Many experts thought that the end of 2023 would bring doom and gloom for financial markets and real estate market but the crash that was predicted never happened. As we step into 2024, the economic landscape remains uncertain, with lingering effects of the pandemic, rising inflation, and potential interest rate adjustments. This uncertainty can significantly impact various aspects of our lives, including our finances, properties, and future plans. If you’re concerned about how these factors might play out in the areas of bankruptcy, real estate, and estate planning. Below is a glimpse of what to expect in 2024 to help plan your finances in the future and feel free to check out the discussion on KKNW 1150 AM here:
Potential increase in bankruptcy case filings: The economic strain caused by inflation and potential job losses could lead to a rise in bankruptcy filings in 2024. Individuals and businesses struggling with debt may find bankruptcy as a solution for financial relief. Credit card debt is at an all time high as consumers try to navigate paying higher costs for everyday living expenses while wages fail to keep up with inflation. Chapter 7 bankruptcy may be an option for consumers that have a household income of below median income for their state and household size.
Chapter 13 Bankruptcy Filings May Also Increase: Chapter 13 bankruptcy, which allows individuals to repay their debts through a court-ordered repayment plan, might become more popular as it offers a way to keep assets while resolving debt. Chapter 13 bankruptcy is also a good option for high income earners to consolidate their debts into a single payment while reducing interest paid down to between 7-10% (amount paid to a chapter 13 trustee), rather than paying very high interest on credit card debt while only paying the minimums. In a chapter 13 bankruptcy a person can be debt free in 5 years and sometimes do not need to pay the full balance of their debts.
Chapter 13 can be a better alternative to debt settlement programs where a person must be delinquent on their debts and then try to negotiate settlements for less than the full balance. Debt settlement works best for people who already have a lump sum and are already delinquent as debt settlement can actually be more harmful to a personal credit and the savings may be negligible vs. chapter 13 bankruptcy as taxes may be due on any debt forgiven over $600 or more and many debt settlement companies have fees of over 15% of the total balance negotiated.
The Seattle Real estate market has been cooling down but home values may still rise in 2024: The hot seller’s market of recent years has cooled down significantly with the rise in interest rates, with slower price growth. With the lack of inventory in the Seattle market, there is pent up demand for buying a home but home buyers are struggling to save enough to buy a home. As mortgage rates decline, the home market may heat up again, but more likely is there will be slower increase in home value. I don’t see a real estate crash coming any time soon in the Seattle market as long as employment in the area remains strong.
Focus on rental market: With homeownership becoming less affordable for some, the rental market is expected to remain strong in 2024. Renters should be prepared for potential rent increases in the long term if additional housing in not built up.
Increased awareness of estate planning: The uncertain economic times might prompt more consumers to focus on estate planning to ensure your assets are protected and distributed according to your wishes. Estate planning can be different for everybody but a typical basic estate plan consists of a will, power of attorney, medical power of attorney and optional health directive.
Tax changes on the horizon for 2024: Potential changes to estate and gift tax laws could impact how individuals plan their estates. It’s crucial to stay informed about any legislative updates and consult with an estate planning attorney to adjust your plans if necessary. The current gift tax under the federal law for 2024 is up to $18,000 per year, per person and the federal estate tax is up to $13,610,000, however this number may decrease significantly in upcoming years. In Washington, the estate tax is $2,193,000 per person. To maximize this amount, a married couple can double their community estate tax limit by including a disclaimer/credit shelter trust provision in their will. For more involved estate planning, gifting or drafting irrevocable trusts may be advisable.
Focus on asset protection: With economic uncertainty, protecting assets from creditors and potential lawsuits might become a higher priority for estate planning in 2024. This is even more important as consumers potentially default on their debts and are looking for way to protect their assets. Possible solutions could be irrevocable trusts or even a trust in the Cook Islands.
Staying informed and proactive is key in navigating the uncertainties of 2024. By understanding the potential trends in bankruptcy, real estate, and estate planning, you can make informed decisions to protect your finances and secure your future. Remember, consulting with qualified professionals like bankruptcy lawyers, realtors, and estate planning attorneys can provide valuable guidance and ensure you’re prepared for whatever 2024 throws your way.
- Review your budget and adjust spending habits if necessary to help plan your finances.
- Seek professional advice if you’re struggling with debt.
- Start or update your estate plan.
- Stay informed about economic and legal developments which will help plan your finances.
By taking these steps, you can navigate the uncertainties of 2024 with confidence and ensure a brighter future for yourself and your loved ones.
I hope this blog article provides a helpful overview of what to expect in the world of bankruptcy, real estate, and estate planning in 2024. Please feel free to give Symmes Law Group a call at 206-682-7975 or contact us to plan your finances in the areas of bankruptcy, real estate and estate planning.