Since 2008, many Americans continue to lose their jobs due to the terrible economy. The lucky ones that were able to keep their jobs are still not immune from debt problems. Lately, it seems as many corporations are moving their manufacturing and headquarters overseas, no one is really safe from losing their job. Over the last 10 years many Americans got themselves deeply in debt. The idea that everyone deserves to be able to live like a rock star, wear designer clothes and drive expensive cars only will work for so long. Many of them borrowed against the equity in their home to maintain this lifestyle and now are buried upside down in their mortgage. Some can afford to still barely pay for it, but many are searching for options like loan modification as a way out.
Many people are just one small disaster away from filing for bankruptcy to get the creditors off your back. The disaster that many have been faced with might be unemployment. Unemployment rates have been over 7% for over five years until recently and even though the government keeps saying things are getting better, there are no facts to support a recovery. An interesting number to look at that draws many questions is the employment to population ratio. 10 years ago, 63% of Americans from 16 to 63 years of age were employed and now that number is only 58%. In 2009, the national unemployment rate was close to 10% and the employment to population rate was 58%. The latest release numbers showed a non-employment rate of 6.7% and the employment to population rate was 50% again. My point being, the employment to population ratio should increase as the unemployment rate decreases. Just an idea, maybe the unemployment rate is not a true number. More American families are ending up signing up for food stamps as this economy continues to spiral downward.
For those that are faced with unemployment and have no way to pay their bills, they should not be ashamed when considering filing bankruptcy. Filing chapter 7 bankruptcy is the quickest and fastest way to stop creditors and destroy a large amount of unsecured debt. The ones that got buried in their credit cards and are losing their homes to foreclosure can rest assured that a Chapter 7 will eliminate all of their past failures and give them a second chance at starting over. Last year, the mortgage forgiveness tax expired making individuals that lose their homes to foreclosure, be put in a taxable situation for the loan deficiency. This would be a one two punch for anyone that is just trying to survive. The last thing someone would want is the IRS chasing them when you’re already down on your luck. Including the house in the bankruptcy filing will eliminate any deficiencies that were left unpaid prior to the foreclosure. Just like all chapters of bankruptcy, Chapter 7 shares the power of the automatic stay and will stop creditors in their tracks. The automatic stay will stop lawsuits, foreclosure, at least temporarily and wage garnishments for those that are already in deep financial trouble. In 4 to 6 months, the individual filing will receive a bankruptcy discharge and put this entire sector of their life behind them. After the bankruptcy discharge the individual can start rebuilding their credit and be put on the road to becoming debt-free. When the loss of a job happens and there is no other way out, filing bankruptcy might be the answer to this disaster.