More People Liquidate in a Tough Economy

The U.S. Courts reported that as of June 30, 2010 that Chapter 7 filings are up 25% for the 12 month period over the same period ending June 30, 2009.  This is compared with Chapter 13 filings up 10% for the same periods.  The total number of bankrupcy filings both personal and business were over 1.5 million filings the largest since bankruptcy abuse provisions went into effect. So what does this mean?

It would seem that more people are not able to demonstrate an ability to repay their debts in bankruptcy and are opting for a liquidation of assets in order to get out from under the burden of their debt.  No one wants to relinquish their possessions, but this filing is usually used only as a last resort.  The impact of a bankruptcy filing can hinder your ability to obtain credit and even to get a job or insurance. 

It is no wonder with the number of unemployed individuals even though Virginia is among the states with better prospects for employments still unemployment figures for the state are higher this year than last.
Most families build a budget based on the presumption that employment will continue uninterrupted.  Making plans for job loss and/or disability (even while you hope it never happens) helps you to be able to continue meeting your obligations even when the unexpected occurs.  Let's face it, who hasn't had an unexpected expense occur this year alone?

Planning ahead while you are still employed can save you the long-term devastating impact of lost or reduced wages.  Financial Planners recommend between three to six months of savings at a minimum to carry you through an emergency.  If we are honest, most of us would have to admit we don't have that kind of savings, but here is the secret - start small and build your savings over time and don't touch it until a true emergency arises.  Because true emergencies are rare, your savings will build over the years to be a cushion of security when you need it most.

The best way to start that nest egg is to make savings automatic.  Have a portion of your paycheck directed to your savings account even before your net pay is deposited to your checking for bill payment.  You will never see the deposit and you can build your spending plan on the rest once the savings plan is addressed.  Contact your payroll department today and start saving for your future.

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