How Your Company’s Holiday Season Can Lead to Bankruptcy
If you’re in debt after Christmas, Chapter 7 bankruptcy can make all the difference. In fact, as a bankruptcy lawyer, I’ve seen it help hundreds of people in the first months of the year.
It makes sense: Not only do the holidays often bring credit card debt, but the New Year’s season can be a great time to get a fresh start.
However, there’s one situation that people don’t think about as much: when you need bankruptcy because your boss’ company went under. If you’ve recently faced a holiday job loss or layoff, Chapter 7 can help make a terrible situation far better for you in the long run.
In Debt After Christmas Because of Your Boss
Not long ago here in Memphis, a popular cafe closed all of its locations just a few days before Christmas. They didn’t give their employees any severance or warning. As a result, dozens of people had to find other ways to cover their Christmas costs. Unfortunately for many of them, they’d already placed gifts on credit with the assumption they’d still have their jobs a few days later.
That holiday debt might not be astronomical at first, but interest accrues and over time, people who’ve lost jobs have to cover more regular expenses on credit – especially at the end of the year. After all, no one’s usually hiring right at Christmas.
In that situation, Chapter 7 can help you get a fresh start and get back on your feet, right when you need it most.
As another example, years ago I represented a man who ran a wood pallet company. Then the shipping company he used went into bankruptcy.
It didn’t matter how well my client managed his business: when another business he worked with went under, so did he – and so did all his employees. The downstream effect destroyed the jobs of people all over the country, including all the employees here in Memphis. I helped the owner file personal bankruptcy using Chapter 7, and his employees needed similar help as well.
Increased Spending Leads to a Sticky Situation
Every year, the media covers hefty Christmas spending as a good thing. It helps retailers stay in business and keeps the economy strong.
However, when we put all that spending on credit, it may not reflect as healthy an economy as we think. Instead, families have chosen to make a gamble: they assume their companies will stay financially strong, which in turn means they’ll receive future paychecks, which they assume will cover their debts.
At the same time, many companies are doing the same thing. They’re stretching themselves thin on the assumption that holiday spending will get them through. And when holiday spending shifts to other companies (especially big box stores and tech companies like Amazon) some of the smaller businesses can find themselves in the hole for debts they can no longer cover.
The best way to prevent this situation is for people and businesses to avoid spending on credit as much as possible, especially when it comes to big purchases right around the holiday season. The public’s spending habits in December and January can be so unpredictable that it’s a good time to remain conservative. If you don’t know you have the money in the bank to cover your holiday spending, don’t do it.
But for many people, this feels impossible or the advice comes too late. And in that situation, Chapter 7 can offer real hope.
How Chapter 7 Bankruptcy Can Help With Debt After Christmas
Chapter 7 bankruptcy allows you to get a fresh start by clearing your unsecured debts. This includes credit card debt, medical bills, personal loans, and more. It also has the power to stop wage garnishment and creditor harassment.
If you’ve gotten into debt during Christmas, Chapter 7 bankruptcy can make sure the debt doesn’t follow you for the rest of your life. No one wants to enter the next year with threatening and demanding phone calls from creditors and a sense that you’re already too far behind to catch up.
Do you have overwhelming debt you can’t pay? We offer a free meeting where we can discuss it with you, no strings attached.
We’ll look at what you owe and whether you qualify, and we can answer any of your questions free of charge.
There’s no better time to get your finances back in order and start with a clean slate. If you’d like to learn more about the process, just give us a call at 901-327-2100 or contact us online for a free appointment.