Bankruptcy And Debts

Consolidation Debt Mortgage WASHINGTON -- The booming economy has done much to boost the fortunes of many long-disadvantaged Americans. But the gap in well-being between whites and nonwhites didn't budge over the 1990s and remains huge, especially when measured by wealth.

But you will literally wipe the slate clean, except for Student Loan debts which remain due after bankruptcy.

Consolidation Debt Help In 1998, the most recent year for which data are available, the median net worth for Hispanic, African-American, Asian and other minority families was $16,400. That was less than one-fifth -- 17.28% to be precise -- the $94,900 median net worth for non-Hispanic white families. The ratio was up only slightly from 17.23% in 1992, according to a recently released survey of 4,309 families conducted for the U.S. Federal Reserve.

Stockholdings Make Up Almost a Third of Americans' Total Household Wealth

Bankruptcy is a court process that allows an individual or business to get relief from their debts. The ultimate goal of bankruptcy is to give the individual or business a fresh financial start while being fair to creditors. How Can a Business File for Bankruptcy Chapter 7 and Chapter 11. Once bankruptcy proceedings are started (whether through Chapter 7 or Chapter 11), creditors cannot attempt to collect debt from the business until the bankruptcy process has ended.

Consolidation Credit Debt The racial divide in wealth -- the value of all assets, including homes, cars, stocks and savings accounts -- was much greater than that of income, the Fed data show. Median income for non-white and Hispanic families -- the household in the middle of the pack for those groups combined -- was $23,300 in 1998. That was 61.8% of the white non-Hispanic median income of $37,700 -- a slightly narrower gap compared with 1992, when those minorities earned 60% of what whites did. (The report, like most other research on the issue, combines data for all racial minority groups and doesn't calculate details for individual minority groups).

When you declare bankruptcy, you are taking an official legal action — essentially saying, "I cannot repay all of my outstanding debts and want to make a fresh start." Unfortunately, a Chapter 13 bankruptcy filing will remain on your credit record for at least seven years, and Chapter 7 bankruptcy filings can stay there for 10 years. Either of these bankruptcy filing can affect both your credit score and how lenders perceive your credit worthiness.

Bill Consolidation Debt Why is the gap between races in wealth so much greater than the gap in income? Economists and researchers point to numerous reasons, including historical patterns of discrimination in wages, job opportunities and access to the credit needed to start a business. But differences in the way whites and nonwhites invest appear also to be key. Minorities own homes at a much lower rate than whites and are far less likely to tuck their earnings into higher-risk investments such as stocks, which have generated a huge portion of the nation's new wealth over the 1990s.

Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments, offs, and debt collection activities. Both also provide exemptions that allow people to keep certain assets, although exemption amounts vary among states. Note that personal bankruptcy usually does not erase child support, alimony, fines, taxes, and some student loan obligations. And unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid mortgage or lien on it.

Consolidation Debt Quote "The robust stock market has made racial differences in wealth even more pronounced," said Dalton Conley, a sociology professor at New York University who studies wealth and race. Furthermore, "even though everyone is doing better now, those who have the money to begin with are doing the best."

Chapter 7 Bankruptcy involves the selling off (or "liquidation") of a business' property to pay off debts. The bankruptcy process starts when the business files a petition with the bankruptcy court. The petition must list all of the business' property, debts, and recent financial history. The court will then appoint a trustee who will sell off some of the business' property to help pay the business' debts. Some debts will be discharged by the trustee, meaning that the debts will not have to be paid. Other debts are not dischargeable including recent taxes, debts in prior bankruptcy, and penalties payable to the government.

Consolidation Debt Lead In other words, it takes money to make money, and research has shown that whites inherited far more money than minorities.

Looking at Inheritance

Consolidation Debt Non Profit In 1994 -- the most recent year for which complete data are available -- an annual survey conducted by the University of Michigan found that whites were three times as likely to have inherited more than $10,000 within the previous five years as blacks. Among families that had inherited, the survey found the average value of a white family's inheritance was $74,000, more than double that of blacks' $33,000.

