Since 2008, many Americans continue to lose their jobs due to the terrible economy. The lucky ones who were able to keep their jobs are still not immune to debt problems. Lately it seems like a lot of corporations are moving their manufacturing and headquarters overseas, no one is really safe from losing their job. Over the past 10 years, many Americans fell deeply into debt. The idea that everyone deserves to be able to live like a rock star, wear designer clothes and drive expensive cars will only work for a limited time. Many of them borrowed against their home equity to support this lifestyle and are now buried face down in their mortgage. Some can barely afford it, but many are looking at options like loan modification as a way out.

Many people are just a little disaster away from filing for bankruptcy to get rid of creditors. The disaster that many have faced could be unemployment. Unemployment rates have been above 7% for more than five years until recently, and while the government continues to say things are improving, there is no data to support a recovery. An interesting number to look at that raises a lot of questions is the relationship between employment and population. Ten years ago, 63% of Americans ages 16-63 were employed, and now that number is just 58%. In 2009, the national unemployment rate was close to 10% and the employment rate to the population was 58%. The latest figures released showed an unemployment rate of 6.7% and the employment rate to population was back at 50%. What I mean is that the employment-to-population ratio should increase as the unemployment rate decreases. Just an idea, maybe the unemployment rate is not a real number. More American families are ending up signing up for food stamps as this economy continues to spiral down.

For those facing unemployment and no way to pay their bills, there is no shame in considering filing for bankruptcy. Filing for Chapter 7 bankruptcy is the quickest and fastest way to stop creditors and destroy a large amount of unsecured debt. Those buried in their credit cards and losing their homes to foreclosure can rest assured that a Chapter 7 will remove all of their past failures and give them a second chance to start over. Last year, the mortgage forgiveness tax expired, putting people who lose their homes to foreclosure into a taxable situation due to loan deficiency. This would be a double whammy for anyone just trying to survive. The last thing anyone would want is for the IRS to come after them when they’re out of luck. Listing the house in bankruptcy will eliminate any deficiencies that were left unpaid prior to foreclosure. Like all bankruptcy chapters, Chapter 7 shares the power of automatic stay and will stop creditors in their tracks. The automatic stay will stop lawsuits, foreclosures, at least temporarily, and wage garnishments for those already in deep financial trouble. In 4-6 months, the individual filing will receive a bankruptcy discharge and leave this entire sector of their life behind. After the bankruptcy discharge, the individual can begin to rebuild their credit and be on the path to being debt free. When a job loss occurs and there is no other way out, filing for bankruptcy could be the answer to this disaster.