This situation is not entirely new; for example, unemployment peaked at 10.8% in 1982. But then, the jobless could count on unemployment benefits and other government benefits to tide them over. The unemployment rate quickly went back down once the economy recovered, and the system worked. This time, long-term unemployment has overwhelmed government benefit programs designed to provide short-term relief, and the government has no money for new relief efforts. The result is that many American families are in an almost untenable financial position.
Many have been forced to liquidate their savings just to stay afloat. Once the savings run out, they sink. A proactive bankruptcy may be the answer to this dilemma.
Some people hesitate to file bankruptcy because they are afraid that they will lose everything, but that is simply not the case. By the time they file, it may be too late to take advantage of the financial fresh start that bankruptcy affords.
Assume that you are over age 50, and become unemployed. There is a real possibility that you may be unemployed for a number of months and/or you may have to adjust to a permanently lower standard of living. Instead of cashing in your 401k to pay bills, Chapter 7 bankruptcy may be a better option.
Chapter 7 can eliminate most or all of your unsecured debt, thus minimizing the bills you have to pay and giving you more time above water. You can then focus on keeping your secured debt current, and preserve the money in your retirement nest egg as opposed to giving it to credit card companies and debt-buyers.
If you are facing long-term unemployment, Chapter 7 bankruptcy can give you the time you need to work things out. For a free consultation with attorneys who understand how bankruptcy works, contact our office. Follow us on Twitter @Faro_Crowder.