When are Bankruptcies Necessary?

Bankrupcies May not Always be the Answer 

I feel that I have confession to make to you folks. I'm up to my eyeballs when it comes to debt. It's my own shortcoming and I acknowledge that. For a number of years, I didn't have the cash to buy the things I wanted, so I bought them with plastic.

I didn't know then that my decisions at the time would come back around to haunt me. I owe pretty close to $20,000. When I check my credit I find that my credit score is very high and I am incredibly pleased with that. I live from paycheck to paycheck,  and I find myself not always having the tiniest clue as to  how I will pay my bills each month.

In addition I'll confess that the year I  heard that the laws for bankruptcies would be changing, I considered filing for bankruptcy. I loathed the mere idea of contemplating something that I knew would damage my exceptional credit.

As the cut-off date for filing bankruptcies before the new law went into effect, my husband and I discussed this for days. In the end, we determined not to file. I realized that it was our own negligence that had gotten us into our problems with and I ought to admit responsibility for it.

Aquaintenances of  ours however, chose to file for bankruptcy even though they were only in debt a few thousand dollars. What I thought was extremely infuriating was the fact that just prior to filing for bankruptcy they bought two brand spanking new automobiles and took a cruise. And, since they charged the cruise to their credit cards they didn't pay one thin dime for it. To me, that's the same thing as stealing.

Banruptcies on the Rise

The number of bankruptcies filed in 2005 jumped about 30% as folks stampeded to get their filings done ahead of the new laws going into effect. Personal bankruptcies amounted to nearly 2.1 million across the country. Those statistics show it to be the largest number of bankruptcies filed in any 12 month interval in our history. That's insane.

Let's consider  that for a moment - 2.1 million people found themselves with severe money problems the  year the new law went into effect. Each person who filed has their own reasons, whether it be job loss, credit card debt  or medical bills. The list of reasons for filing bankruptcy goes on for miles.

As a matter of fact, outrageous medical bills are the number one cuase for the high number of bankruptcies. Let's face it, alot of folks do not have sufficient health care. All it takes is for one of us to get hospitalized or ill and all of a sudden we find ouselves in serious debt. That's worse than scary, it's sad.

I recognize the necessity for the new laws, I truly do. That doesn't mean I necessarily agree with them in each case. The rationale behind the laws being changed is for the reason that too many folks were taking advantage of  and/or abusing the then current bankruptcy laws.

They'd run up their credit cards with exotic vacations, new furniture purchases and many possessions they absolutely had no real need for. Then, they'd file for bankruptcy and like magic - their money woes were over.

On the other hand, given that the new bankruptcy laws have gone into effect, the people who face crushing debts that they had no control over are facing more hurdles in order to get a fresh start. Is that fair? Of course not. But, as you know, it only takes a few people to ruin it for everybody else. And lots of people did.

Number One Cause of Bankruptcies

If the number one cause for the onset of bankruptcies is astronomical medical bills, why doesn't our government take a look at dealing with those issues? If credit card companies are griping that they are not getting their money when folks file for bankruptcy, why keep on giving people such a high credit line?

Sure, many bankruptcies could be avoided with some common sense usage, that's for certain. But what about those who really are struggling? Who is looking out for them?

If you are thinking that you may need to file bankruptcy you want to make sure you are getting all the facts. Before filing bankruptcy I suggest visiting the Federal Trade Commission's website on bankruptcies. You'll find the link below.

There you will find info on the bankruptcy laws, bankruptcy counseling, bankruptcy and credit, bankruptcy assets, bankrupcy creditors, bankruptcy debts, what to do after bankruptcy and of course bankruptcy alternatives.

Bankruptcy Alternative

Federal Trade Commission's website on bankruptcies

Back to the Top of Bankruptcies