personal financial troubles as well. Schedule a free consultation with a divorce attorney to learn how to make the process as painless and inexpensive as possible.
Do not be shy about working with a law firm. According to the American Psychological Association, “Marriage and divorce are both common experiences. In Western cultures, more than 90% of people marry by age 50… [and] about 40 to 50% of married couples in the United States divorce.”
A divorce attorney will provide invaluable objective advice. They will advise you on your personal circumstances and fill you in on relevant marriage and divorce laws as well. They will help you divide debts and property, draft child custody arrangements (if applicable), and prepare the necessary paperwork.
Most importantly in terms of your personal financial troubles, they will make certain that negotiations are fair and you have adequate funds to live comfortably after your divorce.
Situation #7: You’re Injured And A Product Is To Blame
Personal financial troubles can arise for a number of different reasons. One of the reasons that are often overlooked is an injury at the hand of or resulting from a defective product. Don’t sink under debilitating medical costs through no fault of your own. Work with a defective product attorney to get the money you are due.
You may be eligible for compensation if you used the product as intended and doing that caused you undue harm. In some circumstances, a lack of warning about potential hazards may also warrant a defective product or product liability claim. Famously, this exact scenario plays out in Liebeck v. McDonald’s Restaurants, when an elderly woman sued McDonald’s after spilling hot coffee on her lap.
Situation #8: Your Debts Are Insurmountable
Over 1.4 million individuals filed for bankruptcy in 2011, and the number of filers continues to grow every year. Notably, the personal financial troubles that drive Americans to file bankruptcy are often unavoidable ones, like skyrocketing medical bills (accounting for 46% of bankruptcies), according to Debt.org.
Talk to a bankruptcy attorney about your options. Filing for bankruptcy can accomplish several things. It can wipe away debts, drive away creditors, stop your debts from going to collections, and even put an end to eviction, repossession, or foreclosure. Chapter 7 will enable you to start over and wipe your slate clean. Chapter 13 may be a more appropriate option if you have the means to pay some, but not all of, your debts.
Know that some debts will stick no matter what. “Some debts typically can’t be erased in bankruptcy, including recent taxes, child support, and student loans,” NerdWallet writes. Ask an attorney if you have any questions about filing for bankruptcy.
COVID-19 is having unprecedented effects on us all. Do not go it alone, especially financially. Start by doing what you can on your own. The Consumer Financial Protection Bureau (CFPB) recommends calling debtors if you cannot pay or if your payments will be uncharacteristically late. You may be able to delay or defer some payments, make a partial payment, or learn more about resources for financial hardships in the wake of COVID-19.
Once you have exhausted your personal resources, it is time to seek help. Use the list above to find the professional that is most appropriate for your particular situation.