Bankruptcy filings surge 29%

[CompTweaker]

http://biz.yahoo.com/cnnm/080827/082708_bankruptcy.html

As things in the economy have gotten worse, the number of people and businesses heading to bankruptcy court has spiked.
Bankruptcy filings surged 29% in the 12 months that ended June 30, according to government figures released Wednesday.

Total filings rose to 967,831 from 751,056 a year earlier.

Business filings jumped more than 41% to 33,822 from 23,889 in the year-ago period. Personal filings totaled 934,009, up 28% from last year.

"As we continue to hear more bad economic news, we will continue to see bankruptcies spiral upwards," said Jack Williams, resident scholar at the American Bankruptcy Institute.

The bankruptcy group expects filings to reach 1.2 million this year, as problems in the housing market have "reverberated throughout the economy," he added.

The data also showed that filings for Chapter 7 rose 36% to 615,748 in the 12 months that ended June 30.

Chapter 7 bankruptcy is designed to give individual debtors a "fresh start" by discharging many of their debts. Under Chapter 7 a filer's assets minus those exempted by his home state are liquidated and given to creditors first in line for repayment, while the rest of his debts are cancelled.

Another type of individual bankruptcy - Chapter 13 - requires debtors to pay back their debts over time. Total Chapter 13 filings rose 17% to 344,421 from 294,693 a year earlier.

Filings for Chapter 11 bankruptcy, which is aimed at assisting struggling corporations or partnerships, rose more than 30% to 7,293.

2005 law cracked down on filers

The increase comes near the third-year anniversary of a congressional crackdown on filers of chapter 7 bankruptcy.

The Bankruptcy Abuse Prevention and Consumer Protection Act, which made it harder for individuals to receive Chapter 7 bankruptcy protection, went into effect in late 2005. Huge numbers of people before the deadline and then filings dropped off dramatically in 2006-07.

Lawmakers who voted in favor of the law included Sen. John McCain, R-Ariz., the Republican presidential candidate, and Sen. Joe Biden, D-Del., the Democrats' vice presidential pick.

Democratic presidential candidate Sen. Barack Obama, D-Ill., voted against the act.

Recently, Obama has proposed to fast-track bankruptcy proceedings for military families and help seniors facing bankruptcy keep their home.

Proponents of the law argued that it would prevent consumers from using bankruptcy laws to clear debts that they actually have the ability to repay. Consumer advocates decried it as a boon to creditors - particularly credit card companies - that lose money when debtors declare Chapter 7 bankruptcy.

Williams said that Chapter 7 filings are starting to return to levels last seen before the 2005 law, which suggests that the decrease following its enactment "may have been an illusion."

[Cali]

I read that earlier, I was shocked to see 1.2 mil by end of the year. WOW

[JRScott]

I suspect a high bankruptcy rate will continue through 2010 at least. I suspect as the 'housing crisis' settles down more and more people will find they can't pay for the 'plastic' leading to more and more bankruptcies as they no longer can tap equity loans.

[magyar123]

The George Bush screw the people law of 2005 has done little or no good except to stomp on the unfortunate, which is what he does best. Don't be afraid of it. FILE 7 and take control of your life today.

Filing 7s have been made harder since the 2005 Bushleague laws. More and more people are being sentenced into 13s.
Won't change if McCain is elected.

[JRScott]

Filing 7s have been made harder since the 2005 Bushleague laws. More and more people are being sentenced into 13s.
Won't change if McCain is elected.

Won't change if Obama is elected either, at least not in his first term it is to low priority.

[WhatMoney]

Originally Posted by JRScott
Won't change if Obama is elected either, at least not in his first term it is to low priority.

And you say this based on what inside information you have about the Obama platform? Where are your references? Oh this is just your opinion again? You are welcome to your opinion, but you should state it as such. We all know you love to attack Obama every chance you get - but why make up things you know nothing about? He's mentioned BK reform in many speeches including his nomination acceptance speech. - unlike McCain who voted for the present BK law and has no intention of reforming anything.

From another thread http://www.bkforum.com/showthread.php?t=26021

http://news.yahoo.com/s/ap/20080708/...UuKVPuw4Os0NUE

(Reuters) Democratic presidential candidate Barack Obama proposed overhauling bankruptcy laws on Tuesday to ease the impact on people unable to pay their bills because of medical expenses or military service.

Obama, an Illinois senator, took aim at a 2005 overhaul of bankruptcy laws, which was strongly supported by credit card companies and other consumer lenders, that made it tougher for people facing personal bankruptcy to discharge debt.

