What’s Causing Inflation?
The federal government continues to rise interest rates. The Feds use interest rates as a tool to combat inflation. Rising interest rates means less inflation, hopefully. However, rising inflation also leads to recession. There are many reasons why people are using words like inflation, recession, interest rates, and what to do about it. Food and healthcare costs have skyrocketed. Gas prices have increased, but many on both sides are speculating either higher increases or gradual decline in price. I talked to a colleague recently who is anticipating gas will be near ten dollars a gallon by end of this year. Economists from all over the globe are watching the stock market.
While the stock market remains steady, any further increases in inflation, interest rates, job loss or other negative economic factors may lead to a steep drop. Additionally, the job reports have looked good, but many people are insisting on working remotely which causes other markets to faulter. It’s difficult for commercial real estate to grow, trucking companies are seeing shortages, and imports/exports have continued to be slow since the Pandemic. All these factors lead to rising inflation, which means more people are likely to file bankruptcy.
What About the Housing Market?
Many realtors I talk to are seeing a drop in home values. I spoke with one realtor who told me that anyone who bought a house within the last year on an FHA mortgage with three percent down is already underwater. This means the value of their home has already decreased in value so much that the house is not worth what they paid for it or what they owe on it. There has been a dramatic shift in volume of houses available. The market has transformed from a seller’s market to a buyer’s market in only a few short months. This time last year, there were so few houses on the market that bidding wars were starting to pop up again. Now, there’s too many houses and most of them are overpriced with the last of the wave of seller’s hoping to get last year’s prices. The housing market is expected to take a steep downturn. The age of foreclosures and short-sales may be upon us.
How Can Bankruptcy Help?
There are many causes that can lead to a bankruptcy. Job loss, divorce, medical debt and income reduction are some of the main reasons. If you are experiencing a hardship, bankruptcy may be your best way out. Creditors are hungry to collect on defaulted debt. I’ve seen a lot of clients at my office with lawsuits, judgments and pending garnishments. If you have been sued, you should act quickly to either settle the debt, set up a payment plan, or file bankruptcy, especially if you have other debts mounting up.
There are two chapters of bankruptcy, chapter 7 and chapter 13. Chapter 7 is a straightforward bankruptcy, which eliminates your debt through a discharge. You are not offering to pay anything towards the debt. Chapter 13 is a payment plan where you agree to make a monthly payment to help pay off some or all of your debt. You still get a discharge of any remaining debt left unpaid. Bankruptcy can help you stop lawsuits, wage garnishments, bank levies, and creditor harassment.
If you are feeling stressed about the size of your debt, bankruptcy can help you alleviate that stress and set you free on a fresh start. If you have questions about bankruptcy, CALL 623-777-4760 TODAY or CLICK HERE TO SCHEDULE AN APPOINTMENT. Consultations are free.