With the recent outbreak of coronavirus (COVID-19), Americans are worried about the economy and rightly so. Businesses are closing down throughout the nation for an unknown length of time and many will have to choose between risking potential exposure at work or losing their jobs.
One of the biggest issues is that the stock market has plunged and has officially entered into a bear market. This means that securities have fallen 20% or more from recent highs. If a bear market is cyclical, it means that the market will only be down for a few weeks or months. If the bear market is secular it can last for years or even decades.
Why Should Americans Consider Investing In Stocks?
In an article published by the New York Times, it was noted that around 84% of all stocks owned by Americans are owned by individuals in the top 10 wealthiest households. This means that the average person isn’t impacted too severely if the stock market drops. Why should Americans who don’t have any stocks consider buying?
Stocks Can Grow Your Money
Yes, it’s hard to see the value of stocks when all anyone talks about is the losses due to the current economic climate. However, financial advisors tell investors to think about the long term. Often, the stock market recovers quickly and with wise choices, investors are often able to obtain a 7 – 10% growth in their investment. That’s much more than any interest earned in a bank account.
Stocks Are Easy To Invest In
Today, it’s very easy to invest in stocks. You can sign up with an online trading broker or you can even download an app like Stash and begin making purchases. Investors don’t been thousands of dollars to make a purchase, many platforms allow a purchase of any dollar amount. You can get started with just a few dollars!
Stocks Are Relatively Easy To Turn Into Cash
There is a reason that stocks are called “liquid assets”. Stocks can be sold fairly quickly and literally turned into cash.
There are certain types of accounts that the government does not tax, which means that any profits you make are tax-free!
What Happens To My Stocks If I Declare Bankruptcy?
The answer to this question depends on the type of Bankruptcy that you declare.
Chapter 7 Bankruptcy & Stocks
Under Chapter 7 bankruptcy, all of your assets are sold and then the profits are divided among creditors. The assets that are sold depend upon the debt that is owed, which means that some assets could be kept, including stocks.
Chapter 13 Bankruptcy & Stocks
When you declare Chapter 13 bankruptcy, a trustee will be appointed to create an interest-free repayment program. This means that you could potentially keep some of your assets, which include stocks. As long as you are keeping up with your repayment plan, you won’t have to sell the assets you’ve been allowed to retain.
When Should I Consider Filing For Bankruptcy?
If you’ve been struggling and are now concerned that the current economic climate will impact your finances further, you might be wondering if you should consider filing for bankruptcy.
The reality is that this is a very personal decision and a very difficult decision to make. Many individuals and families procrastinate, knowing that ultimately they will have to file for bankruptcy but not taking the steps to being the process. There are consequences that can be associated with waiting too long to declare bankruptcy. For example, many who wait to file face debt-collection lawsuits.
Here are a few examples of factors that might mean you should consider filing for bankruptcy:
- Your total debt is 40% or more of your total income.
- You are creating new debt in order to pay for old debt.
- You and your loved ones are going without essentials like food and medical care because of your debt.
If you’d like to learn more about your options, call today.