Consolidation Debt Loan Online "Minorities and whites simply aren't starting from the same place," says Thomas Shapiro, a sociology professor at Northeastern University and an expert on racial wealth disparities. "Not inheriting puts them at a significant disadvantage."

Consolidation Debt Home Loan Part of the gap is simply the result of statistical quirks. Wealth figures are calculated by household, not individual. More blacks, for example, are single than whites and so household net worth, and income, is likely to be lower even if the individual members are equally well off. Still, experts say differences in the two groups' financial behavior offer a more complete explanation for the differences.

Christian Consolidation Debt Take stock ownership, for example. In 1997, 48% of whites owned stock, and stock portfolios accounted for 21% of their overall wealth, according to New York University Economics Professor Edward Wolff, an authority on wealth distribution. Only 10.4% of blacks owned stock, by contrast, and stocks accounted for just 9.7% of their overall net worth, he found.

Consolidation Debt Information Wealthier African-Americans are more likely to invest, but differences remain. For households making more than $75,000 per year, 66.7% of blacks owned stock, compared with 80.5% of whites, Mr. Wolff found. Stock accounted for 23.5% of these whites' total net worth and 15.1% for these blacks. New data show that Americans continue to pour money into the stock market. Stockholdings at the end of last year accounted for a record 31.7% of overall household wealth, up from 28.3% in 1998, according to a Fed survey released Friday. (Those data aren't broken out by race.)

Agency Consolidation Debt Take Sabrina Moore, a 42-year-old African-American controller for a Chicago steel company. Despite majoring in finance in college, Ms. Moore didn't begin investing until relatively recently, focusing first on amassing money for a down payment on her home. Ms. Moore's parents -- her father is a retired social worker while her mother is a retired schoolteacher -- scrimped and saved to send her and her brother to college, so investing was not something the family discussed. "They always talked about saving money and living within our means, but stocks never came up," she says.

Getting Into the Game

Consolidation Debt Solution But about six years ago, with her house mostly paid off and her parents enjoying a comfortable retirement due to their pensions, Ms. Moore says she finally felt ready to invest. Since then, she has limited her portfolio to mutual funds, joking that "when it comes to individual stocks, I'm still a bit of a chicken." Still, very few of her friends have even been willing to go that far. "Since investing is not something that's staring them in the face, it's just not something they tend to discuss," she says.

California Consolidation Debt The racial differences are narrower but still significant -- when it comes to owning a home, the other main asset used for building wealth. In 1998, 46.6% of blacks and 44.9% of Hispanics owned their own homes, compared with 72.2% of whites, according to the Joint Center for Housing Studies at Harvard University.

Consolidation Debt Loan Uk Offering further evidence of this gap, college-educated blacks and Hispanics are less likely to own their own homes than whites possessing only a high-school degree, the center found.

Consolidation Debt Equity Home Also hurting many minorities' financial security: Their homes tend to appreciate much less quickly than those owned by whites, making it harder for them to build the equity needed to fund major purchases or refinance more-expensive loans.

Consolidation Debt Government Citing the wealth gap in a recent presidential debate, Vice President Al Gore pushed for stronger affirmative-action programs, saying "to me, that justifies making available capital for young entrepreneurs and making available advancement in every sphere." He has also called for expanding the earned-income tax credit and creating an array of small programs aimed at increasing Internet access and technological know-how among low-income Americans.

Consolidation Debt Firm Some experts say the only way to truly eliminate the gap is by encouraging blacks to take advantage of the very instrument that has helped maintain it: the stock market. Several have proposed cutting capital-gains taxes for minorities as part of a broader effort to encourage blacks and Hispanics to invest.

Consolidation Debt Financing On that score, there may be some reason for optimism: Since retiring, Ms. Moore's father has become an avid investor, tracking her mutual funds and pestering her with stock picks. She and her son frequently discuss stocks, and the 16-year-old runs a mock portfolio he set up online in preparation for real-world investing. That day isn't far off -- a few years ago, Ms. Moore opened a mutual fund that he will have access to when he turns 21. "His upbringing will be totally different from mine," she says. "Investing is something that he's already comfortable with."

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