In the New York Times it was reported by Duff Wilson on Friday, April 20th, 2010 that there was a "Sharp Increase in Personal Bankruptcies" in March.
They seemed to be surprised. Why?
This is the perfect storm - high unemployment, real estate bubble bursts, banks out for every dime they can squeeze, medical bills soaring - what did they think would happen?
158,000 bankruptcy fillings in March
6,900 a day
35% increase from February 2010
Chapter 7's have increased to 73% from 62% a few years ago, signaling that people are in even worse financial shape than ever. They cant even qualify for Chapter 13 Bankruptcy despite the government's attempts to hurt EVERYONE possible into a 13!
The big problem: Joblessness
Even if people get back to work, they used credit cards to pay for living expenses during their unemployment - credit card debt that history shows they will never be able to pay back. Most cards run interest at 29% plus "fees".
The next wave of bankruptcy is coming soon.
The impact will be greater. "Fewer people are trying to same their homes" said University of Iowa law professor and bankruptcy expert Katherine M. Porter. "They realize their payments are not affordable" and just cannot make the payments.
Regardless of what the public might think, bankruptcy cannot lower the 1st Mortgage Payments.
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