Over the last couple years just about every American knows someone who had to file bankruptcy. In 2010 there were a record number of Americans filing bankruptcy like never seen before. Back in 2005, Congress changed the bankruptcy code to eliminate what they thought were serial bankruptcy filers. This was a group of people that Congress believed was capable of paying back at least a portion of their debts but instead would tap out all their credit cards before filing Chapter 7 bankruptcy to wipe the debt all out. While the court is still out on how many people actually went to this extreme to avoid paying their bills, Congress couldn't foresee what was to happen in 2007 when the real estate bubble burst and the financial markets almost collapsed. Since so much of the economy is attached to real estate and development, the entire economy went into a major recession.
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After the bubble burst real estate prices plunged leaving many people owing more on their homes than they were worth. Not only were people losing their homes to foreclosure, but having to file bankruptcy to protect themselves from the liability of the foreclosure. As time has gone on the Fed has pushed member banks to once again start lending to the American consumer through unlimited quantitative easing.
Many Americans had no other choice but filing bankruptcy until banks allowed individuals to kick the can down the road by giving them more credit. The US once again has the bubble being created in the credit markets with consumer debt exceeding $2.75 trillion in October of 2012. Not only that, the government encouraged young adults to treat themselves to a five-star education by taking out student loans. This has become another bubble in itself and has surpassed $1 trillion.
While everyone's pampering themselves, 2013 should be a time of reflection of the mistakes that the American people made. As an individual, people should consider making their New Year's resolution for 2013 filing Chapter 7 bankruptcy to get on the road to becoming debt-free. The term debt free is something that's not heard very much these days and was something that our grandparents prided themselves on. Prior to the credit card revolution that started back in the late 60s and early 70s, people used to save for large purchases and pay cash. When someone went to buy a new TV, they wouldn't slap it on their charge card and take two years to pay it off. Back then there was a thing called layaway where individuals would pay a deposit to hold something and come back making small payments until the item was paid off. At that time, the family would wait with excitement to see what they had worked so hard to buy.
Now, with consumer debt closing in on $3 trillion, people need to break the cycle and call a bankruptcy attorney about filing Chapter 7 bankruptcy. Creditors want Americans to continue believing the stigma that they created about a bankruptcy filing. They know that if the American people figure out the filing bankruptcy is not that bad, they will no longer be able to keep these people in bondage to debt. With so much is happening in the world, 2013 should be a year where people take back control of their financial future. For those in debt, it doesn't hurt to take the time and have a chat with a bankruptcy attorney to discuss their personal financial situation.
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