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Archive for September, 2010|Monthly archive page

The Recession May Be Over But Where Is The Recovery?

In Uncategorized on September 23, 2010 at 9:37 am

The recssion of 2007-2009 is officially over. It was the longest recession in 50 years. The economy lost more jobs during this recession than during any other recession since the depression. Unemployment is at its highest level since World War II, if you include people working part-time who wish to work full-time and those who have given up looking for work.

But for many people the recovery has not started. The enconomy has lost more jobs than it has added since June 2009 when the recovery began. And the outlook for job creation remains bleak. Many economists estimate that job growth seems likely to stagnate or grow worse in the near future.

People’s need for protection from creditors has never been greater. Loss of income remains the biggest reason for people to file for bankruptcy protection.

Thoughts On An Economic Recovery

In Uncategorized on September 15, 2010 at 3:02 pm

Is the economy going to recover anytime soon? Don’t look to the middle class to help. In a word, people are tapped out. Consider the following: since the 1970’s, income for the average worker has not kept up with inflation. That means sons are earning less than their fathers. Meanwhile, he costs for necessities like health care, energy, and education continue to rise. If you are struggling to keep your head above water, this is probably the reason.

The growth in earnings went mainly to those at the top. In the 70’s, the top 1% of earners had an 8% share of the nations income. Today 23% of the nation’s income goes to the top 1%.

So don’t look to the middle class for increased spending to fuel an economic recovery. They have their hands full just paying the bills.

What Happens If You Stop Paying Credit Cards?

In Uncategorized on September 8, 2010 at 9:15 am

I advise my clients to stop paying on credit cards once they decide to file a bankruptcy case. What happens if you stop paying them? You can expect to receive collection notices from the credit card company for about three months. Your account then gets sold to a collection company. The collection company will attempt to collect the debt for about three months. Finally the debt is sold to a lawyer. It takes the lawyer about three months to obtain a judgment from court. The judgment can lead to garnishment and a judgment lien on real estate.

So why do I tell clients to stop paying credit cards? To eliminate unnecessary spending prior to filing bankruptcy. Clients use their income to pay for the fees and costs of bankruptcy. Getting the bankruptcy case filed stops all debt collection activities. Stop paying credit cards helps to get the bankruptcy case filed quicker.