Castle Law Office Blog | Missouri & Illinois Bankruptcy Legal Blog

Is There Any Good News In A Financial Crisis?

I recently was involved in a discussion amongst other banruptcy attorneys and the subject of the economy came up as it has in most conversations these days.  After we moaned and groaned about what got this country where it is and what's being promised now to make things better, I started thinking about whether or not things can get better from here.  I think the answer is yes. 

Some of the worst things that happen to us turn out to be the best opportunities. Today's opportunity: We're on our way to living a better life with our money and here's why.  Although it is still uncertain if the market has bottomed out, if you really look at the situation, we, as consumers, hit bottom when the market was at it's highest.  That was when we reached the end of the line on overextending ourselves on credit.  When most people bought too much house or were talked into more home than they could afford through creative lending practices. 

When the economy is really good and credit is easily obtained, the average consumer will naturally become burdened in more debt.  Can we predict where we're going to be in 5 to 7 years? Or where mortgage interest rates will be? Or if we'll be in a position to afford the adjustable rate mortgage?.  With so much easy credit floating around and lenders coming out with products that make anybody look like they have the ability to take on more debt, it is no wonder we had such a hard fall from grace the minute a market adjustment occurred.  

As interest rates adjusted and legislation was passed to double the minimum payments required on credit cards, everyone began to feel the pinch.  Consumers looked to bankruptcy laws to help get out of a mess they weren't solely responsible for.  As more and more people sought debt relief, lenders made a push to change the bankruptcy laws because of the "abuse" by consumers.  Althought this resulted in a temporary slowing of bankruptcy cases, the numbers now have risen to all time highs, leaving lenders and Congress wondering what happened. 

Lenders themselves, like Washington Mutual, found themselves in the exact same position as the consumer - overextended on credit.  Instead of seeking relief from the bankruptcy laws, Congress sees fit to offer a bailout to help them in their time of need.  Now, General Motors, Ford and Chrysler are calling on the federal government for help. 

So, with all that said, there is something good about what's happening right now. According to the latest statistics, we've slowed down our spending in retail stores. Credit card data shows that we've cut down using our plastic. Different polls around the country indicate we pledge to spend less and save more. These are good habits that we should have even in the best of times.

These are solid habits that build a stable financial base for us and our family. There is nothing wrong with wanting to be financially stable, about not wanting to use plastic or the equity in our home just because we can. Sure it will take some time to get a consumer-spending based economy running again if we're not spending. But after that time, what we have built will be a good basis for years to come. 

When you have reached a financial bottom, there is no place to go but up.  We are all in this together and America will do what it takes to regain the financial strength it needs to survive.

Castle Law Group and St. Louis, Missouri and Illinois bankruptcy attorney James Brown frequently help people avoid foreclosure, repossession and wage garnishment by filing a chapter 7 bankruptcy or chapter 13 bankruptcy case.  If you would like to find out more about what options you have to get out of credit card debt, you can request a free copy of my book "7 Critical Mistakes to Avoid the Dismissal of your Bankruptcy Case" or give us a call toll free at 1-866-570-8484.