Recession And Bankruptcy
The National Bankruptcy Research Center has released information that January 2009 bankruptcy statistics are up 34% more than January 2008. Of course there is no doubt that these stats are running up more and more because of the falling economy in the US today. The United States entered the recession in December of 2008 and it has only continued to escalate since then.
More On Recession And Bankruptcy
Another rise in bankruptcy was experienced in 2005 because of the new bankruptcy laws passed in October of this year. These laws made it more difficult to file for bankruptcy. Those who had a strong feeling they were ready for bankruptcy did so before these new laws were passed so they could recover at a faster rate and pay off their debts easier as well.
The steady decline of the housing market is another reason bankruptcy filings are only continuing to rise and rise. Many homeowners are finding themselves in the situation where they are now paying more in their mortgage payments than their house is even worth. The housing market has nearly reached rock bottom and this is causing a great deal of financial stress in many households across the country.
Don’t think for one minute that large corporations are not suffering as well. Large companies such as Linen N Things and many others have already declared bankruptcy and closed their doors to customers. Car companies as well as banks and airlines are all in the same boat, struggling to make ends meet and keeping their head above water to avoid what may inevitably end in bankruptcy.
Yet another aspect of our economy which has contributed to the high level of bankruptcies this year is the mortgage rates. What has happened is that decades ago when people were really beginning to invest in their homes, the banks were selling incredibly low rates to get people to lend. As the years went on these mortgage rates have increased and increased to the point where homeowners cannot possibly make their payments especially combined with the declining housing market.
The middle class today is getting hit the hardest and from every aspect of life imaginable. With only so many options to take when everything in the economy is crumbling bankruptcy becomes the only way out for thousands of people today. There is nothing to be ashamed of when you decide that bankruptcy is the best option for you, these are times we have never experienced before and they are not going to get better before they get even worse.
As long as you are carefully watching your expenses, cutting back on luxuries that are not necessary and doing what you can to save every penny bankruptcy may not be in your future. Of course there are always unexpected turns of events in life and this is why you should be ready. The recession is here to stay and some professionals even say depression is not far off. Take care of your finances and if filing for bankruptcy is the only way out, take it. Don’t be embarrassed to take care of yourself and your family.