The New York Times refers to our current economic situation as a “downturn,” but well, let’s go out on a limb and just say we’re in a recession. Maybe, just maybe, a $750 billion bailout to the banks, Lehman Brothers no longer in existence, and Ford and GM begging for cash with their stock prices under $4 qualifies for this label. Plus, importantly, there is the fact that there has been a jump in the number of people filing for bankruptcy.
In fact, the Times reports today that more people are filing for bankruptcy than at any time since the 2005 Bankruptcy Act (a gift for the credit card industry) was passed by Congress placing more restrictions on filers. President-elect Obama voted against the measure while Joe Biden voted for it. The article reports that:
The number of personal bankruptcy filings jumped nearly 8 percent in October from September, after marching steadily upward for the last two years, said Mike Bickford, president of Automated Access to Court Electronic Records, a bankruptcy data and management company.
Filings totaled 108,595, surpassing 100,000 for the first time since a law that made it more difficult — and often twice as expensive — to file for bankruptcy took effect in 2005. That translated to an average of 4,936 bankruptcies filed each business day last month, up nearly 34 percent from October 2007.
According to the article, recent filers have had a higher amount of credit card debt and medical bills than in 2001. In fact, many overextended their credit cards in an attempt to keep their homes. Their income has also remained relatively static.
In the bailout for the banks package passed in Washington D.C., there were no provisions allowing for bankruptcy judges to rework mortgage payments owed to lenders. Where is the bailout for these bankruptcy filers?
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