The American economy travels on a varying road that is sometimes prosperous and sometimes struggling. Politicians from New York and from the other 49 states often debate the best ways to improve bad financial times and how to sustain periods of economic growth. However, while a focus on national economic events is important for the country as a whole, wide scale financial occurrences can have direct impacts on individual citizens.
According to the Economic Policy Institute’s report on economic scarring, many people view recessions and other periods of widespread economic decline as finite events. In other words, those individuals view a struggling economy as something that will end and eventually change. While this is generally true on a national level, the byproducts of those recessions can have lasting effects on personal financial health.
For example, when the economy is bad many people put off plans that cost money. Starting college, paying into investment accounts and starting new businesses all are generally put on hold when it seems as though financial uncertainty is at hand. However, many people who put off costly but wise investments in themselves and their futures sometimes fail to ever get their careers, businesses and investments going. They therefore financially struggle long into the future and cannot overcome their hardships.
The term “economic scarring” is a term used by the Economic Policy Institute to describe the lingering effects that recessions often leave on individuals. Even though national conditions may improve, people still carry with them the burdens of previous tough times. The inability to overcome such remaining conditions can force individuals into considering personal bankruptcy.
Personal or consumer bankruptcy is a legal option for people who cannot get out from under their heavy financial burdens. Depending upon the form of bankruptcy a person chooses to pursue, that individual may be able to pay off or liquidate the person’s outstanding debts and begin the person’s financial life over on solid footing. Regardless of what the national economy may be doing, individuals can always take control of their financial futures and pursue consumer bankruptcy to bring about change in their lives.