CARLHAYDEN
Atlas Icon
Posts: 10,638
Political Matrix
E: 1.38, S: -0.51
|
 |
« on: November 07, 2009, 02:15:16 AM » |
|
Personal bankruptcies skyrocket 9% in October
The National Bankruptcy Research Center reported that there were 135,914 bankruptcies in October, up 9%. One third of the bankruptcies were filed under Chapter 13. Chapter 13 requires that the court set up a five year repayment plan for debts owed.
In addition business bankruptcies were up 7% for the same period. The forecast is for 1.4 million bankruptcies in 2009, the highest since 2005. In that year Congress revamped the bankruptcy laws to make it more difficult to wipe out all of a person's debts. There was a rush of filings in the months just before the new law was enacted.
We already know that the main cause of this high bankruptcy rate is unemployment. But there are other factors coming together to force people into bankruptcy. Home prices are falling and many people are 'upside down" in their mortgage. They owe more than their house is worth. Many of these owners also have home equity loans in addition to their mortgages which is putting more pressure on them. Then add to the mix higher interest rates, especially on credit cards and lines of credit being cut and you have a devastating set of circumstances making it all but impossible for some owners to pay their debts.
|
