According to an article in the Dallas Morning News, personal bankruptcy filings have surged 33 percent since 2007. In the Dallas- Fort Worth area alone, 15,707 consumers filed for bankruptcy in 2008, a 20 percent increase since 2006.
The article said:
“Consumers are under great financial stress, with no immediate end in sight,” said Samuel J. Gerdano, American Bankruptcy Institute executive director. “We expect the upward spike in personal bankruptcies to continue in 2009.”
“Because we have had a negative savings rate, when someone has a job loss and income interruption for three to six months, that can put substantial stress on a household budget,” Gerdano said. “If there is no other earner in the household, you can pretty quickly run delinquent on month-to-month payments on credit cards, the mortgage, rent, car payments.”
Americans are under extreme duress because they are not financially prepared to handle the extreme downturn in the economy. Many Americans facing foreclosures and job losses don’t even understand their bankruptcy options so many refuse to file and end up financially ruined losing assets and even becoming homeless. Americans need to be made aware of the fact that it is not possible to sustain mortgage/rent payments and other obligations without a consistent source of income and no savings in the current economy where finding a job can take at least 8 months. If someone has little or no savings and loses his/her job, they need to speak with a bankruptcy attorney immediately to find out about their bankruptcy options. The number of people filing for bankruptcy will continue to increase because many Americans are losing their jobs and with no savings, bankruptcy is their best option.