Plan for Success

Posted by Kevin on August 5, 2017 under Bankruptcy Blog | Be the First to Comment

Although the Great Recession started in December, 2007 and ended technically in June, 2009, economic growth has been sluggish through the 2016 election and even to this day.  Participation in the work place went from 66.4% in January, 2007 down to 62.5% in October, 2015.  That means that people lost their jobs and withdrew from the work force for extended periods of time for a myriad of reasons.

In July, 2017, the Department of Labor indicated that US employers added 209,000 jobs.  More importantly, wages are going up.  This is bringing many people back into the work force.

It is not surprising that many of the people who had been sitting on the sidelines for extended periods of time have accumulated significant debt over the past few years.  In the past, I would receive a steady stream of calls from people who were outsourced (or otherwise laid off) or downsized concerning lawsuits or threatened lawsuits, and garnishments from their creditors.  In the last few years, however, I get less such calls.  That does not mean that people have not accumulated debt.  It probably reflects certain policy decisions made by creditors about the viability of suing people when they are out of work and, therefore, judgment proof.

Once you get a job, however, you may not be judgment proof.  Granted, if you go from unemployment to a minimum wage job, you may not be subject to creditor harassment.  But, what if you were unemployed for a year or more because your job was outsourced.  You have education and skills that in the right job market, could translate into a sizeable salary.  In that case, if you get back into your field, it is only a matter of time before debt collectors will be in touch with you.

So what do you do?  Wait for the telephone call?  Or the summons and complaint to be delivered by the sheriff?   Probably, it would be better to be proactive.  At the least you should do a personal financial audit.  How much debt do you have?  Is it unsecured like credit cards or medical bills, or secured (collateral involved).  Is it student loan debt that may not be dischargeable in bankruptcy?  How much are you going to have from each paycheck after your monthly expenses to pay those back debts?  Are there areas where you can cut back?

When we deal with prospective clients, we try to tailor our advice to their specific economic situation.  Some may have defenses to creditor action so fighting a collection action in State court may be the way to go.  Others may find negotiation with specific creditors can get a payment plan or settlement at a reduced amount.  Some are better served by engaging a reputable creditor counseling agency.  Others may need the protection afforded by the Bankruptcy Code.

Congratulations.  The economy is getting better and you are back in the job market.  But, if you have accumulated debt over the last few years, have a plan to deal with it.