Posted on 04/17/2007 7:51:56 AM PDT by sportutegrl
Experts are not sure of the exact cause for the sharp dip. U.S. rules that took effect in 2006 made it harder to declare bankruptcy.
Bankruptcy filings plunged 70 percent last year after changes to federal rules made it more expensive and burdensome to file for protection from creditors. The Administrative Office of the United States Courts reported yesterday that federal bankruptcy cases fell to 617,600 last year from 2.1 million in 2005, when debtors rushed to file under the old rules.
Last year's filings were even 62 percent below the nationwide average for 2002 through 2004.
Experts said it was not completely clear why bankruptcy filings had dropped off so sharply.
(Excerpt) Read more at philly.com ...
This statistic probably has more to do with how difficult the Congress made it for filing bankruptcy with the new laws drafted by their credit card company lobbyists.
The credit card issuer’s bailout bill has a lot to do with it. If you can’t shed most of your debt, there’s no point in filing.
It doesn’t mean most of the folks who would have filed are actually paying their credit card bills.
Average for 2002-2004 was 1.6M (617k / .38). So, 2005 was 500k above average, probably due to people rushing to file before the law change. If those people would normally have filed in 2006, 2006 would be 1.1M, still 30% below average (probably due to change in law making it harder to file, and also possibly just different points in the economic cycle).
I am a lawyer, and the bankruptcy bill targets only the people in the upper one-half of any given state’s income brackets. In other words, the Republican base. If you’ve had some success in life, God forbid your child gets sick and needs some medical treatment your insurance won’t pay for. It wouldn’t be such a bad bill if it didn’t lump in medical bankruptcies with folks who have 10 credit cards. But it doesn’t so distinguish, and it targets only the folks with some money, so it’s a very bad bill.
Yep. It certainly is good news for responsible people who pay their bills. Hopefully, it means we will pay a little less in order to cover the debt the irresponsible bums walked away from.
Don’t bet on it.
bttt
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