Factors That May Increase Personal Bankruptcy

A number of factors are thought to be responsible for the steady rise in the rate of personal Bankruptcy filings in recent months. The September peak of 3541 filing per day is a call for concern to many rights thinking people. The numbers of filing recorded in the months following October 2005, seems to mean that the new law is the panacea all of us needed. Well, as we can see today, that is not to be. In fact, it seems that owing to some factor, the rate of filing will continue to climb at least into the foreseeable future.

Natural disasters.
As people around the world live in fear of ever increasing incidents natural disasters, many would still file for personal bankruptcy as a direct consequence of lost of possession during emergency. Despite the existence of levees and pumps, the disaster that many had feared finally occurred in 2005 when hurricane Katrina stuck. “Long standing warnings” were either ignored or “met with half-hearted response,” said a report in USA Today. That’s talking about the city of New Orleans, Louisiana, USA. It so devastated the city that it takes billions of dollars to bring relief to victims. Despite government’s concerted effort to support victims, many households may still result to filing for bankruptcy due to non-indemnify losses. A couple of months later, hurricane Rita also struck. Hurricanes Rita may not have enjoy much publicity because a lot of people heed the warning and fled the trouble zone. Thus, human casualties were minimal. However, this did not minimized damages to belongings that cannot be transported in a “go bag.” Over the years, a host of other natural occurrences turned disasters had took it toll on people, resulting in enormous damage to businesses, properties and people’s means of livelihoods.

Many are already feeling the effect of these disasters. But the full consequences will yet be experience in the nearest future. The many that lost means of livelihood are most likely to face difficulties in paying mortgage loans, keep up with interest payment on credit card, and medical expenses. These ultimately will lead many to result to filing for personal bankruptcy in the years to come

Natural disaster can cause a lot of havoc on the human society. Some times it’s unimaginable. However, preparedness and heeding warnings, both official and natural warnings can alleviate suffering. Responding to warnings at the appropriate time can help in moving some valuables from the troubled area. Thus, how we respond to warnings is more important than how we will cope with natural disasters.

High interest rate
Credit card companies are now putting back credit into the hand of individuals they once vilified. “We don’t care about your credit score.” “With bad credit you are qualified, good credit will be rewarded.” “You are guaranteed $7500 credit line in 5 minutes” has become the gimmick many finance company adopts to entice unsuspecting members of the public. If it’s true that most filers were bad debtors who deliberately refused to pay, as claimed by financed companies, what assurance do we have that they would the new debt? It would be recalled that prior to the enforcement of the new bankruptcy law in the United States, many credit card companies went to the senate saying, America runs the risk of being ruin by bad debtors. Interest rate on credit card is on the increasing side and those once declared bankrupt faces additional risk. Then going bankrupt again is not foreclosed.

Mass layoffs.
As companies in the building and transportation equipments industries struggles to survive in a saturated market, cutting down on cost is not an option. Reducing the number of employee on their payroll has been the route many takes to achieve reduction in cost. Disengaged employees are really in for a hard time in face of surging cost of living. High transportation cost, rising medical bill makes heath insurance inevitable.

These and many more jostles for the meager income of a disengaged family head. Not to be overlooked are mortgage and car loan. In an era of mass job loss, it is only reasonable to expect more to file for personal bankruptcy. Are we saying this to scare or put fear in you? In no way! To be forewarned is to be fore armed they say. The purpose therefore, is to help you be on guard. How can you do this?