Experiencing a financial crisis can be embarrassing. Often we might try to hide it or otherwise compensate for it in some way: some people will do just about anything to avoid defaulting on their obligations. The fact of the matter, however, is that more and more people are failing to maintain their financial status; the global market downturn is having a monumental impact on us all. Indeed, America is encountering an unprecedented wave of credit defaults, foreclosures, and bankruptcies. For some, it might help to know that you are not alone- even the most financially thrifty and responsible persons can be deeply affected by the turmoil in this unheard-of worldwide economical sandstorm.

 

The year ending 2008 is expected to see as many as 2.2 million home foreclosures, which was the same amount for 2007 when foreclosures were up by an extraordinary 75%. That is an enormous percentage of the total homeowners in the country. In fact, during a particular 6 month period in 2007, foreclosures numbered 200,000 or more every month. Because there was a record period of growth, there will now be a record period of decline that will impact people from all walks of life. So many homeowners are struggling that the government has passed legislation that will prevent people from losing their properties in the light of this worldwide crisis.

 

Bankruptcy filings are up as well- by more than an astonishing 30%. By the end of 2008, it has been projected that 1.2 million bankruptcies will have been filed for the year. This is occurring even with the new bankruptcy laws enacted in 2005 that were designed to make it harder to file bankruptcy. In fact, there are so many new bankruptcies being filed that it has created a nearly overwhelming strain for bankruptcy lawyers and clerks- perhaps some of the only people in the world to be benefitting financially from this economic meltdown. Their newfound business will be bitter-sweet, but the fact remains that their services are needed now more than ever. As if to illustrate this point, bankruptcy filings are especially high in the areas hit hardest by the housing slump- California, Florida, and Michigan all report filings up 30% from this time two years ago, and those numbers are expected to increase for some time. Fortunately, many bankruptcy proceedings are allowing consumers to keep their homes, thus alleviating the number of foreclosures the country is currently experiencing.

 

Last quarter, 1% of all credit card accounts were considered seriously delinquent- 90 days or more past due. When you consider that the total credit card debt in this country is currently 15.4 billion dollars, that represents a huge portion of balances that are technically doomed to default. Last month alone, credit card debt rose by 11.3% - an unexpected increase, but one that has been trending with similar increases for several months now. This means that consumers are using their revolving accounts more to maintain their basic expenses, especially now that funds from refinancing mortgages have virtually evaporated. This is dangerous territory from a credit standpoint, as the situation will almost surely result in more people filing for bankruptcy protection.

 

The point is that many people are struggling. Even responsible people who have always been very careful about their finances are being included in the ever-increasing surge of foreclosure notices, collection activities, and bankruptcy filings. But you should know that you have options. There are ways to get help, and there are things that you can do to pull yourself up from the drudgeries caused by the global financial catastrophe that we are all experiencing. Bookmark this blog, as we will discuss in clear terms how to manage, utilize, or avoid any of these predicaments.

 

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This entry was posted on Wednesday, March 11th, 2009 at 7:20 am and is filed under Economy & Politics, Financial Market, Long Island Law Firm. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.