In today's economy many Americans are still trying to avoid filing bankruptcy at all cost.
Many people have this idea that recovery is right around the corner and everything will go back to normal.
No one seems to think that this might be the new normal.
Unemployment has now been close to 8% for five years and it doesn't appear to be getting better anytime soon.
Currently, 48 million American families are receiving food stamps.
This has increased from 27 million back in 2008.
As the government is talking about raising taxes, small businesses are talking about letting more people go and downsizing.
To me this appears like we will be seeing many more people in line at the bankruptcy court.
With QE infinity in full swing and the Dow reaching all-time highs the media keeps beating the drum of a full recovery.
In reality, American families are struggling to make ends meet.
With QE pushing money out of the banks, banks are once again increasing the available balances out to consumers by way of credit cards, auto loans and personal loans.
The only problem with this is people don't have enough money to make their payments.
Most Americans are only paying interest only on their credit cards and loans.
At some point in time all of this has to come crashing down.
This is why people need to be proactive when it comes to financial matters.
There are no guarantees that the real estate market and job market will turn around quickly.
Many experts have said if it does turn around, it will be at least 10 years.
Americans need to live in the here and now and if that means filing bankruptcy to get the creditors off their back, that's what they need to do.
Some people just continue to kick the can down the road by paying minimum payments and bleeding their savings dry.
When you look at it from the standpoint, what do you have to lose? A person will take a different perspective on things.
For individuals that are unemployed, they have more to gain by filing bankruptcy than they do to lose.
If they don't have an income they won't be making any large purchases, so what do they need any credit for.
People need to get over the stigma that they believe bankruptcy carries and do what's right to protect their family's well-being.
After filing Chapter 7 bankruptcy, all unsecured debts will be completely wiped out and for some lucky individuals they will be virtually debt-free.
For those that can afford to pay a car payment or a mortgage, they still will have some debt if they reaffirm it.
What most people don't understand is creditors are opportunists and understand that many will leave a bankruptcy being virtually debt-free.
As long as the individual can stay gainfully employed, creditors will see this as an opportunity to put someone back into debt knowing that they cannot file again for another seven years.
In a nutshell, credit will become available soon to those after bankruptcy but these folks need to beware and take it slow until they're ready to take on debt once again.