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Lower Wages, Underemployment, Factors in Chapter 7 Decision

June 23, 2012

If you think the only people who are contemplating a Los Angeles Chapter 7 bankruptcy are the unemployed - think again. staring.jpg

Los Angeles Bankruptcy Lawyer Vincent D. Howard has been seeing an increase in clients who have a job and even steady income - but they're underemployed or underpaid or both.

Of course, it's a symptom of the greater ill, which is the Great Recession. But regardless of the cause, people are finding that not only are the unable to maintain their lifestyle - they're drowning in debt. No matter how hard they struggle to pay down that interest on their credit card bills or the balance on that medical statement, they never seem to make any progress.

This is where a Chapter 7 bankruptcy can help. Not only is it going to halt your collection agencies from that continued harassment, it's going to provide you the chance to start over again. For those who are underpaid and underemployed, it's not going to mean maintaining the standard of living as before. However, it can mean a platform to start all over within these new budget parameters.

The New York Times recently detailed this new trend of people who are in jobs for which they are over-qualified - and not being paid what they should to do it.

The example the reporter gave was a 59-year-old bus driver, who started her 40-hour-a-week job at $9 hourly. Then her wages were slashed down to $8 hourly. Then her hours were cut. In a recent month, she earned less than $250. She's facing eviction because she can't pay the rent. She keeps putting off an appointment with her eye doctor because she doesn't have any insurance. She's already in over her head and she's one more hit away from being completely destitute.

She's not alone. Many people are living this nail-biting, paycheck-to-paycheck life right now, unable to cover the bills. When you are choosing between the rent and your credit card bill, you inevitably have to go with the former, which means you're getting socked with late fees and soaring interest rates.

A new book, published by the Economic Policy Institute, indicates that even when you adjust for inflation, the median hourly wage is lower than it was just 10 years ago. Jobs with benefits are tougher to come by, and people are staying in positions they may hate for longer stretches than they otherwise would. In fact, about 1 million fewer people quit their jobs this March, when compared to the same period in 2007.

Even educated and white collar workers have seen their wages stagnate as well.

Now, you compound those stunted wages with the fact that collage tuition has risen at a break-necking pace and more people relying on credit just to cover the basics, and the situation is dire for a greater number of Americans than ever before.

For some, bankruptcy is the best option.

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.

Additional Resources:
Lost in Recession, Toll on Underemployed and Underpaid, By Michael Cooper, The New York Times

More Blog Entries:
Stigma of Bankruptcy Filing No Longer Exists, June 13, 2012, Los Angeles Bankruptcy Lawyers Blog