According to some economists, 2022 could be a year of financial reckoning for many Americans. Although bankruptcies and foreclosures fell sharply in 2020 and 2021, the easing of government stimulus, combined with tightening monetary policy, and global unease over the Russia/Ukraine conflict could cause a serious chilling effect on the overheating economy.

This quarter, Attorney Emil Fleysher of Fleysher Law Bankruptcy & Debt Attorneys, a leader in the consumer bankruptcy space, discusses the potential challenges ahead.

A Potentially Bleak Outlook for 2022 and Beyond

With many Americans still reeling from the aftermath of the COVID pandemic, ballooning  inflation, promises from the Fed to raise interest rates, and a still developing crisis in Ukraine, threaten to bring things from bad to worse.

This year the Federal Reserve is expected to intervene in ways that aim to dampen inflation, but at what cost? According to Emil Fleysher and several economists, higher interest rates may place significant stress on borrowers in both the private and public sectors, leading to further financial woes for the average working American.

According to Fleysher, the majority of personal bankruptcy cases aren’t the result of reckless spending, but rather the result of (often) unexpected financial hardships caused by unemployment, sudden and intense changes in the job, housing, or stock markets, uninsured medical expenses, and more.

If the past is any indicator of the future. Bankruptcy filings typically peak during economic downturns, with economic policies that are less consumer-friendly driving interest rates, the cost of living, and bankruptcy filings higher.

The Impact of Increased Interest Rates

Rises in interest rates directly impact loan repayment, refinancing terms, and cash flows in a negative way. Such rate hikes are generally followed by greater debt burdens, putting financial pressure on borrowers. As a result, ‘weaker’ borrowers in lower-income brackets tend to get hit the hardest, often unable to meet the growing demands of mounting debt.

While many forecasters expect the Federal Reserve to raise rates in a series of actions throughout 2022 and 2023, Fed Chair Jerome Powell has (so far) declined to give insight into the pace of such rate hikes. This leaves the door wide open for both larger and more rapid increases than perhaps previously expected. 

Impact on Mortgages 

Tightening of monetary policy nearly always means rate increases on new mortgages or existing mortgages with adjustable rates.. This adds to affordability issues with housing, a cooling of the real estate market, and inevitably, those individuals and families that were already on the brink will be the first to be pushed over the edge. Many vulnerable people at the frontline will find themselves unable to meet the growing pressures of rate hikes and cost of living increases and will often find themselves facing eviction, foreclosure, repossession, garnishment, and even homelessness. For those fortunate enough to qualify, Bankruptcy may be the only source of reprieve.

The Ukrainian Crisis 

Russia’s invasion of Ukraine has created financial waves felt throughout the world. From stock markets and oil prices, to causing anxiety and uncertainty around personal finances, people are beginning to feel the economic squeeze at home and at the pump.

Potential Financial Impact For Americans:

• Oil prices surging (the current national average is over $4 per gallon, with some areas experiencing prices as high as $7.50)

• The increased cost of public transportation 

• The increased cost of transporting goods, with expenses passed on to consumers on store shelves both online and in-person

• Stock market and economic downswings, causing significant declines in 401(k) and retirement accounts, forcing many Americans to change their spending, savings, and retirement plans.

Bankruptcy is a Tool to Use, Not a Word to Fear 

Specializing in consumer bankruptcy, debt settlement, mortgage modification, and foreclosure litigation, Attorney Emil Fleysher offers a holistic approach to solving mortgage and debt problems.

With a passion for helping those in need, Fleysher has dedicated his career and law practice to empowering those experiencing financial hardship, helping them take back control of their finances, and taking progressive steps to rebuild their financial future. According to Fleysher, bankruptcy shouldn’t be looked at as a source of shame or failure, but rather as a potential solution to a problem with a very clear and well-established set of rules and parameters. A bankruptcy filing can set the stage for financial rehabilitation and fresh start. Bankruptcy is an ancient concept and has developed over the years in to a well-codified set of laws that function somewhat like a pressure release valve for capitalistic economies (such as ours). When leveraged and executed correctly, Fleysher contends that a bankruptcy filing is likely to yield a net positive for not only the filer, but for those closest to the filer as well. The financial benefits of starting over with a bankruptcy discharge are tangible, but the emotional benefits of unloading the psychological burden and stress that comes with carrying insurmountable debt has an intangible value that should not be underestimated.

About Fleysher Law Bankruptcy & Debt Attorneys

With a practice specializing in Chapter 7 Bankruptcy, Chapter 13 bankruptcy, Foreclosure Defense, and Asset Protection, Emil Fleysher is committed to helping clients break free from the chains of debt, and find the light at the end of the tunnel. Serving clients throughout Florida, Fleysher and his firm take a holistic approach to solving debt and mortgage problems, and offer a compassionate but aggressive approach to achieve positive outcomes.

Those interested in learning more about bankruptcy, their options, or in receiving a free consultation are encouraged to reach out via the firm’s official website or by calling 888-886-0020.

Media Contact
Company Name: Fleysher Law Bankruptcy & Debt Attorneys
Contact Person: Emil Fleysher
Email: Send Email
Phone: 888-565-1223
Address:715 E Hillsboro Blvd #100
City: Deerfield Beach
State: FL 33441
Country: United States
Website: https://fleysherlaw.com/