Given the deep economic crisis of the United States, all homes have been shaken in one or other way. Without doubt, the finances dictate our priorities and it is easy to fall in the temptation of giving up instead of confronting our problems.
However, refusing to take a timely course of action may increase your economic hardship and the emotional stability that you need to fight every day of your life. There are solutions for many of the problems the crisis brought us, we only need to analyze our situation, make a plan and act.
The most common problem of the current crisis is related to the fear of loosing one's home. Consumers are trapped in making high mortgage payments that are impossible to make when the labor market and businesses have fallen gravely. However, banks are unable to administer and resell the great number of houses repossessed. As a consequence, the foreclosure process is lengthy and offers opportunities to consumers. From modification of loans, to short sales, renegotiation of debt through a Chapter 13, to bankruptcy under chapter 7, there are multiple ways to give solution to the problem. You need to first stop to analyze what is your situation and then set your goals. You then go into studying the possible solutions and draw a plan.
Consumers have historically perceived the federal process under bankruptcy laws as the last and most extreme step in one's life. It is pictured as a decision that will make your failure public, will cause humiliation and will mean to give up all of your properties. That is nothing farther that the truth.
Bankruptcy laws were written to avoid personal failure. The economic community depends on the full ability of its workers and their buying power. There is no person that will produce to the market and consume when he or she is not healthy and happy. All of the contrary, debt and economic incertitude cause family problems and illnesses, which may last for the rest of his/her life. The depression caused by being indebted and the anguish for being unable of reverting the situation make a person feeling a failure. So, in order to have a fresh start, free from debts, the law gives consumers the great opportunity of turning your projects reality, transforming individuals in productive citizens, with buying power, for everyone's benefit.
The bankruptcy process is legal and simple. Although it requires and application before the Federal Court, the consumers go through a process in which he/she exercises his/her rights and is treated with respect. Neither banks nor their attorneys may negatively question you for having exercised the right of filing a petition under bankruptcy laws. The process is allowed even in the instance of individuals not having a valid social security number. The applications are mainly made through Internet, and during the process applicants are generally required to appear to only one hearing before the Trustee. There is no questioning about why he/she is not paying the debt or why you created a particular debt. Filing for bankruptcy and not repaying the unsecured debt is a risk contemplated and afforded by the interest financial institutions charge to consumers when lending money.
Finally, the consumer does not need to give up all of his/her assets, or own nothing in order to file for bankruptcy. The laws protect your income, your home, cars, tools, pension and retirement plans, etc. etc. Of course, the bankruptcy filing will be reported to the credit agencies and will negatively affect your ability to obtain loans. In the same manner, failing to make timely payments, or having charged off accounts also cause a falling of your credit score and decrease your ability to obtain loans. Debt consolidation negatively affects your credit even when it requires you to make payment and may not free you totally from the need of filing for bankruptcy later on.
Financial problems are the cause of family conflicts. The stress is responsible in great percentage of individuals' illnesses. For that reason, failing to give solution to economic issues may bring as a consequence more serious problems that you may not anticipate.
There is a common belief and general hope that the United States will recover from this crisis in the near future. The decisions you take, as well as not taking any decision at all and refusing to conduct your destiny, will determine your role in the Country's next economic stage.