"I'll reform our bankruptcy laws to give Americans who find themselves trapped in debt a second chance," Obama said at a town hall event in Powder Springs, Georgia, outside of Atlanta.

"While Americans should pay what they owe and we should be fair to those creditors who were fair to their borrowers, we also have to do more for the struggling families who need help the most," he added.

The 2005 bankruptcy law was passed by a Republican-led Congress and signed by President George W. Bush.

Obama and Republican John McCain, who will face each other in the November election, have been squaring off this week over the economy as they court voters who are increasingly anxious over soaring energy costs and a deteriorating job market.

SEEKING TO LINK MCCAIN TO BUSH ON ECONOMY

Obama has sought to link McCain, an Arizona senator, to Bush's policies on the economy, which the Democratic candidate contends have favored the wealthy and left the middle class struggling.

He accused McCain of having "sided with the big banks" to support the rewrite of the bankruptcy laws.

Obama said about half of all personal bankruptcies result in part from the burden of high medical expenses.

He said he would change the law so that Americans who can prove their bankruptcies resulted from high medical costs could get some relief from their debts.
Obama would also create a "fast-track" bankruptcy process for people serving in the military and their families who get behind on expenses because of long deployments, repeated moves and predatory lenders.

"If you're serving our country, you should be protected no matter where you live," Obama said.

In addition, he would make it easier for people over 62 to keep their homes if they are facing bankruptcy and give some relief to people burdened by bills because of a natural disaster.

Amid worries the U.S. economy may be sinking into a recession, personal bankruptcy filings are on the rise.

Such filings jumped 30 percent in the first six months of this year compared to the same period in 2007, according to the American Bankruptcy Institute, a research organization.

Rising mortgage costs in a slumping housing market and high levels of other household debt led to the jump in bankruptcy filings, the institute said.

By Caren Bohan
Tue Jul 8, 11:18 AM ET

http://news.yahoo.com/s/nm/20080708/...WjjgDQKJ0b.3QA

[slam22]

And you say this based on what inside information you have about the Obama platform? Where are your references? Oh this is just your opinion again? You are welcome to your opinion, but you should state it as such. We all know you love to attack Obama every chance you get - but why make up things you know nothing about? He's mentioned BK reform in many speeches including his nomination acceptance speech. - unlike McCain who voted for the present BK law and has no intention of reforming anything.

Let's not forget that Sen. Biden (aka Sen. MBNA) was instrumental in getting the 2005 law passed. His pockets were lined with MBNA money so I wouldn't get too excited about any major changes coming down the pike. Don't get me wrong, I'm not a big fan of Sen. McCain or Sen. Obama. Both Republicans and Democrats have shown themselves to be equally inept and not interested at all in helping anyone other than their own special interests.

[AngelinaCatHub]

As far as I'm concerned, I would be pleased to vote for Sarah Palin for pres. She seems to have it together over all concerned. 'Hub

[JRScott]

And you say this based on what inside information you have about the Obama platform? Where are your references? Oh this is just your opinion again? You are welcome to your opinion, but you should state it as such. We all know you love to attack Obama every chance you get - but why make up things you know nothing about? He's mentioned BK reform in many speeches including his nomination acceptance speech. - unlike McCain who voted for the present BK law and has no intention of reforming anything.

From another thread http://www.bkforum.com/showthread.php?t=26021

http://news.yahoo.com/s/ap/20080708/...UuKVPuw4Os0NUE

(Reuters) Democratic presidential candidate Barack Obama proposed overhauling bankruptcy laws on Tuesday to ease the impact on people unable to pay their bills because of medical expenses or military service.

Obama, an Illinois senator, took aim at a 2005 overhaul of bankruptcy laws, which was strongly supported by credit card companies and other consumer lenders, that made it tougher for people facing personal bankruptcy to discharge debt.

"I'll reform our bankruptcy laws to give Americans who find themselves trapped in debt a second chance," Obama said at a town hall event in Powder Springs, Georgia, outside of Atlanta.

"While Americans should pay what they owe and we should be fair to those creditors who were fair to their borrowers, we also have to do more for the struggling families who need help the most," he added.

The 2005 bankruptcy law was passed by a Republican-led Congress and signed by President George W. Bush.

Obama and Republican John McCain, who will face each other in the November election, have been squaring off this week over the economy as they court voters who are increasingly anxious over soaring energy costs and a deteriorating job market.

