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Interesting chart of personal bankruptcies
Topic Started: Apr 5 2011, 11:28 AM (233 Views)
jon-nyc
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Note the spike when they changed the law in late 05.

Posted Image


Also, on the yet-more-good-economic-news front, bankruptcies are down 6% yoy.
In my defense, I was left unsupervised.
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jon-nyc
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By the way, my high school best friend was among those complete idiots that filed in early 2006. I practically begged him to file in late 05, but - like an addict that was unwilling to quit using - he couldn't imagine shutting himself off from future credit like that. (his excuse at the time: 'my appliances are 10 years old and soon I may have to replace them') I told him he already *was* bankrupt, he just hasn't filed yet. A few months later I gave him the $300 he didn't have to retain a bankruptcy attorney. His wife, whom he's since divorced, paid me back a couple of years later.
In my defense, I was left unsupervised.
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The 89th Key
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What law was changed? Why was he an idiot to file in early 2006 instead of another time?
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jon-nyc
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It was relatively easy to erase all your debts before then. Now they basically figure out how much you can possibly pay and lower your debt to that amount. (layman's explanation, obviously)

People who were on the verge rushed to file before the new law changed. I tried to get my friend to do that. He still lives hand to mouth and probably will for the rest of his days.
In my defense, I was left unsupervised.
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The 89th Key
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Oh wow
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Kincaid
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HOLY CARP!!!
I have a friend and his wife that were doing okay until Medical problems hit both of them in 2007 and they had to file.

No fun for them. They slowly went from living quite well off the proceeds of an inheritance (allowing them to get into a nice house and pick up some nice cars) to driving old POS cars and living very, very much on a shoestring.

Interesting chart that we are almost back up to where we were. Although I suspect the overall population is slightly more, and economic times are worse these days, if you have to file you have to file. What else you going to do?
Kincaid - disgusted Republican Partisan since 2006.
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Klaus
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HOLY CARP!!!
What was the motivation for changing the law in '05?

To me a bankruptcy law that allows people to get rid of their debts after some time makes more sense to me. Not so much because people get a new chance - that's a nice side effect - but because it means that debtors will not so easily lend money. The US has a big problem with personal debts anyway, and this law change sounds as if it would make matters worse, no?
Trifonov Fleisher Klaus Sokolov Zimmerman
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jon-nyc
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Klaus
Apr 5 2011, 11:14 PM
What was the motivation for changing the law in '05?
Bank lobbying, really.
In my defense, I was left unsupervised.
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John D'Oh
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MAMIL
...because we wouldn't want the banks to suffer too much, would we?
What do you mean "we", have you got a mouse in your pocket?
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The 89th Key
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Interesting that the 2Q each year seems to be the peak.
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jon-nyc
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Yeah, I wonder why that is.
In my defense, I was left unsupervised.
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John D'Oh
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There's nothing quite like getting a big tax bill when you're up to your ears in debt.
What do you mean "we", have you got a mouse in your pocket?
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big al
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Bull-Carp
Astute analysis, John.

Big Al
Location: Western PA

"jesu, der simcha fun der man's farlangen."
-bachophile
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jon-nyc
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John D'Oh
Apr 6 2011, 07:02 AM
There's nothing quite like getting a big tax bill when you're up to your ears in debt.
That was my first thought, but then non-business bankruptcies I figured are mostly wage earners who have taxes withheld.

But then even owing a little to the IRS could be the straw that breaks the camel's bank.
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jon-nyc
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Mystery solved. It is tax related, but not how we were thinking.

From a finance blog I follow (Credit Slips)

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Moreover, bankruptcy filing rates display high levels of seasonality, with February, March, and April always seeing the highest filing rates as debtors use tax refunds to pay attorneys and court fees.
In my defense, I was left unsupervised.
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