Bankruptcy on the Rise – Why You Need the Hard Truth
Bankruptcy Filings are Way Up Across the Board
In case you were wondering why you should be reading the hard truth on money and personal finance from Mr. ToughMoneyLove, you need only soak in the sobering news released today about U.S. bankruptcy filings:
Total filings rose to 967,831 from 751,056 for the period ending 6/30/1008, a 29% increase.
Chapter 7 filings rose 36% to 615,748. (Chapter 7 is for individuals who are liquidating their assets.)
Chapter 13 filings rose 17% to 344,421 (Chapter 13 is for individuals who are on re-payment plans)
Businesses fared no better as Chapter 11 filings rose more than 30% to 7,293
Bankruptcy Reform Was No Deterrent
Keep in mind that these huge jumps came even after the bankruptcy laws were substantially amended in 2005 to make it harder for individuals to liquidate under Chapter 7. Candidates McCain and Biden supported this change in the law. Candidate Obama opposed it. I suppose this doesn’t really matter because the change in the law clearly didn’t have its intended effect. This proves once again that politicians know little or nothing about economics.
Folks, these numbers are shocking, sad, and pathetic, all at the same time. Now more than ever, we need to pay more attention to doing the right things with our money and our financial planning. You can start with watching out for warning signs of a normal financial life.