Posted on 08/18/2010 10:28:42 AM PDT by Nachum
U.S. bankruptcy filings have reached the highest level since 2005, government data released on Tuesday show, as the economy slows and the unemployment rate hovers just below double digits. There were 422,061 bankruptcy filings between April and June, according to the Administrative Office of the U.S. Courts, up 9 percent from 388,148 in the prior three-month period, and up 11 percent from 381,073 a year earlier.
(Excerpt) Read more at cnbc.com ...
The list, ping
What happened? I know the economy has put people out of work, etc. But I thought the overhaul of bankruptcy laws a few years ago made it much tougher to file bankruptcy.
Or, did lots of people run up credit card debt over the years and THEN got laid off and couldn’t pay??????
We need financial education in this country. There should be required courses in school about consumer finance, how credit cards work, how mortgages work, how to balance a checkbook, etc. I’ve heard so many people complain that they bounced a check because of a bank error, and if you ask, many say they never balance their checkbook. So how many are bank errors and how many are due to their own carelessness?
Kudlow is cursing as he hits the snooze alarm for his next “green shoots” editorial.
Yep. Paying for food.
There would be even more if it wasn’t so expensive to hire a bankruptcy attorney. They only take cash.
We should start with the politicians.
The overhall only affected 10-5% of filings.
The IRS puts out a updated list of ALLOWED expenses every quarter or so and and it depends on your number of dependents.
Bankruptcys are being used to save homes by removing second mortgages and removing credit card debt. In addition you can appraise your vehicle and only pay the secured portion.
there is a 30 minute class you take before you file bankruptcy. (can’t file without it) and a second class during the bankruptcy to recieve your final discharge.
Did you think a credit card would be acceptable?
I work for a BK attorney. Yes, it is much harder to file for bankruptcy now. However, from my experience the people that have been filing in the past are not the same type of people filing today.
It is heart breaking. These people today come in devastated. Many are Executives that had savings, retirement, little or low debt, equity in their homes and good solid jobs. However, they lost their jobs, first used their savings to get by in hopes of landing a new job, then used their retirement (which one should NEVER do as it is protected in BK), then they used credit cards to cover bills, food etc... all while hoping to find a new job.
What I have seen is that these people do find new employment but most of the time they are w/o jobs for 6 to 12 months and then they accept something that pays 50% less than what they were making before. They see bankruptcy as a way of accepting this new normal, new income and trying to live within their means.
It is really sad, the people we see now aren’t the irresponsible bunch that we used to see all the time. They did things right and now they have nothing to show for it. Maybe they now have no debt, but they also don’t have any savings, no retirement, no equity in their homes, and in most cases they don’t own a home anymore. They are also starting over in their careers in mid-life.
My advice to everyone: if you find yourself facing a possible bankruptcy, NEVER, NEVER use your retirement money. It is protected, as is a certain amount of equity in a home.
except for FL where it is 100% of your home in 1/2 acre in a city and 120 acres in a non incorporated area. (provided you have the house for six months and live in fl for two years)
Yep, each state has different expemptions on certain things. Most follow the Federal exemptions and then add a few of their own. Some scale it to the cost of living (ex- CO allows $60k in equity and Mass allows $120k).
My point is that it is sad that most people don’t realize and know that their retirement is exempt up to $1 million. I also think we should be careful before we start to paint all these new BKs as irresponsible citizens. That really isn’t the case now a days.
Honestly, it is disheartening to hear the stories I hear. People who did do the right thing and still ended up in the same place as someone who was irresponsible. It just isn’t fair but it is a reality today.
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