Posted on 12/28/2005 12:43:50 AM PST by SDGOP
An unprecedented spike in filings before reform took effect in fall 2005 is chewing into lenders' bottom lines, and the subsequent lull is showing signs of being short-lived. Bankruptcy attorneys say their caseloads are starting to pick up, and credit counseling agencies -- which provide now-mandatory sessions for consumers who want to file -- say they're seeing significantly more people than they initially predicted.
All this is raising questions about whether lenders will profit as much from the new bill as they hoped.Credit card interest out of control? Find a lower rate.
It wasn't supposed to be this way. The new law contains a “means test” that was supposed to steer higher-income filers toward repayment plans. Lenders expected a rush of consumers trying to beat the bankruptcy deadline, but nothing like the surge that actually occurred. More than 500,000 bankruptcy cases were filed in the two weeks before the law took effect, compared with a normal weekly volume of 30,000 to 35,000. So far this year more than 2 million cases have been filed, 49% more than the same period last year and eclipsing all previous records.
(Excerpt) Read more at moneycentral.msn.com ...
the IRS pub on Health Savings Accounts---
http://www.irs.gov/pub/irs-pdf/p969.pdf
Thank you
When high paying jobs are going overseas and people have to turn to McDonalds for work, the bills still gotta be paid. When they can't be, you get 500,000 bankruptcy filings. Go figure. The politicos and the Corporations will pay for this.
The question is not when. To my way of thinking, the question is rather a matter of how harsh the retribution will be.
You made my point. They can't roll with the punches (what I am calling a "true emergency") because, as you said, their lives already are total "emergencies."
Even a person on welfare can, over the course of a couple of years, save $30 so that, if a killer hurricane comes, they can gas up their car and get out of town. Which did NOT happen in Katrina.
By "true emergency" I do not mean *anything* that sends a particular individual over the edge financially. I mean an event that would be difficult to address even if the individual had been completely responsible in spending, saving and planning.
From the article you cited:
"Among those whose illnesses led to bankruptcy, out-of-pocket costs averaged $11,854 since the start of illness; 75.7 percent had insurance at the onset of illness."
In those cases, the illness did not lead to bankruptcy. A lack of prudent financial planning did. I've been seriously ill/injured twice, and absorbed significant out-of-pocket costs both times (well above the average costs cited here). Neither event forced me into bankruptcy. Heck, I didn't even come close.
But for the guy who charges a lifestyle that's above his means and does not save for a rainy day, yeah, ANY unexpected expense is going to ruin him.
Oh please! I have consistently said there are legitimate situations for bankruptcy and legitimate circumstances that produce an excruciating strain on a person's financial future.
However, please read the articles posted on this thread. The average medical bill that "forced" a person into bankruptcy was about $12K, with NO mention that the person also could not be insured in the future (and thus have that to deal with financially).
Do you think most middle and upper class income-earners think a $12K consumer debt is insurmountable? Yet when it is a $12K medical bill---bankruptcy?
I'm very sorry your secretary got sick. Did she have insurance at the time?
There is nary an umbrella that there is not a hailstone tougher than.
Glad for your recovery and congratulations on your prudent financial planning. That's what this is all about.
You said it exactly right: it's often not the illness that forces the bankruptcy.
I also have an ongoing medical problem. I have had to make decisions about work etc. based on insurance and so on. That's the way it is.
Knew a highly paid professional who was unemployed for a while and lost his employer subsidized health insurance. His wife had had cancer so COBRA payments were a killer. While looking for a job in his profession, he worked nights at Home Depot. The pay did little to ease their pain in this time, but he did get to roll over into their health insurance program and that's why he was stocking shelves at night.
I don't think anyone here would be dissing your secretary. Cancer is a serious catastrophic medical situation. It is one thing to plan for major medical events and completely another when catstrophic events happen. Your secretary filing BR would be understandable. I think what people here are trying to say is when the expenses run up on the CC are due to frivoulous spending over time is not acceptable.
Some major medical is unavoidable and I find this whole thread a very interesting read. Note that much of this whole thread went from CC Bankruptcy to what is on those cards for many are medical expenses. Very few here could afford cancer treatments even with insurance and paying only 20% of the bill.
Yes, love that 24" wide brush don't you.
I'm not sure who the biggest SUCKERS are, the creditors or the people who sign up and fill up every card that comes their way. Just because you own a home, doesn't mean you can afford extras.
"There is nary an umbrella that there is not a hailstone tougher than."
True enough. But the average "medical debt" that led to bankruptcy cited in that article was less than $12K. That kind of money is chump change if you're reasonably prudent with your money. But if you're maxed out on your credit cards, and making only the minimum payment, you're going to be thoroughly hosed.
These folks are not victims.
They're volunteers.
"Oh please! my former secretary made the foolish and stupid decision to come down with a bout of colon cancer at age 29, so she can no longer get health insurance at anywhere an affordable rate."
She is the extremely rare exception.
The general rule is very different.
Sure the amount of medical bills on the credit card statement may sum up to $12 k, but what about bills for groceries, gasoline, clothing, and the other staples of life that the strapped person with a medical situation must use his credit cards for to survive?
That is a tough situation and certainly bankruptcy could be appropriate.
Are you sure she is required to inform employers of her disability? I thought it was unlawful under the ADA for employers to inquire unless the job has specific physical tasks that you need to be able to accomplish.
"Most of theses peoples lives are emergencies...they were close to the edge as is and something bad happened..."
In other words, they had lousy planning, the inevitable happened, and NOW they have an emergency--one that would not be an emergency if they hadn't insisted on living close to the edge to begin with.
"I don't say I know all the answers but I usually left the office whispering...... there but by the grace of God go I."
In other words, you're also living above your means.
That's the point: the person was "strapped" to begin with and "using credit cards to survive."
That's the situation that should be avoided in the first place if at all possible, and it frequently *is* possible with financial prudence.
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