Very few people set out to open a credit card account intent on not paying off the balance. Those who do are assumed to be criminals, usually identity thieves or some other sort of con artist.
Credit card debt, and all other forms of long term financial drain that lead good people into the need to file bankruptcy, is very often caused by a setback of some kind, like illness or job loss. And if recent unemployment predictions are on track, we can expect the bankruptcy rate to continue to climb.
The News & Observer published an Associated Press report about the impact job losses are having across the country. The piece also warned of a dire future.
On February 5, the Labor Department will release its January unemployment numbers. Industry analysts expect to read that an additional 800,000 positions have been lost since March of last year. That's almost 1,000,000 more people out of work. In total, we can blame the loss of almost 8 million jobs on the Great Recession.
The Labor Department's report will also illustrate the theory that another four years of healthy fiscal growth will be needed to return to the country's employment figures to stable.
Job reports are notoriously vague, as the report will demonstrate that 5,000 jobs were added to the economy last month. For some, that signifies a positive sign. As does the rise of gross domestic product statistics, which show that this critical metric has climbed for the second quarter in a row.
Nevertheless, that small number is not enough to prevent the national unemployment rate from experiencing a slight increase. When the numbers come out, which are based on unemployment insurance tax figures turned in to state governments by companies, most are expecting to see 10.1 percent of the country's workforce out of job.
As our economy becomes ever more global and harder to track, the further out of touch those making the important decisions about our country's financial health become with the everyday workforce. All the statistics, theories and Wall Street rallies do not mean anything to the unemployed parents of four children.
Whether it's out of fear of new taxes, the expiration of existing tax programs, health care requirements or lack of credit to fuel growth, the fact remains that companies are simply not hiring. Stimulus projects designed to spark growth, like home buyer tax credits, are soon to expire and creating the fear that the faint signs of recovery will dissipate.
Signs of productivity increases can be attributed in part to business practices designed to get more out of fewer employees. It helps that those still holding a job are willing to do more to protect it, now that the realization of the recession has become clear to everybody, not just line workers and cubicle drones.
So what does all this mean for bankruptcy rates? Quite a bit actually. It isn't difficult to connect the sudden loss of income with the inability to pay bills. Today's conditions are making it worse though. At one time, jobs were easily found, shortening the time frame a person was without income. In that window of unemployment, people could get by on savings or available credit. With credit limits being reduced, loans hard to come by and savings at all time lows, the need to file for legal protection becomes necessary sooner than ever.
If you are out of work and see the window of financial viability starting to close, maybe it's time to call the Law Offices of John T. Orcutt at 1-888-234-4181 to explore some options. Bankruptcy might just be your best way "Out of the Red and Back in the Black."