According to the National Bankruptcy Center, consumer bankruptcy filings rose in February of 2011. The American Bankruptcy Institute Executive Director, Samuel Gerdano, said, “Though consumers are striving to reduce their debt burden, high unemployment and a poor housing sector continue to fuel new bankruptcies.”
Personal bankruptcies have fallen 8% compared to the same time a year ago. The data for the first couple of months might indicate consumers won’t have a repeat performance of bankruptcy filings in 2010, where more than 1.6 million bankruptcies were reported (the highest level in five years).
Not everyone can avoid bankruptcy. When are you financially bankruptcy and when should you consider filing for bankruptcy protection? If your current sustainable income plus any cash reserves will not pay all of your living expenses, pay interest on outstanding loans, and reduce some of your principal on those loans, while paying on them for five years, you may be bankruptcy. Paying off debts for five years is chosen because five years is the maximum legal number of years a United States Bankruptcy Court allows for a bankruptcy repayment plan.
Avoiding bankruptcy in this economy may take planning, skill, and luck. Our country has enjoyed good fortune (luck) throughout most of its glorious history, and most citizens have reaped the economic benefits. Even last year when bankruptcy filings were very high, the number of filings was only 1% of the adult population.
Bankruptcy can occur due to a divorce, foreclosure on personal or business property, loss of income, health problems, poor business decisions, bad timing, bad advice, or a poor economy.
Planning to avoid bankruptcy is not always successful, but without plans you are much more likely to experience bankruptcy. Planning to avoid bankruptcy can include purchasing insurance, contributing to a financial savings, building a reserve fund, and establishing a retirement account.
Developing good skills can also help you avoid becoming bankrupt. Some of the skills you might use to avoid bankruptcy include: accounting skills, specialty work or trade skills, social skills, reading and writing skills, and planning skills.
Can you avoid bankruptcy? If you have suffered a personal or financial crisis, maybe not. If you are considering filing for bankruptcy protection, you may need the legal expertise of a bankruptcy lawyer. If you need of relief from the stress of debt and you live in or around the metropolitan area of Oakland, California, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.
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