What is it about our modern economy that has so many people filing bankruptcy? Has it just become the "in" thing to do? Or is there something else happening behind the scenes to sink so many people into the bankruptcy hole?
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The rate of those using a bankruptcy filing went up 8.1% from 2009 to 2010. This sounds like a big increase until you realize it is actually down from a 31.9% increase that occurred from 2008 to 2009. These figures come straight from the U.S. bankruptcy courts, which is the authority in charge of collecting data on the number of filings, discharges and pending cases.
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What this shows is the drastic rise in bankruptcy filings in recent years with the hint of relief coming right now. Filings were still on the rise in 2010, but the increase was much less dramatic than in previous years.
With increases nearly 40% in most of the past five years, it's no wonder filing bankruptcy seems to be a popular pastime in the United States. Virtually everyone in the country knows at least a few people who have filed bankruptcy or have filed themselves. Many have contemplated a bankruptcy filing themselves, but may have found other ways out of their situation.
What is noteworthy about the bankruptcy filings in the past five years is that they have come from people of all classes. While most are from working families in the lower to middle classes, there have been many people from the higher classes filing bankruptcy as well. There seems to an economic crisis that has affected everyone in the country. In fact, many around the world have been suffering from this crisis.
Unfortunately, bankruptcy hasn't just come into fashion. It is being forced upon millions of people who simply can no longer survive in our modern economy. Filing bankruptcy is not something that admits a person into a special club and the gifts of shame and broken credit are far from exclusive and desirable.
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So, what is it about the economy that seems to be forcing so many people into filing bankruptcy? There are some interesting trends that have led to the mass filing of bankruptcy:
Prices on everything from food to gasoline continue to go up, increasing the cost of living. Unemployment rates have been very high with massive layoffs from many of the country's biggest employers. Open jobs receive thousands of applicants, making it very difficult for most to land a good paying job. College graduates struggle to find employment in their fields, forcing deferment and default on student loans and other financial obligations. Many well educated job applicants are considered over qualified for the positions they find available.
The first two facts listed here spell out the whole picture: the cost of living continues to rise while jobs continue to decrease. This is what has sent so many people to the bankruptcy attorney to file.They lose their jobs and can no longer keep up with their credit cards, mortgages, and car loans. They are forced to live on less money yet have to pay more for the basics such as heating their homes and putting food on the table for their families.
The fact that the number of people filing bankruptcy each year continues to escalate is disheartening, but the fact that the increase was much less in 2010 than 2009 should give some hope.
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