Re: New bankruptcy law

[Charles Pouncy <cpouncy@xxxxxxxxxxxxx>]

On the issue of the major causes of bankruptcy I refer you to an article
authored by my colleague, Melissa Jacoby with Teresa Sullivan & Elizabeth
Warren, entitled, Medical Problems and Bankruptcy Filings.  Although the
article finds significant gender differences, the major causes of
bankruptcy are in order of magnitude, job loss, medical problems and/or
medical debt, credit card debt, and family breakup.  The article appears in
the May 2000 edition of the Norton Bankruptcy Law Advisor.  According ot my
colleague the major impact of the legislation will be to double the costs
of filing thereby preventing a lot of people from getting in to the system.

Charles Pouncy

At 12:13 PM 03/16/2001 -0800, you wrote:
>I've been bothered by the repeated assertion that the main causes
>of bankruptcies are job loss and divorce.  My impression was that
>bankruptcies are caused by borrowing, especially at high interest
>rates from creditors who encourage continuing indebtedness at
>high compounded interest rates.
>
>On a quick search I didn't find what we need, which would require
>a kind of investigation that accountants don't do, but the following
>are helpful:
>
>"Family Finances in the U.S.: Recent Evidence from
>the Survey of Consumer Finances"
>
>http://www.federalreserve.gov/pubs/bulletin/1997/0197lead.pdf
>
>More pertinent is:
>
>"Bank Trends - The Effect of Consumer Interest Deregulation on
>Credit Card Volumes, Charge-Offs, and the Personal Bankruptcy Rate"
>
>http://www.fdic.gov/bank/analytical/bank/bt_9805.html
>
>which attributes increased bankruptcies to a Supreme Court decision
>that allowed unregulated interest rates.
>
>Credit-card bankruptcies and addiction to gambling are of a class,
>both encouraged by rapacious governments.
>
>        Mason
>    =======================================
>    http://MasonC.home.netcom.com/index.html
>    complete book:   Get Rich in Small Business
>    complete book:   Healing Wisdom of Dr. P. P. Quimby
>    Political Economics for Real People
>    =======================================
>
>
Charles R.P. Pouncy
Temple University
Beasley School of Law			"if life means much to you
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