The banking crisis of 2008 followed by the worldwide recession has had its impact on families all across the US. The decade of easy credit came to an end in dramatic style and left many people struggling to cope. Bankruptcy in Mississauga, is now becoming much more common as people are burdened with debt they simply cannot pay off.

In the buildup to the credit crunch banks lent to virtually anyone who asked them, this led to many poor people, the so-called sub-prime poor, getting mortgages and credit that they could never ever pay off. This is one of the major factors in the banking crisis but it has had a knock-on effect on normal hard-working families.

The recession that followed the banking collapse led to widespread unemployment and a complete loss of consumer confidence, which spread right across the economy. People who had taken out loans and credit cards during the good years suddenly found their interest rates going up, they found they couldn\’t move to lower rate cards, and so they often took out further consolidation loans just to pay the monthly repayments on the first set of loans- a vicious circle started to emerge for many.

The net result of this is that large numbers of families are now facing debt they simply cannot afford to pay off. Banks are refusing to give loans to anyone who doesn\’t have a perfectly clean credit rating, which means families cannot move their debt or pay any substantial amount off.

This is causing a great deal of anxiety amongst people right across the states, and with the economy showing no real signs of changing for the better it seems there is no light at the end of the tunnel. But before hard-working families get to distressed it\’s important to realise that there are steps they can take to mitigate the situation.

One possibility is a debt management plan which would see some or all of the interest frozen and the monthly payments decreased in line with what they can afford. These are proving popular but of course the debt still remains and if there is no income to make regular payments then a debt management plan cannot work in the long term.

The other possibility is to file for bankruptcy which allows for the whole debt to be written off. In the US there are two types of bankruptcy chapter 7 and chapter 13. It\’s vitally important that families get good legal advice so they can choose the right option for them, both chapters have pros and cons and so do not suit all scenarios.

Filing for bankruptcy is not something to be taken lightly but at the same time is quite often the only option for families who\’ve reached the end of the road. With Bankruptcy Mississauga set to increase over the next few years the number of highly skilled lawyers who can help families is also increasing. These skilled attorneys can guide a family through the legal complexities of bankruptcy and fight for the best option for the clients.

Author Bio: For the best advice on creditor negotiation and personal Bankruptcy York region, Ontario residents all over the Toronto metro area trust Killen Landau & Associates.

Category: Finances
Keywords: loans,financial services,bankruptcy,customer service,financial security,debt,interests,principal pay