Dealing With Debt - Modern Banruptcy
In July 2008, The New York Times posted a large interactive chart showing that debt levels in the US have reached more than $100,000 for some consumers. It's hard to decipher who the post was describing. That is, it's unclear whether the chart was talking about the average household, homeowner, or consumer. Regardless, the message is clear- debt levels for many consumers have increased in recent years.
And this isn't the first article by a major site illustrating the mounting consumer debt levels. In fact, you see it all over the news. It's almost like the debt and "negative equity" housing issues are in the papers constantly. Everywhere you look, all you see are headlines about record mortgage defaults, credit card debt, double increases in the number of bankruptcy filings and a seemingly record number of foreclosures. And, given that many adjustable rate mortgages haven't reset yet, this might not be the end of the doom and gloom headlines.
Where did all this come from? What caused all of this? Can anyone give an answer that they are certain of? Well, let's see if we can figure this out. Where do we start?
To begin with, take a look at the evening TV news & watch the commercials. What does the average viewer see advertised? 0% interest credit cards, fancy vacations to 5 star resorts, nice new cars that everyone seems to be driving, giant estates. It's all so tempting, isn't it? I'll say.
It seems like everyone is buying new stuff continually & that money is flowing like water.
But start doing the math.
How can this be?
If the average household makes $45,000 per year, how many people can realistically afford a lifestyle like this? Maybe not as many as we'd like to think. In fact, hardly any when you start calculating the stats.
Sure, there must be people out there who can afford the fancy lifestyles that are advertised on TV and there have to be at least some consumers for whom expenses don't matter. But now that the latest increases in foreclosures and bankruptcy filings are surfacing, it may be that more people went into debt to buy all that stuff & the bills are finally coming due.
As a result, some consumers are facing up to the facts that their debts may be unmanageable & therefore they may be looking into filing bankruptcy in order to get a fresh start. However, in 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) in order to deal with consumers who were allegedly abusing the bankruptcy process.
Were the abuses so real to warrant a major change in the bankruptcy law? Will the BAPCPA have the intended effect of making it more difficult for some consumers to discharge unsecured debts in Chapter 7 proceedings? This remains to be seen. The 2005 changes to the bankruptcy law will undoubtedly be debated for years to come. And many consumers might find themselves forced to file Chapter 13 bankruptcy which generally is more focused on getting debtors to design repayment plans as opposed to discharging unsecured debts.
However, one thing can be said about this situation. If the statistics are real, bankruptcies appear to be on the rise in many states.
This might not be the end of the story either. Many of the "bubble states" which have seen home prices deflate also have seen major increases in the number of bankruptcies filed. Are these correlated? It's possible, isn't it?
And what about the other side of the equation- income losses? If a consumer loses his job, can he service his debt? Bills can quickly add up if expenses aren't adjusted downward.
Whatever the answers are, bankruptcy filings have seemed to increased in 2008 as debt levels have become unrealistic for some consumers....
Related Tags: debt, credit, bankruptcy, bankrupt, discharge, chapter, debtor, chapter7, chapter13
This isn't the end of the story! Visit http://www.bankruptcyaccess.com for more. Our personal bankruptcy news is updated daily. Learn about the latest Chapter 7, Chapter 13, and general bankruptcy developments.
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- Personal Finance & The Needed Momentum
Possession of personal cash flow plan and the dream of having financial freedom might make it harder - Need An Ebt Card Or Food Stamps?
Applying for food stamps can be a very overwhelming and embarrassing task. Knowing what to expect th - Quick Money Loans What You Should Know
If you are looking for a quick money loan there are a few sources available, and just like any other - Same Day Cash Loans - Quick Help When Fiscal Requirements Force You
Life of human being is completely dependent on cash that establishes the life of one comfortable or - Unemployed Loans - Don't Accept Debacle Against Fiscal Requirements
In today's time, what imperative complication is increasing at the rapid pace for people? It is the - Get A Secured Credit Card To Rebuild Your Credit
The recession has spoiled the financial plans of many. Some have maxed their credit cards out, other - Ways To Create Profitable Cfd Trading Strategies
Understanding the connection between 2 significant ratios is the key to having winning CFD trading s - Can I Save Money At An Outlet Store?
Everyone loves to know they are getting a good deal when they are shopping for something. It could b - Used Car Donation Program Worth The Cause?
Used car donation program may not be the best option for many. Before you call me selfish and Paroch - Who Controls A Business's Asset When It Files For Bankruptcy?
Individuals who wake up and find themselves knee deep in debt, with no recourse to repay the debt, h
Most viewed articles in this category:
- Proposed Changes to Bankruptcy Law in Scotland
A bill has been proposed in Holyrood, the Scottish Parliament, which would align Scotland’s ba - How To Create Your Own Emergency Fund
Do unexpected car repairs, quarterly insurance payments or unexpected medical bills find you hard pr - How To Make A Personal Budget
There are many types of budgets that people use in their daily life. For instance, there are budget - Easy Cash Loans To Meet Immediate Cash Need In The Most Convenient Way
A financial crunch can happen to anyone at anytime in life. A few years back, I was stuck in the sam - Credit Counselors Offer Advice to Avoid Debt This Christmas
The holiday season is a great time of year for most of us, but it's also a time of year when we want - Save More/Spend Less - Become a Saver not a Spender
Our personality and lifestyles affects our ability to save. Most every action we take (including tho - Saving Money In College
Have you ever found yourself eating Cheerios for dinner while sitting in your dorm thinking about ho - Seek Unsecured Loans And Avoid The Threat Of Repossession
It is quite natural that people don't want to have the threat of repossession of their property whil - Investing - Tax Shelters Equals Big Fine For KPMG
What happens when a world renowned accounting firm decides to market tax shelters to its elite clien - Teaching Kids to Save--It's More Than Just Numbers
Did you know?<b>• The fastest growing group of bankruptcy filers is those 25 and you