Bankruptcy

Today, the new Bankruptcy laws went into effect.

In honor of that event, I thought I'd post some statistics I heard today. Quite different from the abuse of the system that we're told is being curbed by this new law, the majority of bankruptcies are NOT filed by the poor, they are filed by the middle class.

And the majority are NOT fraudulent or the result of people borrowing more than they can afford or buying too much on credit.

The two most common reasons that people file for bankruptcy are:

• unexpected extreme medical condition (source)
• divorce

Apparently, at least according to the statistics I read, fully half of all bankruptcies are spawned because of an extreme medical event, often in an insured family that ran afoul of some sneaky little loophole in their medical insurance coverage that allowed the insurance company to declare the disease a non-covered event.

Another 30% are the result of messy divorces in which the half of the couple that DIDN'T earn most of the money is left with half of the mutual debts and no longer any way to make the payments on them.

Which means that this new law, while ostensibly trying to crack down on cheats and the fiscally irresponsible (and how dare our government chastise ANYONE for fiscal irresponsibility?), those make up at best 20%. And meanwhile, we're sentencing thousands of people fighting cancers and other deadly conditions to a lifetime in hock. Some compassion for the sick.

Liam.