Surf City Lawyers - March 2019

714-533-9210 MARCH 2019


THE RECESSION IS COMING How Can You Best Be Prepared?

While the country’s economic future isn’t necessarily a topic that the vast majority of Americans mull over at their kitchen tables, it’s one that needs attention. Those who are paying attention to relevant markers know that another recession is inevitable, and in fact, it’s already started. For example, in the manufacturing sector, the first round of layoffs has already begun. Perhaps more than any other event, layoffs are a clear signal of upcoming societal financial hardship. My intention here isn’t for you to interpret this article as some kind of fear-mongering diatribe on upcoming economic stagnation. Rather, I want to be 100 percent transparent about your options because, while there is no halting the recession, you are perfectly capable of navigating it — you just need the right preparations. While doomsday preppers have a reputation for being overly frightened conspiracy theorists, their ability to plan is unmatched. Just as you would stock your underground bunker with water and nonperishable items when preparing for the end of the world, you need to bulk up your savings to prepare for temporary economic decline. Pull back on spending and concentrate on the basic necessities like food, clothing, and shelter. If you can afford your needs, then start saving, saving, saving. In addition to streamlining your budget, the best way to combat the recession is to eliminate all the debt you possibly can. If you calculate your cash flow and determine that it’s going to take you over five years to pay off your loans, you should seriously consider bankruptcy as an option. Take a look at the payment comparison chart provided. If you have $30,000 in debt and you are making $500 monthly payments at 15 percent interest, it will take you 9.3 years to fully pay it off. That’s almost an entire decade of your life spent struggling to make ends meet due to debt. The chart also delineates your repayment plan if you were to file Chapter 13 or Chapter 7 bankruptcy, decisions that would either cut your years of repayment nearly in half (with no interest

added) or reduce your debt to nothing. I’ll say it again: If it’s going to take you longer than five years to eliminate your debt, you need to take a long, hard look at alternatives — especially with a recession on the horizon. A frequent initial fear I hear from clients whose debts I’ve settled is that they worry that filing bankruptcy will lower their credit score so drastically that they won’t be able to apply for a mortgage or car loan. From my experience helping clients — and even from own personal experience filing bankruptcy (yes, I’m a product of my own services) — the moment you get your discharge, creditors will immediately start soliciting you for loans. Another reason clients are nervous to explore this option is because there is a stigma attached to the word “bankruptcy.” Given the societal beliefs that money equates to success and admitting shortcomings equates to weakness of character, people shy away from even discussing bankruptcy as an option. They view bankruptcy as the ultimate failure, succumbing to the misconception that it permanently destroys bank accounts, halts momentum, and is symptomatic of a poor work ethic. This couldn’t be further from the truth. In fact, few people know that bankruptcy is actually a constitutional right stemming from no source other than the Bible! Deuteronomy 15:1–2 states, “At the end of every seven years you must cancel debts. This is how it is to be done...” Prior to the last couple of centuries, bankruptcy was not just regarded as a legal human right; it was an expectation. To help get people out from under the cloud of financial stress and withstand the coming recession, we are dedicated to combating the stigma of bankruptcy and helping you live the life you deserve. Give us a call to set up a consultation.

–Christine Kingston

1 714-533-9210

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