Why 119,874 Consumer Bankruptcies Should Worry You
There are few signs of financial desperation as severe as filing for bankruptcy. It’s the final step taken after every other possible way of meeting bills and obligations has been fully tried and failed. For this reason it can be viewed as one of the most credible ways of figuring out the economy’s health.
To dig into this measure, My Budget 360 looks at the 119,874 consumer bankruptcy filings in August, an increase of 24 percent since last year, and considers the data in terms of filings over the past five years. The pattern that emerges is ominous to say the least.
The number of August bankruptcy filings is the worst since December of 2005. This is especially disconcerting since the Bankruptcy Abuse Prevention and Consumer Protection Act went into effect in 2005 making it more difficult to file bankruptcy and the subsequent terms of bankruptcy more burdensome. Yet, since the initial drop off beginning in 2006, bankruptcy rates have only been steadily increasing.
To quote the piece, “Only in some bizarre universe is spiking bankruptcies, foreclosures, and unemployment some sign of a rebounding economy.” It’s true and it hurts. My Budget 360 offers about four graphics and many insightful specifics on the growing rate of bankruptcy filings.