850,912 – That’s the number of personal and business bankruptcy filings in 2007. When put in context of a nation of 300 million people operating thousands of businesses, that might not seem like a large number. But, when measured versus 2006, that is a 38% increase. I find this very interesting because wasn’t it not too long ago that the Feds enacted some bankruptcy reform legislation which was intended to stem the tidal wave of mainly personal bankruptcy filings in the USA?
We’ve heard this story before from the Federal government regarding the alarming rise in consumer bankruptcy filings and the need to legislate a way out of it. Late in 2005 they did legislate their way out of it with the . In all fairness the bankruptcy filing rate did decline following this legislation from previous years, but primarily due to the rush in filing the 2005 law change incited. However, probably just about the time the Feds were conjuring up this new bankruptcy reform legislation, did you notice how hot the housing market was in the USA? It was smoking hot around that time. Rates were low, inventories were high, sellers were selling and the buyer’s buying. But the Feds were making it more difficult for the American consumer to file bankruptcy. I’ve read that some in the Congress today are considering pushing more bankruptcy reform legislation to help with the current sub-prime crisis. I find that very interesting.
The housing market is not so hot these days. Bankruptcy filing rates are predicted to rise by staggering rates the next year or so. Foreclosures are at all time highs. Ordinary folks cannot keep up with their mortgage payments and even worse, many properties are losing value. People’s equity in their homes is less than what is owed on their loans these days. That is not a good situation to be in. Those consumers who were duped into loans too large for their budget have every right to be livid with both the greed driven lenders who perpetrated these shams, and the government for being too lax on the regulations. People, many people, have and are going to continue to lose their homes because of this crisis. The bottom line is, the economic situation is grim and bankruptcy is an option for many people to help with tough times. Before the Feds make it more difficult for you to file, consider speaking with an attorney today.