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Finance
It Was Predictable
by Mark
Kohler
www.borntexan.org
The various lenders – primarily the credit card issuers – spent
millions of dollars in their attempt to ‘buy off’ the politicians
and get a new bankruptcy law passed. Their major objective was to
dramatically reduce the number of people who file for Chapter 7
bankruptcy protection, which enabled people to virtually write-off
nearly all of their debt. As you know, if you have been following
this issue, the new law passed and the lenders were ecstatic that
the debtors – or most of them – would be forced into Chapter 13
bankruptcy, which requires debtors to comply with a court-ordered
payback schedule for much of the debt over an IRS imposed budget and
payback schedule.
Well, the result has been a lot less than the lenders had hoped
for. Consider the following facts;
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Over 500,000 new filings for Chapter 7 were made in the first two
weeks of October – just before the new law took effect on October
17.
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In 2005, over two million bankruptcies were filed. That’s an
increase of nearly 50 percent over the number of filings made in
2004.
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The number of those who beat the deadline and who filed Chapter 7,
and who would have been found qualified to enter a repayment plan
for Chapter 13, was extremely low. Among the half-million who filed
in the final two weeks before the new law became effective, nearly
all were in serious financial trouble with no other alternative to
Chapter 7 bankruptcy for relief of their debts.
And now to the conclusion: of all those who sought to beat the
filing-for-Chapter 7 bankruptcy by filing before October 17, only
about 3 percent of those half-million filers would have come close
to qualifying for the
“you’re-going-to-pay-back-much-of-what-you-owe” requirements of the
far more stringent Chapter 13. Now, what does all this mean to you?
I cannot answer that since I don’t know the extent of your debt
situation, but I do know that we’ve only seen the tip of the iceberg
when it comes to the numbers of people who are buried by debt. If
‘owing money’ and being in debt is a serious issue in your family,
the odds are that you are also in denial as to just how serious the
issue is and how much money you are giving away in the form of
interest. Your future fortune hangs in the balance, so don’t let
‘what you owe’ become such an impossible amount of money that you
end up in bankruptcy court instead of among those who have – or are
in the process of becoming – debt free and on their way toward
becoming financially independent.
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