We’ve written a series of blog posts answering questions regarding the financial impact of bankruptcy and the economy on you. Call (262) 827-0375

It’s the Economy!

When working for the Bill Clinton campaign in 1992, political strategist James Carville came up with three key campaign talking points to keep staffers on message and hung them up for everyone to see in Clinton’s Little Rock, Arkansas campaign headquarters. They were:

  1. Change vs. more of the same
  2. The economy, stupid
  3. Don’t forget health care

Though these talking points were really only ever intended for campaign staffers and other insiders, they kind of leaked their way outside and became key themes the public started to associate with the Clinton campaign. Number two especially resonated with people, and soon Clinton supporters all over were saying, “It’s the economy, stupid!” The Clinton campaign and his supporters truly understood how important the issue of having a robust economy was to the majority of Americans. They decided if they could make the best case about ultimately taking care of the pocketbooks of the people of the U.S., they could win the election. In short, they understood money has the power to motivate people.

Even though quite a bit of time has passed since 1992, poll after poll still shows voters most often say the economy is the number one factor they consider when casting their votes. Needless to say, there are many different opinions about how to go about creating a strong economy, and it’s certainly not our place here to weigh in on policy, but since 2016 is a presidential election year, we know the state of the economy will certainly be discussed more and more as November approaches. In all reality, the candidate who convinces the American public he or she will do the best job handling the economy may very well be the winner of the White House and become our next president.

So now that we’ve established “It’s the economy” people care about, what do you think? When people stop and think about it, the state of the economy really does often times have a huge, direct impact on the lives of many Americans. For example, a poor economy may mean the loss of a job. The loss of a job has a huge, immediate effect on a family. Or maybe it’s not the loss of a job altogether, but it’s a stagnate salary or wages while cost of living prices continue to climb.

Conversely, when the economy is strong and people are making more money, they’re often spending more, saving more, and are better able to pay their bills. Perhaps the need to finance items or borrow on credit cards isn’t as strong as it is in times of financial hardship. To be sure, every person and every family is different; however, I think it is safe to say most Americans prefer the economy be strong and that all working Americans are able to make ends meet.

When we discuss bankruptcy and indebtedness, it’s important to remember the economy can often have a huge impact on the trends we see in our office as Milwaukee bankruptcy attorneys at Burr Law Office LLC. From this standpoint, we understand why so many people see the economy as the number one issue. No one likes going through financial hardships, and, when a weak economy makes getting out of a financial hole even harder, it’s no wonder people want to see it given top (or near top) priority by our elected officials.

Needless to say, there are a variety of different political issues that good-intentioned citizens can debate and disagree about. And, for some voters, there may be issues that are more important to them than the economy. But when we look at the profound impact the American economy has in the lives of individuals and families, it is quite easy to understand why this one issue seems to be pretty high on the priority list for most American voters.

So whether the economy is struggling or humming along, we understand that sometimes people need the help of experts and the help of bankruptcy laws to help them out during a troubling financial situation. At Burr Law Office LLC, we always work with the best interests of our Milwaukee area clients in mind, and we work to protect the future and the financial well being of you and your family. In all types of economic climates, we’re here to serve you. Give us a call today and find out how we can help you.

Exploring the Relationship Between Bankruptcy Reform, Recession, and Bankruptcy Filing Rates

Four years ago, the United States was hit with the largest recession since the Great Depression. Today, many economic analysts are still scratching their heads, desperately trying to uncover all of the contributing factors. In addition to dishonest lending practices and a lack of regulation on Wall Street, some have said that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 must share some of the blame. Here’s a brief look at how bankruptcy reform affected the recession and total bankruptcy filing rates:

2005 Bankruptcy Reform

Before 2005, creditors complained that too many people were escaping their debts by filing. At that time, people of all income levels could liquidate their debts by filing for Chapter 7. That’s why the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) added provisions that made it more difficult for debtors to file for Chapter 7 – provisions that included a higher filing cost and fewer dischargeable debts.

Global financial crisis

In the years following BAPCPA, consumers could no longer rely on bankruptcy in the same way. Instead, many people took money out of their home equity to pay off outstanding debts. Once the equity ran out, many homeowners faced foreclosure—in fact, one study found that mortgage defaults increased by 14% each year after the reform passed. This in turn led to a housing market collapse that further fueled the recession.

Number of filings

Once the recession hit, millions of people lost their jobs and were forced to file for bankruptcy. Even though the 2005 reform supposedly made it more difficult to file for bankruptcy, the number of filings went up from around 150,000 in the third quarter of 2006 to nearly 400,000 in the same quarter of 2009.

If you have any questions about bankruptcy reform and how it affects you, contact Burr Law Office. Milwaukee bankruptcy attorney Michael Burr is always up to date on the latest changes and will use his knowledge to help you get through your tough financial times. Call our office to at (877) 891-1638 to get started.