A recent study found that the typical family who filed for bankruptcy in 2007 was carrying about 21 percent more in secured debts, like mortgages and car loans, and about 44 percent more in unsecured debts, like credit cards and medical and utility bills, than filers in 2001.
Their incomes, meanwhile, remained static over those six years, according to the study, which used data from the 2007 Consumer Bankruptcy Project, a joint effort of law professors, sociologists and physicians. Researchers surveyed 2,500 households nationwide that filed for bankruptcy in February and March 2007.
I can’t but help note that in 2005 they change the bankruptcy laws to make it harder for people to get out of their debts. The goal was to force more people to pay what they owed. But the practical effect seems to have made it so that people pile the debt even higher before they declare bankruptcy.
I am not one of those touchy feely poor victim type people. But I never thought that the 2005 law was a good idea. From my perspective, the real problem is that banks were willing to loan people too much money. If you loan people too much money, it does not matter what the law says. You are not going to get repaid.