This article from the AP should come as no surprise. Everyone in the "know" is aware of the fact that the US is falling like Rome. I've posted threads about the rising cost of education, outsourcing to India and China, and the negative savings rate of Americans since 1933. Despite this, some people here at DP still believe "everything is ok" and the "economy is great." Well, the truth hurts. This article provides even more evidence that the US is headed towards the greatest economic crisis ever seen in its history. My advice to everyone reading this is to save their money, and get out of debt as soon as possible. If you can, by some gold and silver also: WASHINGTON - Personal bankruptcies soared 30 percent to a record high last year as financially strained people rushed to file before new restrictions took effect Oct. 17. ADVERTISEMENT Bankruptcy petitions filed in federal courts totaled 2,039,214 in 2005, up from 1,563,145 in 2004, according to data released Friday by the Administrative Office of the U.S. Courts. A new law, which brought the most comprehensive revision of the U.S. Bankruptcy Code in a quarter-century, made it more difficult to erase credit card and other debts in bankruptcy. Prior to its enactment, the number of bankruptcy filings had been fairly stable. The law bars those with above-average income from Chapter 7 — where debts can be wiped out entirely — except under special circumstances. Those deemed by a new "means test" to have at least $100 a month left over after paying certain debts and expenses must file instead a 5-year repayment plan under the more restrictive Chapter 13. The new figures showed that last year there were 1,631,011 personal bankruptcy filings under Chapter 7, up from 1,117,766 in 2004. Chapter 13 filings declined to 407,322 from 444,428. In the final quarter of the year, which included the two weeks preceding the Oct. 17 deadline, filings under Chapter 7 ballooned to 560,654 from 254,518 in the October-December period of 2004. Chapter 13 filings fell to 93,714 from 109,116. A group representing bankruptcy attorneys has contended, in a report released last month, that the law has failed to stop abuses and has stymied people who have legitimate reasons to file for bankruptcy. The report by the National Association of Consumer Bankruptcy Attorneys was based on an analysis of 61,335 people who had gone to credit counseling agencies, the required first step under the new law before filing bankruptcy. Of the 61,335, 97 percent were unable to repay any debts and 79 percent had gotten into financial trouble because of job loss, huge medical expenses or the death of a spouse, the report said. Passage of the new bankruptcy law came after eight years of strenuous efforts by congressional backers, banks and credit card companies. Supporters said the new provisions were needed to curb abuses of the bankruptcy system. Opponents said the changes would be especially hard on low-income working people, single mothers, minorities and the elderly and would remove a safety net for those who have lost their jobs or face mounting medical bills.
You're right latehorn. Let me ask you and anyone reading this post a question. Have you ever played a jigsaw puzzle? You know, the game where you take a bunch of pieces and put them together on a board to get a picture? Well, I'm going to play a kind of puzzle here: 1. The AP just ran the article above about bankruptcy filings being up 30% 2. Another article was ran by Yahoo about Americans saving at a negative rate of -0.05% 3. The government passed a law recently making it harder for people to file bankruptcy. 4. Banks and credit card companies are getting ready to double the monthly payments. 5. Gold and silver are skyrocketing in value. 6. Jobs are being outsourced to India in record numbers. Good morning America ran a special about it a few weeks ago. 7. Another article ran by the AP or Reuters stated that young Americans will have a difficult time earning an income Now, when I take these seven pieces, and put them together on the board, what picture do I get? A country that is headed towards the greatest economic crash in history!!!!!!!!
I bet all the new homeowner are starting realize that interest only loans can only be supported for so long. Say goodbye to the middle class...
I would re-write this slightly This article provides a few poorly documented opinions which may have some relationship to future economic events. No doubt the US is headed for the greatest economic crisis ever, but I don't think anyone knows if that will be next month, next year or the next century. I remember a Forbes columnist named Ashby Bladen who wrote The Coming Economic Collapse in 1979? He finally left Forbes and pulled his book off the market when none of his disaster forecasts took place. Saving money and getting out of debt is always good advice I think I would rather have a portfolio of profitable and popular websites instead of gold and silver.
Here's the cold hard facts--and I am sorry if I offend anyone. People like me (and I hope many others here) are just fine. Why? Because we are educated and continue to grow. America is heading towards a high services industry (Lawyers, Doctors, etc) economy. The labor jobs are being outsourced to the cheapest labor force--especially tasks that can be handled virtually. If you had a manufacturing type job, you are no longer relevant in our society. Why? Because your job required very little in the way of knowledge and can be done at a fraction of the cost elsewhere in the world. It's not going to change so you can evolve or perish--your choice. If you are reading this post and are not college educated, now is a good time to go and start down that course. Go into a field that is and will be in demand for decades to come like: Medical, Legal and Politics. Don't be someone who stops at a baccalaureate. Go on and get a professional degree. The more educated you are, the more secure you will be. This is Globalization in a nutshell. It's only new to the uneducated. It's just like when the industrial revolution came. Some people embraced it, adapted and were better off. Others fought the change, hoped for a return to the "old" way and were left behind. Only 1/3 of the American population has a college degree (baccalaureate) and a fraction of those degree holders went on to get a masters, professional degree or PhD. Now you can see why a majority of Americans are running around yelling the sky is falling. The economy is further complicated by the buy now, pay later syndrome that grips most American consumers. A strong majority of Americans don't understand the simple concept of buying something when you actually have the money to pay for it. The rates on credit cards should not be relevant and the only types of debt an American should have are mortgage, auto loan and possibly school loans. It can be argued that an auto loan is a bad debt.
I'm not offended. What you say is the truth, and if anyone is offended it is because they can't handle the truth. The reality is we live in a materialistic society where everyone wants to have a big screen tv, suv, or big mortgage. With the rising cost of just about everything, you are simply not going to be able to have your cake and eat it to. This is why the average American owes $8,000 in credit card debt. They want to have the latest cell phones, tvs, and everything else. And what will the $300 razor phone today be worth five years from now? It won't be worth anything. Yet, people will go out and pay top dollar for something that loses value. Then when they go bankrupt, people like me buy their goods for pennies on the dollar. I agree with you that most people in this forum don't fall under this category. In fact, only about 15% of the population has a home based internet business. Most here at DP have nothing to worry about, myself included. I have no debt, and lots of savings. I'm just thankful we have the internet which is truly free market, and people can quickly spread news and idea. I see young guys my age all the time with chrome wheels on their cars, but they have no college education. I laught at them. Their days are truly numbered. If you don't understand how to manage your finances, and how to select the right career or business, you indeed are an endangered species. I never pay retail value for anything. That includes tvs, electronics, and computers. I always buy wholesale, and I always make sure I get a good deal. While I do blame the FED for a lot of the problems we see economically in the US, Americans are also responsible. They choose to support this system, and they choose to put themselves in debt. Having both would really put you in a good position.
Before the new rules were set in, lawyers were advertising HEAVILY on the radio, that people SHOULD file for bankruptcy now, just so they didn't miss the chance later. Even if they didn't need it, services were offered to EVALUATE your situation, and advise you if bankruptcy was needed, by a bankruptcy lawyer of course. So, I'm guessing people who wouldn't have, or were fence-riding flooded the courts with their filings with the help of these helpful lawyers. Wonder if there will be any articles about next year having a gazillion % drop verse this recent bankruptcy spike. Oh that would imply something positive, so such luck. later, tom