SEEKING TO LINK MCCAIN TO BUSH ON ECONOMY

Obama has sought to link McCain, an Arizona senator, to Bush's policies on the economy, which the Democratic candidate contends have favored the wealthy and left the middle class struggling.

He accused McCain of having "sided with the big banks" to support the rewrite of the bankruptcy laws.

Obama said about half of all personal bankruptcies result in part from the burden of high medical expenses.

He said he would change the law so that Americans who can prove their bankruptcies resulted from high medical costs could get some relief from their debts.
Obama would also create a "fast-track" bankruptcy process for people serving in the military and their families who get behind on expenses because of long deployments, repeated moves and predatory lenders.

"If you're serving our country, you should be protected no matter where you live," Obama said.

In addition, he would make it easier for people over 62 to keep their homes if they are facing bankruptcy and give some relief to people burdened by bills because of a natural disaster.

Amid worries the U.S. economy may be sinking into a recession, personal bankruptcy filings are on the rise.

Such filings jumped 30 percent in the first six months of this year compared to the same period in 2007, according to the American Bankruptcy Institute, a research organization.

Rising mortgage costs in a slumping housing market and high levels of other household debt led to the jump in bankruptcy filings, the institute said.

By Caren Bohan
Tue Jul 8, 11:18 AM ET
http://news.yahoo.com/s/nm/20080708/...WjjgDQKJ0b.3QA

As Slam said Sen. Biden helped write the 2005 bankruptcy law, as Vice President he would sit in on the Congress and to some effect control what is done.

Obama and McCain's campaigns both have promised things that they realistically cannot and will not deliver upon.

If Obama was all fired up about changing things he would have spent more than 1/3rd of his time on the job.....

[WhatMoney]

As far as I'm concerned, I would be pleased to vote for Sarah Palin for pres. She seems to have it together over all concerned. 'Hub

I don't think anyone knows what Palin's positions are on much of anything yet (she's been muzzled until she finishes her crash course in national policy) - except for her ultra conservative social views and the drilling for more oil in Alaska (which she supports because of the increased taxes she could collect for her state from the oil companies.) She does oppose declaring the polar bear endangered, and supports the shooting of wolves from helicoptors, to keep the moose population up so the "sport" hunters can all shoot a moose before they go home. And the teaching of creationism in public schools - guess she doesn't believe in science either. Sounds like a female Bush to me. More of the same with a whiny voice.

Joe Biden supported MBNA because they were the largest employer in his state. And MBNA was the largest financial donor to the Bush campaign. Every Congressional senator looks out for his states' interest, that's why he has been reelected for the last 35 years. I hope his loyalties are more national if he is VP, but of course he's a rat for being in MBNA's pocket.

[Minnymouth]

Don't you just LOVE POLITICS..... everybody has a different opinion!

Just like religion............. to each their own!!!

[JRScott]

I don't think anyone knows what Palin's positions are on much of anything yet (she's been muzzled until she finishes her crash course in national policy) - except for her ultra conservative social views and the drilling for more oil in Alaska (which she supports because of the increased taxes she could collect for her state from the oil companies.) She does oppose declaring the polar bear endangered, and supports the shooting of wolves from helicoptors, to keep the moose population up so the "sport" hunters can all shoot a moose before they go home. And the teaching of creationism in public schools - guess she doesn't believe in science either. Sounds like a female Bush to me. More of the same with a whiny voice.

Joe Biden supported MBNA because they were the largest employer in his state. And MBNA was the largest financial donor to the Bush campaign. Every Congressional senator looks out for his states' interest, that's why he has been reelected for the last 35 years. I hope his loyalties are more national if he is VP, but of course he's a rat for being in MBNA's pocket.

Joe Biden supported them because they were the major contributor to his reelection campaign. The Democrats are no less beholden to big business than the Republicans. That's why nothing really gets done to help the folks.

Palin at least has a record as a reformer. A proven record in the public eye. She's challenged corrupt members of her own party. Something we can't really say for McCain, Obama or Biden.

[AngelinaCatHub]

I like Palin as she speaks from the heart, not the speech. Honesty abounds with her, a miserable and notable lack of, with most politicians. I consider her a statesman (stateswoman until defined). Both parties have allowed Freddiemack Fanniemay bad practices to endure and next they will be breaching Social Security to bail out some other “F” up. O.K. someone said, politics and religion, not good to speak of, I agree. ‘Hub