01 Jul There Is Something Happening And You Don’t Know What It Is, Do You, Mr. Jones?
The most experienced and knowledgeable bankruptcy attorneys try to stay current with the latest bankruptcy court decisions and with the local and national trends that are most affecting their current and potential future clients. To do that, we refer to several sources. One, of course, is keeping current with the postings on bankruptcylawnetwork.com, and the sister-sites mortgagelawnetwork.com, debtlawnetwork.com and creditlawnetwork.com.
In addition, we subscribe to “Bankruptcy Abstracts”, a bi-monthly report on all the latest bankruptcy court decisions throughout the country, and “Consumer Bankruptcy News”, a bi-weekly overview of bankruptcy court decisions and consumer bankruptcy related news.
Page 2 of the latest issue of “Consumer Bankruptcy News” lists the following headlines:
Bankruptcy filings increased by 31 percent in May
Foreclosures increased by 48 percent in May
Study finds increased rate of bankruptcy among older Americans
So, to quote Bob Dylan, “There is something happening and you don’t know what it is, do you Mr. Jones?” What is going on? We have all heard about the sub-prime mortgage crisis, so it is no big surprise that foreclosures are rapidly increasing. Foreclosure filings totaled 261,255 nationally during May, the third straight month with a month-to-month increase, and the 29th straight month of year-over-year increase. There is now an inventory of over 700,000 bank-owned foreclosed properties.
The 91,214 consumer bankruptcy filings in May is a 31 percent increase over last May. At this rate, according to Samuel J. Gerdano, the Executive Director of the American Bankruptcy Institute (ABI), there will be over a million filings this year for the first time since the more restrictive bankruptcy law of 2005 went into effect.
The most disturbing of the three headlines was that the rate of bankruptcy filings among Americans 55 and older has nearly tripled since 1991, according to the AARP’s Public Policy Institute. Older Americans have experienced the sharpest increase in bankruptcy filings, jumping from 8.2 percent of debtors in 1991 to 22.3 percent in 2007. Harvard Law Professor Elizabeth Warren, author of the study, found that the median age for bankruptcy filers had increased from 36.5 years old in 1991 to 43 years old in 2007.
The increase in bankruptcy and foreclosure filings will continue for quite a while according to most savvy observers. The increase in the rate of bankruptcy filings of older Americans is something we should be very concerned about. As living expenses continue to rise, as inflation sets in, unless our senior citizens find some way to dramatically increase their income, they will have to turn to bankruptcy in even greater numbers. Will Grandpa and Grandma be forced to live in a box under a bridge? Stay tuned.
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