As Norco consumer bankruptcy attorneys, we were interested to see an article suggesting that bankruptcy filers are increasingly coming from the ranks of small business owners and the self-employed. That was reported Oct. 25 by the Milwaukee Journal-Sentinel, in the context of an article about an increase in bankruptcy filings in Wisconsin. That state, like the country as a whole, has seen a steady rise in bankruptcy filings since 2006, the first year after the bankruptcy laws were changed. But according to bankruptcy lawyers interviewed by the newspaper, more and more bankruptcy filers are people whose small businesses were hurt by the economic downturn. With demand for their needs falling, many of these people aren't able to generate enough income.
One attorney told the newspaper that she sees tradespeople in their 30s and 40s who have families and mortgages to support, but whose work has dropped off. In particular, the article cited people in fields related to construction, which has seen a large drop since the housing downturn. With both residential and commercial construction stymied, demand has fallen for skills like landscaping and flooring installation. Businesses not directly related to construction, such as restaurants, have also been affected. When these small businesses run into trouble, attorneys said, their owners often turn to credit cards to keep things afloat temporarily. But if those temporary conditions become permanent, they can't pay back the loan and the interest keeps rising. In addition, one attorney said, these business owners don't always have good health insurance or healthy savings.
This article is about Wisconsin, but our Rowland Heights personal bankruptcy lawyers believe it could apply just as well to southern California. In fact, with our high unemployment rate and suffering construction industry, California may be even more vulnerable to the same forces. Self-employed people and small business owners often pour their hearts and hopes into their businesses, so they're not ready to close things down just because the economy has taken a downturn. But sometimes, this can lead to decisions, like dependence on credit cards or draining savings, that would get anyone into financial trouble. Some people in this position compound the problem by ignoring signs that bankruptcy is their best option, prolonging their suffering and sometimes allowing them to spend retirement savings that they would be able to protect in bankruptcy.
Rather than do this, we urge small business owners and other workers who are struggling to talk to Howard Law PC about a bankruptcy. This is not an easy decision or one to be made lightly, but our Costa Mesa individual bankruptcy attorneys believe it can be the right decision for people who are facing debt that they cannot realistically pay off. Rather than spend decades in financial purgatory, they can choose bankruptcy and rebuild their savings and credit from scratch. We guide individuals, couples and small businesses through the bankruptcy process, starting with choosing the type of bankruptcy that best serves their own needs and situation. If creditors continue calling after you file, violating the automatic stay on creditor calls, we can help you sue them to stop the calls and recover financial damages. And we counsel all of our clients on related issues like taxation and credit, so they can avoid unpleasant surprises in the future.
Howard Law offers free, confidential consultations, so you can speak to us without any risk or obligation. To learn more or tell us your story, call us toll-free at 1-800-872-5925 or send us an email today.