Around the nation, consumer bankruptcy lawyers are sitting on the sidelines and rubbing their hands together, anticipating a long line of potential clients who will pound down the door for their services.
And to some extent, they’re right – with the economy tanking big time and people getting kicked out of their homes and jobs at record numbers, it’s a sure bet that a lot of people will fall down the rabbit hole to the bankruptcy court.
At least, for now.
But think for a minute – a good number of your potential clients need to pay you for your services. In fact, if you have a profit motivation then pretty much all of them need to pay you. But what happens when record numbers of Americans no longer have the ability to scrape together the fees needed for a Chapter 7 bankruptcy case? What happens when the unemployment rate goes high enough to impact the number of people who might otherwise qualify for Chapter 13 but for the fact that they have no regular income?
In addition, remember that lots of people who file for bankruptcy do so because their credit cards, home loans and car loans have gotten away from them. When the economy goes down the drain those people buy fewer homes, fewer cars and ring up the credit cards less often. The “keeping up with the Joneses” mentality swings both ways, folks – if the neighbors are going to spend the summer hanging out in the backyard drinking domestic beer rather than jetting off the Europe to sample fine lagers, so will you.
So here’s the deal – don’t get so giddy that you lose sight of the fact that this gravy train is a short one. It’s just like 2005 when a bazillion people (give or take) filed for bankruptcy. You thought the world was wonderful, went out and hired staff members and bought cars and boats. Laughed at the piles of cash accumulating in your bank account and renovated the kitchen in your house.
Then came 2006. And 2007. And part of 2008. Remember those lean times, when you pulled up BestCase and started working on your own Chapter 7 petition?
Make today the day you look around, start spending smart rather than big, and look for every possible inefficiency. Pretend that the clients are all going to disappear tomorrow and figure out how to pay the bills and all those staffers.
Make a plan, take action, and make hay while the sun shines. Winter’s going to be cold and long.
Good tip – as Tiger Woods knows, your world can come crashing down anytime – nothing lasts forever!
Jay – great article as always. Best, JMB