With the unemployment rate steadily rising and more and more people losing their homes and savings, it’s no surprise that bankruptcy is also on the rise. The numbers, however, are still a bit shocking. More than 1.5 million people filed for bankruptcy in the U.S. in 2010, a nine percent increase from 2009.
The increase in bankruptcies is proof that we are still struggling through the recession and that many families could no longer see a light at the end. The trend doesn’t seem to be slowing either, as American Bankruptcy Institute Executive Director Samuel Gerdano stated that they “expect that consumer filings will continue to rise in 2011.”
Bankruptcies have been steadily rising since 2005, when the Bankruptcy laws were revamped. It’s also no coincidence that the U.S. officially declared itself in a recession in December of 2007. Many people who would never have thought they would file for bankruptcy or lose their jobs are now turning to filing for some financial relief.
There have been very few people not affected by this recession, as the domino effect has begun. Many middle-aged families are supporting not only themselves but sometimes their children who would otherwise be employable. Also, with many companies cutting pensions, some families are now supporting their parents as well. With all the financial pressure, one lost job can send a whole family spiraling.
This was the exact case that Ed Soapes experienced when he lost his job in February of 2010. He was supporting three children-one unemployed, one in college and one that was disabled-as well as his mother. His daughter’s disability benefits were the Soapes family’s only of income and finally by September, Soapes couldn’t make ends meet anymore. He filed in September of 2010, just seven months after losing his job with $150,000 in debts, including a mortgage that he promised to continue to pay to keep his house.
In the past three years almost 4 million consumer bankruptcy filings have been recorded. While the majority of these debtors do not have their college degree and earn less than $30,000 a year, according to the Institute for Financial Literacy, there is a growing minority of middle-class families filing. These families have their college degrees or make more than $60,000 a year.
Luckily, the stigma associated with bankruptcy is almost completely gone and most people can see it as a tool to help them, not an escape. If you’ve been considering filing for bankruptcy and would like more information, please contact an experienced Waco and Killeen bankruptcy attorney to learn about your options.
Jeff Davis is the Owner of the Davis law firm and a highly experienced Waco and Killeen bankruptcy attorney. To find out more information about a Waco or Killeen bankruptcy lawyer, please visit www.jeffdavislawfirm.com.