The emerging trend, according to a recent CNN Money article
, is that the economy has tanked to the point people can't even afford to file for bankruptcy.
Probably true, based on the experience of this law firm
. When the crash hit in 2007, the biggest problem was the wave of toxic mortgages re-setting to interest rates, and consequently payments, that shot to absurd amounts. Home owners couldn't make the payments, so bankruptcy
was one way to eliminate the debt and stop the foreclosure
long enough to get out of the house and not have to abandon your toothbrush and Fido. This event, in turn, triggered the economic down-turn, the lay-offs and decline in income that bring us to where we are today.
The 2005 "reform" of bankruptcy law
has compounded the problem for debtors by requiring more paperwork and thereby increasing costs. Among the most ludicrous requirements is pre-filing debt counseling. Bankruptcy is the last thing debtors want to do. If debt management re-payment plans were a solution, they would be doing them.