Where is Our Economy Going?   by Greg Tolland

in Law    (submitted 2011-12-22)

Where's the US market going? Views range from doomsday prophecies to cautious expectations. However, even as an election year approaches and information "spin" begins to increase from news agencies, it's clear that the economy continues to be not doing well.

Surprisingly, bankruptcies are minimizing nationwide. Signaling what could be a nationwide trend, the U.S. Bankruptcy Court for the Western District of New York reported a 17.5 percent drop in bankruptcy filings in Buffalo and Rochester. While the numbers for Manhattan and Suffolk counties haven't been reports yet, the National Bankruptcy Research Center and American Banking institute announced a nationwide drop nearing 8 percent during the first half of 2011.

What exactly does all this mean? Is the economy really getting better? Should we be hopeful? If the credit crunch and nationwide debt are taking such a toll nationwide, why aren't bankruptcies skyrocketing?

The typical opinion, however, is that recent downward trends in bankruptcy aren't a signal of a strengthening economy. Foreclosures in the US have delayed to a crawl: new regulations designed to curtail foreclosure-happy banks have terrified lenders. Most individuals that choose bankruptcy do so to protect a home. On top of that, there's an overall decline in credit creation: because the economy's in such bad shape, Americans want to spend less money. Finally, the cost of going bankrupt is prohibitive, forcing most Americans to find other means to live financially.

Even the Federal Government is getting in on the fact that a large number of banks violated the law during the homeowner credit crisis. As the government rose to defend the rights of homeowners, regulations were set up to protect them: and they worked. Banks now are not only terrified to lend, they're terrified to foreclose. It's become an unfortunate catch-22 for those who want to purchase property. Furthermore, the situation has reduced foreclosures, and lowered the desire for Americans to file for for bankruptcy to protect their home.

Americans are spending less. Overall, consumers have wised up, and are enduring the economic chaos by not spending as much. Fewer homes, fewer boats, fewer cars, fewer motorcycles, fewer flat-screen TVs--fewer overall big-ticket credit items are being bought nationwide. As a result, Americans have less in the way of assets to protect, making Chapter 7 a less inviting option for debt problems.

The government has made it harder to file for bankruptcy. The means test is a difficult task to accomplish without a lawyer. However, it's not impossible. If you need to know more about declaring bankruptcy, realize that it can be done with the help of a specialized attorney.

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