Carl and Lindsay didn't think it would happen, but now they're faced with a Credit0 decision that could change their lives. They never thought it would happen to them, but after a job loss suddenly the bills are mounting to a level they cannot handle. What are they going to do now? Will they lose their home? How will they pay off their bills?
Carl and Lindsay are not alone. Americans as a whole are still mired in a recession that's preventing, among other things, job creation.
Declaring bankruptcy can be a daunting task, and frankly many people don't think about this option until they're in dire straits. Some will argue people should never get themselves into a situation of bankruptcy, that it's a matter of bad Credit0 planning.
That's partially true, we spend more than we make, and when the going gets tough, we get overwhelmed.
But what happens when we're pursuing the elusive American Dream and someone loses their job? All of a sudden the car payments mount. Downsizing occurs, but you can't downsize on your home in fear you won't qualify for another.
If you wait too long you're left with nothing, that' can't happen. If you had acted soon enough, maybe you wouldn't be in this situation.
Regardless of the issues behind bankruptcy filings one of the items that we have to ignore is pride. When faced with the decision to essentially forgo your credit rating, or perhaps the embarrassment among peers, many people wait too long before considering bankruptcy.
Talk to a professional lawyer. Why? Because it could mean the difference between your home or a small apartment in the inner city.
But that's not all. In our current economic climate if you are thinking or your are declaring bankruptcy, you're frankly not alone.
In the state of California most cities have faced a doubling of bankruptcy claims in every year since 2007. Despite changes in the bankruptcy laws in 2005, the problems with our housing markets were evident well before 2008. Fast forward to 2011 and we're hitting all-time highs for bankruptcy filings.
Q2 2011 data saw California filings for Chapter 7 exceed 180,000. Q3 2011 saw that number grow beyond 190,000. A far cry from just under 30,000 Q4 2006.
You're not alone, and you should be taking actions to protect your assets. Given the fact your home is on the line, it makes it an easy to decision to pay for a professional attorney to review your file and represent your interest against those of creditors.
So when will it end? Will California and the rest of the US continue their dubious streak of record breaking Chapter 7 and Chapter 13 filings? Or is there some light on the horizon pointing to a better tomorrow?
When we look at data from California (we'll continue to use that state in our example), it is true, every subsequent quarter that bankruptcy data is released a new high is hit. However, looking closer at the data reveals another story.
Despite increases in filings in California each quarter the rate of increase is actually decreasing. That means we were used to 10% increases or more each quarter, but now that number of additional filers each period is declining. For most major cities these numbers are expected to plateau in mid-2011.
After that we should see a decline, how far we don't know, but it could be an indicator of an improving economy. Or perhaps it's an indicator that here are no more people to declare.....that's a joke.
So do yourself a favor and protect your assets. It's not a great place to be in, declaring bankruptcy, but you should do everything you can to pay back creditors, but most of all, protect your assets.
Once you recover you can take steps to ensure you do not face the same Credit0 circumstances again.
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