Congress Passes Bankruptcy Reform Bill
- Thread starter tricksterpup
- Start date
Whoever said that all or even the majority of bankruptcy cases involve high credit card debt? I believe it's pretty assumptuous to think so. I'll stand by my stat that well over 60% of bks are filed within six months of a job loss or a debilitating illness. I see that at least some of you doubt this so I will take the time to find the links.
Stay tuned.
Stay tuned.
Mindtonic,
The cause of the BK may be the loss of a job or medical condition, but that isn't the problem. the problem is over-extending debt - living paycheck-to-paycheck and not properly planning for a sudden life change. The typical American saves less than 5% of their income - and that includes retirement savings. Their is no way to recover from a major event with saving rates this low - never mind saving for retirement (but that gets into Social Security and another topic which is bound to get heated).
Most personal bankruptcies could be avoided by being proactive and not spending against future income. It is similar to 2000-2001 tech bubble. People were bidding up tech stocks based on future potential - then things came crashing down when people realized there was no way these companies were worth 1000 x's earnings or more if they were only growning at 6-12%.
Jon
The cause of the BK may be the loss of a job or medical condition, but that isn't the problem. the problem is over-extending debt - living paycheck-to-paycheck and not properly planning for a sudden life change. The typical American saves less than 5% of their income - and that includes retirement savings. Their is no way to recover from a major event with saving rates this low - never mind saving for retirement (but that gets into Social Security and another topic which is bound to get heated).
Most personal bankruptcies could be avoided by being proactive and not spending against future income. It is similar to 2000-2001 tech bubble. People were bidding up tech stocks based on future potential - then things came crashing down when people realized there was no way these companies were worth 1000 x's earnings or more if they were only growning at 6-12%.
Jon
I think your misinterpriting those statistics. The only reason someone declares bankruptcy is that they owe money. The only way to owe money is to get things that you cant pay for. IE- credit/loans.mindtonic said:
To say that the american public does not abuse/misuse credit is downright ridiculous. Most americans owe more money than they make. In fact, most americans who get fired/lose their job continue to spend money using credit.
However, I dont think this bill will change that.
Slip, don't you feel that if there is no penalty for wrong behaviour, then there is no fear of committing that behaviour? Aren't laws set up as a detterent to destructive behaviour?Superdoopermoderpooper said:
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Sure, but I dont think most people will read about or even care about this bill. Its only once they attempt to declare bankruptcy that they will find this out.Matak said:
Of course, I dont think our goverment should be telling us not to spend on credit... They certainly arent setting a good example.
Well, how about this angle: bankruptcy has become convenient and socially accepted over the years because of its lack of penalty. If bankruptcy had greater consequences or was less accessible, then perhaps the tide of public opinion would sway the other way.
*edit* ...in time. It took quite a while for the idea of an 'easy out' to catch on. It will take time for a reversal.
*edit* ...in time. It took quite a while for the idea of an 'easy out' to catch on. It will take time for a reversal.
I think the bill will have that result in the long term, but in the short term, I think there will be a lot of very surprised people--and court cases, and complaints, and feigned surprise. A large segment of the population seems to feel that they are owed a living of their choice--independent of their ability to earn it.
OG, you have hit a oft missed nail, right on the head.
IMO of course.
Most of the public today are deluded by a sense of entitlement that I beleive has its origins on 5th avenue, that says we 'deserve more'.Oniongirl said:
IMO of course.
Very good points OG and Mr Newman...
Just because one exists does not entitle them to an easy life.... or does it?
IMO their are too many social programs that started out with great intentions but abuse has turned them into societal nightmares. BK is just one of them...
J
Just because one exists does not entitle them to an easy life.... or does it?
IMO their are too many social programs that started out with great intentions but abuse has turned them into societal nightmares. BK is just one of them...
J
