You may have heard that our current economy is being classified as a “middle class recession.” This phrase was coined because statistics show that bankruptcies filed by individuals who make more than $60k per year increased significantly beginning in 2008 when the economic recession began.
Statistics show that since 2008 bankruptcies have increased among higher wage earners and professionals. Especially impacted are people in the real estate profession; namely contractors, developers and agents. Following down the line are developers, builders and the many related tradesmen. Few people have been left unaffected.
There’s no secret to the fact that when the housing bubble dissolved, the incomes for a lot of American families disappeared. This is taking place throughout the nation is no exception. Bankruptcy filings gradually increased between 2008 and 2010 as a direct result of the collapse of the housing market, and continued stagnant economic growth. The lowering of the median income, loss of employment combined with dropping home values has placed a financial strain on people from all walks of life. Dissipating incomes and equity have led to the disappearance of disposable income which individuals once had to pay their credit card debts, mortgage and car payments. Without the safety net of equity to borrow against, and with less income, many people have fallen behind and need help.
The Different Types of Bankruptcy Relief
What most people do not realize is that there are different types of bankruptcy relief available for the specific situation you may be in. These variations of chapters were designed for a reason and are better suited for different financial situations. Our law firm can help you determine which type of relief is best for you and your family.
For example, Chapter 7 is typically filed by individuals who either lost a job or are underemployed (not making as much as they used to) and have fallen behind on financial obligations. Chapter 7 wipes out most debts, and in most cases allows you to keep your exempt property.
For individuals who have a regular source of income, but are either unable to get anywhere with their debt, or are falling behind on their home or car payments, Chapter 13 implements a 36 month-60 month payment plan to get yourself back on track. In a Chapter 13 your creditors will essentially receive what you can afford to pay back, and the balances including interest on credit cards and high interest rate loans is reduced or eliminated and forgiven altogether.
Another non-bankruptcy option is Chapter 128. Chapter 128 plans are ideal for high-interest-rate unsecured debts such as credit card debts and “payday” cash advance loans. Chapter 128 is a legal way to stop the interest from accruing on these debts.