Bankruptcy Data Shows Consumer Debt is Still a Problem
The new bankruptcy laws were supposed
to help lower bankruptcy rates and bring bankruptcy data to a
lower level. In the time since the new laws went into
effect, though, the bankruptcy data has shown a climb in
filings instead of a decline overall.
The Trends
The trends shown in bankruptcy data show that from 1999 to
2000 the bankruptcy rates did fall, however, they saw a quick
jump back up again. The filings for 1999 were at
1,319,465 and in 2000 they were at 1,253,444. In 2001 the
rates jumped to 1,492,129 and have continued to go up steadily
every year until the new laws went into effect in 2005 when the
rates were at an all time high just before the passing of the
new laws at 2,078,415. The rates went down in 2006 and
2007 at 590,676 and 826,914, respectively.
This drop in filings, though, was short lived and the
expected bankruptcy filing rate for 2008 is estimated to be
between 1,049,000 - 1,080,000.
What is the Reason
The increase in bankruptcy filings shown in the data for
2008 is likely due to the fact that the economy is in deep
trouble. The harsher bankruptcy laws are not stopping
people because they are in serious financial trouble.
These new laws were to stop frivolous bankruptcy filings and
with the economy in a state as bad as it is now, people no
longer just want to file bankruptcy they have to file.
What the Future Holds
Bankruptcy data does not look too hopefully for the
future. If the economy continues on this downward spiral
then the bankruptcy data will reflect that with more filings
every year. The only hope is a rebound in the economy and
that is a far off thing no matter what.
Filing bankruptcy is seen as a last resort. It comes
with many consequences and hardships. However, with so
many people losing their homes and having trouble even
affording to put gas in their vehicles, filing bankruptcy is
often the only answer. As the average American continues
to struggle the need for filing bankruptcy becomes the only
option.
Bankruptcy data is sure to reflect the hardships of the
average American because it is usually the average or middle
class working person who is filing bankruptcy.
Additionally, even businesses are seeing hard times right now
and there has been an increase in business bankruptcy filings
as well.
The future does not look too bright if something doesn't
change. Bankruptcy data is a true way to see just how
much trouble the average American is having making ends
meet.
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