The Fiscal Cliff Will Cause Many to File Bankruptcy

There has been a lot on the news about the United States going over the fiscal cliff again. Back in October when Congress wouldn’t agree to the demands of the White House, there was a stalemate in the federal government shut down. That’s at least what they said. In actuality, it was more a matter of the White House selecting people to punish for Congress’s actions. In reality, that month the government spent $600 billion. That doesn’t sound much like a shutdown to me. Most Americans don’t even understand what is really going on here and how the US got in this situation. The Democrats are saying that we need to raise taxes so the US will be able to continue on down the path it is going. What most people don’t realize is for the last four years the government has been running a $1 trillion deficit every year and that’s from their numbers. If the government didn’t have the ability to print their way out of debt, the US would’ve defaulted a long time ago. Currently with QE4, the Fed is printing $85 billion a month and buying mortgage-backed securities with that. There is now talk of QE5. When will the people we elected stand up and say enough is enough.

According to Shadow Stats, the deficit for 2013 was $6.8 trillion. According to the government, there has been only $7 trillion in debt added to the US over the last four year term of the president. And they use the word “only” lightly. Most people don’t seem to care because they don’t believe it affects them. In reality, it affects every one of us because someone is going to have to pay this debt that the government took on. It will either come directly through increased taxes or through fees and higher interest rates that will cause massive inflation. Either way it is going to send many Americans into bankruptcy.

This year the Affordable Healthcare Act and other banking legislation has been passed and going into law as this is being written. All of this will have a huge impact on the way Americans live and how they will survive in the future. When the average income of an American family is now close to $30,000 a year, it’s pretty hard to believe how adding in the cost of healthcare will help anybody. Last year, the payroll tax was increased giving people a smaller take-home paycheck. Adding all of this together will force many middle-class Americans into a bankruptcy filing. It’s almost like they’re trying to destroy the middle class rather than help it.

While all of this is going on, the mainstream media keeps showing a rosy picture of the economy and telling us how we’ve turned the corner as less Americans are now filing bankruptcy. While this number might have been reduced over the last couple years, there are reasons behind the reduction of those who file bankruptcy to eliminate their debt. One theory is, many Americans are going further into debt and kicking the can down the road to avoid filing bankruptcy. On top of that, banks have once again started lending to consumers and allowing them to run large balances on their credit cards. This is the same punch people were drinking prior to the 2007 real estate bubble and financial market collapse. We are heading down the same path that caused a record number of Americans to file bankruptcy in 2010. There is no way to fix it now and everyone needs to brace for impact. Even further, there has been talk of the US losing its reserve currencies status because of its high amount of debt. Only time will tell how all this will play out when the rest of the world decides to cut up the credit cards of the US.

Advice And Options For Filing Personal Bankruptcy

Generally, bankruptcy instills negative feelings in people, who are planning to opt for it. This concept is something that makes people fear just because of the fact that they will have to lose their car, home and other belongings to file it. But, the tips and advice from experts in this field can help people to manage such a situation with ease and without any stress.

The first and foremost advice given is that people should educate themselves about the local laws pertaining to bankruptcy. When they can clearly understand the possible outcomes before filing it, they can somewhat decide whether it can be the right and suitable alternative for them. Here, firms offering the appropriate advice and help to intended people in this respect can help.

Also, people opting for filing it as the last alternative should think about opening a few new credit lines in such a way that they can rebuild their credit after filing insolvency. This can be done well-in advanced before filing it because secured credit cards can provide people with poor credit with the option of rebuilding their credit so that they need not have to get into more and more debt. It will be possible for them to see high rates on cards, however, this is going to be the case with any credit they get at this period. So, making use of secured credit cards in a responsible manner can help people in their credit score and can help them in getting approval of other types of cards and loans.

Also, they should collect details about the different options available under the filing of personal bankruptcy. They should also spend time in researching the different categories and once the right level of information is gathered, it is better to discuss the same with a professional, who can provide the right kind of guidance in this respect.

Also, when they are heading towards the filing of personal bankruptcy, they should never be tempted to run up cash advances on credit cards in the belief that they will be erased in legal proceedings. This is because this type of activity will be considered as fraudulent activity and also the individual might be forced to pay all the money back to the credit card companies.

So, getting the right kind of guidance and advice not only before, but also after filing insolvency is essential for making sure that everything will fall in the right place.

Starting A Business After Bankruptcy

Bankruptcy can be a challenging and testing time for many people that go through the process. It can test everything from your patience to strength, but many people believe it has made them stronger on the other end. The fact of the matter is that bankruptcy is not the end of the road. In fact, many people would argue it is the beginning to a hopeful future filled with promise and success.

There is a common myth that people who have been through bankruptcy are not able to start a business in the future, but this is simply not true. If you are looking to start a business after going through bankruptcy, know that it is possible. But while it is feasible and practical, it is important to understand and prepare for the obstacles and challenges you will face.

Be Realistic About Your Situation

The biggest piece of advice would be to stay realistic. It is almost guaranteed that you will face problems when looking for credit and financing. The best thing to do is to think about it from the other side. If you were the lender, what would make you willing to give credit to someone who has a history of bankruptcy? If you can put yourself in this mindset, you are much more likely to be able to convince a lender that you are able to run a profitable and successful business.

Some practical things you could do to improve your chances of receiving credit from a lender could be finding private investors to fund some of the venture, developing a detailed business plan, and partnering up with people who have a history of good credit. All of these things show a lender that you are set up for success.

Separate Yourself From Your Business

In order to take your idea and turn it into a functioning business, it will be important for you to separate yourself from the business and your history of bankruptcy. If you were a sole proprietor or partner, it is quite possible that you were forced to file for bankruptcy because of business debts you incurred. In the future, it could be a good idea to set up a corporation or limited liability company (LLC) to separate your personal responsibility from the business.

A second thing to note is that you will need to apply for and obtain a new tax identification number in order to setup your new business (That is, if your previous business was a sole proprietorship and was liquidated under a personal chapter 7 bankruptcy).

Be Smart and Have a Plan

There is much more to starting a new business after bankruptcy, but remember these two things: have a realistic plan and separate yourself from your past. If you can learn how to do these things, you stand a much better chance at starting that new business you are looking to get off the ground.