Thursday, September 26, 2013

Bankruptcy Helps Some Workers Cope With Downsizing

Underemployment is a circumstance many Texans face today.  Frustrated by a tight job market, thousands of workers have settled for part-time jobs and employment that pays less than their previous jobs.  I often hear from hard working Texans feeling the weight of mounting debt after brief to moderate periods of unemployment and they are not alone.

The lone star state faired better than most of the nation following the 2008 recession, but that still does not mean Texans have regained all of their lost ground.  Citing newly released U.S. Census Bureau datathe state’s median income remains below 2000 levels, the Associated Press Reports. 
Texas is only one of two states where the poverty  rate declined, dropping to 17.9 percent in 2012 from 18.5 percent in 2011. The August unemployment rate fell sightly from the previous month to 6.4 percent, the Texas Workforce Commission said. 
In order to cope with lower incomes, some workers are now trimming their spending. They give up larger homes and vehicles for more moderately priced items.  Unfortunately, banks are not always so forgiving of consumers looking to return things they can no longer afford.  Even if a borrower returns a home, vehicle or other secured asset, they often owe a portion of the original debt.  This is where the United States bankruptcy laws offer consumers solid protection.  Dependent on income and other factors, consumers can either file Chapter 7 or Chapter 13 Bankruptcy and stop creditors from making attempts to collect on debts. Bankruptcy can offer consumers facing these difficult issues a fresh start.  
Periods of unemployment or underemployment can also cause some workers to fall behind on their mortgage or vehicle payments.  All to often, lenders do not do a good job working with these folks to modify their home loans and threaten foreclosure or repossession.  Using Chapter 13 Bankruptcy, I help consumers stop the banks from foreclosing and set up a payment plan so they can get back on track.  

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