I’ve long said to bankruptcy clients that bankruptcy can’t fix an income problem, it can just ameliorate an outgo problem.
In the last round of frantic bankruptcy filings a decade ago, one symptom seemed to be that too many families in the Silicon Valley couldn’t really afford to live a middle class life here.
They filled the gap between economic realities and their expectations with credit cards until the house of cards came tumbling down.
In bankruptcy, I could provide the tourniquet that staunched the credit card outflow.
This economy is different
Today, it seems the problem of struggling families isn’t just an outgo problem: it’s income based and it’s everywhere, not just California.
A United Way study shows 43% of American households can’t afford a bare bones budget. That’s 51 million households that can’t afford the basics of food, rent, child care, transportation, health care and a cell phone.
Even when unemployment was low, the income generated falls short for a huge swath of our populace. The people the United Way set out to study were those they dubbed ALICE: Asset Limited, Income Constrained, Employed.
What they found calls out for national attention and an economic reordering that keeps all of our families self sufficient. The problem has been further exposed and exacerbated by COVID-19.
My skill-set in bankruptcy is no match for people without enough income to afford their basic needs. Only a national resolve to provide an income sufficient for self sufficiency will suffice.