In today’s economy, many Americans are still trying to avoid filing for bankruptcy at all costs. Many people have the idea that recovery is just around the corner and that everything will return to normal. Nobody seems to think that this could be the new normal. Unemployment has now been close to 8% for five years and doesn’t seem to be getting any better any time soon. Currently, 48 million American families receive food stamps. This is up from 27 million in 2008. While the government talks about raising taxes, small businesses talk about letting more people go and downsizing. To me, this looks like we’re going to see a lot more people online in bankruptcy court. With QE infinity in full swing and the Dow hitting all-time highs, the media continues to beat the drum for a full recovery. In reality, American families are struggling to make ends meet. With QE taking money out of banks, banks are once again increasing the balances available to consumers through credit cards, car loans, and personal loans. The only problem with this is that people don’t have enough money to make their payments. Most Americans only pay interest on their credit cards and loans. At some point this all 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 housing market and the labor market will change quickly. Many experts have said that if it changes, it will be at least 10 years. Americans need to live in the here and now, and if that means filing for bankruptcy to get rid of creditors, that’s what they need to do. Some people just continue to pay minimum payments and bleed through their savings. When you look at it from the point of view, what do you have to lose? A person will take a different perspective on things. For people who are unemployed, they have more to gain by filing bankruptcy than they have to lose.

If they have no income, they won’t make large purchases, so why do they need credit? People need to get over the stigma they believe bankruptcy comes with and do the right thing to protect the well-being of their family. After filing for Chapter 7 bankruptcy, all unsecured debts will be completely eliminated and, for some lucky people, they will be virtually debt-free. For those who can afford a car payment or mortgage, they will still have some debt if they reaffirm it. What most people don’t understand is that creditors are opportunistic and understand that many will emerge from bankruptcy virtually debt free. As long as the person can maintain gainful employment, creditors will see this as an opportunity to put someone back in debt knowing that he cannot file again for another seven years. Simply put, credit will be available soon for those after bankruptcy, but these folks need to be careful and take it slow until they are ready to take on debt once again.