A new wave of bankruptcies may hit us in 2010 as higher income Americans find themselves unemployed and unable to find work with a comparable salary. Many analysts are reporting a “downward” trend of salaries amongst many in the middle-class who were making close to or even more than six figures. Many of those individuals were sitting pretty three years ago only to find themselves nearly destitute as the foreclosure crisis picked up steam and devastated the housing industry. In 2010 we may see more of those individuals seeking bankruptcy protection even after they’ve settled into lower income jobs. In 2009 many middle-class Americans who went down a notch in earnings were hoping for a recovery.
They delayed filing bankruptcy because they thought that if they could just hold on for a few months they would find a new job and be able to repay their debts. Unfortunately, many Americans who took lesser paying jobs may stay in those jobs permanently or at least longer than they had hoped. Mortgage payments and credit card debt that was sized for a high income now must be discharged in bankruptcy if they ever hope to get a fresh start, which is possible even with a lower salary. For many, filing bankruptcy is a huge psychological blow; but it doesn’t need to be that way. Bankruptcy can offer an excellent opportunity for those who have been “downsized” to get back on their feet and begin enjoying life again without the burden of massive debts. Only bankruptcy offers that type of second chance.