The majority of Americans are now living paycheck-to-paycheck. To put that another way, more Americans are closer to bankruptcy than ever before, and one missed paycheck could put them in the red and circling the fiscal drain. Most of these Americans are under the age of 40 and dream about entering the real estate market, purchasing a new home, or having children. In other words, they are the Americans who are building our future.
On the bright side, many consumers polled expressed optimism about their future financial expectations. It may be that the COVID hangover has not fully abated, and Americans are becoming comfortable living check to check.
What does a check-to-check economy look like?
It looks like a lot of credit card debt that is far in excess of savings. This is why bankruptcy attorneys are following this trend closely. While Americans are having a difficult time making ends meet, they are infusing their situation with capital via credit card spending. The debts remain solvent so long as the individual continues to make monthly payments. One missed paycheck, however, and that income stream is frozen, and the consumer is out of money.
So, it looks like chronic financial stress, credit card debt consumers are making minimum payments on, and one unfortunate turn away from consulting a bankruptcy attorney.
How can bankruptcy help me?
Once you start missing payments on credit cards, efforts to collect the debt are triggered by debt collectors who immediately jump into action. Creditor efforts come in the form of threatening letters and lawsuits. In most cases, the creditor need only show that there is an active debt owed by the debtor. Once successful, the creditor can place a lien on the defendant’s real estate. You probably want to avoid this and a bankruptcy lawyer can help.
Avoid a lien on your family home
Often, Americans do not want to declare bankruptcy because they want to be thought of as the sort of person who pays their debts. However, bankruptcy is necessary for the healthy functioning of the economy, and you do not want a lien to be placed on your home; you do not want your wages garnished, and you do not want to find your funds frozen in your bank account.
When should I declare bankruptcy?
You should discuss your situation with a bankruptcy lawyer as soon as you know that you will not be able to make credit card payments because your influx of cash is not large enough to accommodate your monthly expenses. However, most people declare bankruptcy once a lawsuit has been filed against them. This avoids a judgment being filed against the debtor and prevents adverse creditor actions such as liens and levies.
Talk to an Indiana Bankruptcy Attorney Today
Chris Arrington represents the interests of Indiana residents who are in financial turmoil, facing adverse creditor actions, or know they won’t be able to meet their monthly expenses. Call today to schedule a free consultation, and we can discuss your next moves immediately.