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 from debt problems. Lately, it seems that as many companies are moving their factory and headquarters abroad, no one is really safe from losing their job. Over the past 10 years, many Americans have gone into deep 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 while. Many of them borrowed against their home equity to maintain this lifestyle and are now buried upside down in their mortgage. Some can afford to pay just for it, but many are looking for options like loan modification as a way out.

Many people are one little disaster from filing bankruptcy to get rid of creditors. The disaster many have faced could be unemployment. Unemployment rates have been above 7% for more than five years until recently, and while the government keeps saying things are looking up, there is no data to support a recovery. An interesting number to consider that raises many questions is the employment / population ratio. 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 published figures showed an unemployment rate of 6.7% and the employment rate for the population was again 50%. My point is that the employment / 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 downward.

For those who are facing unemployment and have no way to pay their bills, they shouldn’t be embarrassed when 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 who got buried in their credit cards and are losing their homes to foreclosure can rest assured that Chapter 7 will eliminate all their past failures and give them a second chance to start over. Last year, the mortgage forgiveness tax expired, putting people who lost their homes to foreclosure taxable because of the 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 go after them when you’re already unlucky. Including the home in the bankruptcy filing will eliminate 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 serious financial trouble. In 4-6 months, the person filing the application will receive a bankruptcy discharge and will leave this entire sector of their life behind. After the bankruptcy liquidation, the individual can begin to rebuild his credit and be on the road to debt free. When a job loss occurs and there is no other way out, filing for bankruptcy could be the answer to this disaster.