According to the U.S. Bureau of Labor Statistics, the Consumer Price Index increased by 8.5% in the United States from March 2021 to March 2022. In other words, paying for essential costs like food and energy will cost 8.5% in the spring of 2022. Los Angeles is right on par with the country.
Over the same period, the Los Angeles metropolitan area saw an 8.5% increase. Some products have increased by less than 8.5%. Others, like food, align with the overall increase (8.6%). Others still far exceed 8.5%. For instance, the Los Angeles region’s energy costs have increased by 36.7%.
We don’t need to tell you how hard inflation can hit if you’re trying to make ends meet on the same income you had before inflation hit—or even if you’ve received a slight increase that didn’t keep pace with inflation.
Additional increases could be on the way.
You may have heard that the Federal Reserve raised interest rates in an effort to curb inflation. However, some Los Angeles residents may face two more financial obstacles in the future.
First, the moratorium on payments, interest, and collections for student loans is set to expire in August. Some people have redirected money to pay off student loans to cover rising living expenses. That extra cash will be gone if loan payments resume in September.
Second, unlike most of the country, Los Angeles has so far managed to avoid experiencing the dramatic rent increases. This is partially because rent for most of the city’s rent-stabilized apartments has frozen until spring 2023. However, only some have access to this defense.
Could Filing for Chapter 7 Bankruptcy With A Bankruptcy Attorney in Los Angeles, CA, Help?
Although declaring bankruptcy won’t make consumer goods less expensive, it might help you cope with the changes. You must pay interest each month if you have high-cost debt, such as credit card debt. You almost certainly also pay late fees to catch up or occasionally miss deadlines.
As an example, if you owe $5,000 on a credit card at an interest rate of 18% and make the minimum payment of 3%, it will take you roughly 19 years to pay off the balance, assuming you don’t make any purchases or pay any late fees or other fees. You will pay interest on that credit card debt for about half of the amount you pay toward it.
The cost is higher at higher balances and/or interest rates. It will take 27 years to pay off a $5,000 debt with the same minimum payment of 3% if your interest rate is 23.9%, and 65% of your payments will go toward interest.
In addition to saving you many years of loan payments and a great deal of money in interest, paying off that one debt would allow you to reclaim $150 per month to put toward the household budget. However, the majority of people have multiple debts. Depending on your debts and monthly payments, you can save hundreds of dollars a month by starting fresh.
Contact A Bankruptcy Attorney in Los Angeles, CA, Today!
Schedule a free consultation with a knowledgeable bankruptcy attorney from Winterbotham Parham Teeple, a PC by calling 800.400.9000 to learn whether Chapter 7 bankruptcy could help you withstand rising Los Angeles prices.