Some people who have been contemplating filing for a Chapter 7 bankruptcy have been waffling, in the hopes that the economy will improve.
Maybe they'll land a better job or a get that raise. Maybe then they can barter to get the interest rate on their credit card lowered.
According to recent reports by top economists: don't count on it.
As Los Angeles Chapter 7 Bankruptcy Lawyer Vincent Howard understands it, corporate earnings and job growth could slow to a standstill before the end of the year. It's been described by some as a "fiscal cliff" that could push us back into the recession from which we were beginning to emerge.
This is also important news for anyone considering their Los Angeles foreclosure options. It's a fact that home prices have actually been driven up in recent months. As it turns out, though, that's not actually an accurate reflection of the market. It's due to a glut of people who are underwater or on the verge of foreclosure who are trying to stall until the economy improves and the home prices go up again. This is not good news for them either.
But an experienced Los Angeles foreclosure and bankruptcy lawyer can help guide you through the process.
Details of this recent analysis were published in Forbes Magazine, where Bank of America economist Ethan Harris expects that we will be taking a plunge from this "fiscal cliff" relatively soon.
In fact, economists aren't really wrestling with the question of if we will fall back into recession, but when. A lot of analysts have been honing in on the impact of a number of tax increases and government spending cuts that are supposed to start at the beginning of next year. It's expected that could push the national gross domestic product to shrink by a little more than 1 percent by the beginning of next year. It's expected, however, that the federal government may work out some deals to cope with the worst of it. Others say that the revenue from the spending cuts and tax increases will kick in and we should be fine as a whole.
Harris, however, says others are missing the boat entirely on this. He claims the bigger issue is the slow growth of corporate earnings in the second half of 2012. That is going to be far worse for us, he says, than the federal government's issues, and could mean that job growth could shrivel to next-to-nothing by October.
For example, he noted that if you're a small business owner, you're going to be loath to take on a new employee or invest in a new project if you're uncertain and not confident about the future.
Of course, Harris is one voice among many, but he has a track record of more precisely predicting the market than his peers for the last several years - down to fractions of percentage points in terms of growth, as well as forecasting an accurate picture overall.
He also says there may be some false hope it the coming months, as the economy may improve a bit through the summer. There are the ripple effects that Europe's debt crisis will continue to have on the U.S.
But that's only part of the problem. He says that unless the federal government acts to roll back a number of those major cuts relatively soon, business owners are going to act with extreme caution moving forward. The closer we get to the beginning of next year, that could mean not only stagnant growth in terms of jobs and development, it could actually mean higher job losses.
In the face of that, another recession is a strong possibility, he says.
Los Angeles Bankruptcy Attorney Vincent Howard at Howard Law can help. You can reach us toll-free at 1-800-872-5925 or send us a message online.
Fiscal cliff could be worse than many think, By Stephen Gandel, Forbes Magazine