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Can We Avoid Bankruptcies?

The amount of bankruptcies in 2005 jumped almost 30% as people rushed to get their filings completed before the new laws took hold. Personal bankruptcies totaled almost 2.1 million across the country. Those statistics make it the largest number of bankruptcies filed in any 12 month period in our history. That's scary. Think about that - 2.1 million people found themselves in financial trouble last year.

Everyone who filed has their own reasons, whether it would be credit card debt, job loss or medical bills. The list of reasons goes on for miles. As a matter of fact, high medical bills are the main reason for the large number of bankruptcies. Let's face it, most people do not have adequate health care. All it takes is for someone to get hospitalized or ill and suddenly they find themselves in severe debt. That's worse than scary, it's sad.

I have a confession to make. I'm in way over my head when it comes to debt. It's my own fault and I admit that. For several years, I couldn't afford to buy anything I wanted, so I paid with plastic. Little did I know that decision would come back to haunt me. I owe close to $20,000. My credit score is very high and I am very proud of that. I live paycheck to paycheck, not always have the slightest clue how I will pay my bills each month. And I'll also admit that last year, when I heard that the laws for bankruptcies were changing, I contemplated filing. I hated the mere thought of contemplating something that I knew would hurt my excellent credit. As the deadline for filing bankruptcies before the new law approached, my husband and I debated for days. In the end, we decided to not do it. I realized that it was our own carelessness that had gotten us into debt and I should accept responsibility for it.

Our best friends however, chose to file while only being in debt a few thousand. What I found exceptionally irritating was the fact that right before they filed, they purchased two brand new cars and went on a cruise. Basically, since they charged the cruise, they didn't pay a cent for it. To me, that's the same concept as stealing.

I understand the need for the new laws, I really do. That doesn't mean I agree with them in every case. The reason that laws are changing is because too many people were taking advantage of filing bankruptcies. They'd charge up their credit cards with new furniture purchases, exotic vacations, and many things they absolutely had no true need for. Then, they'd file for bankruptcy and poof - their money woes were over. On the other hand, since the new laws have gone into effect, the people who face overwhelming debts that could not be controlled are facing more hurdles in order to get a fresh start. Is that fair? Of course not. But, as you know, it only takes one person to ruin it for everyone else. And lots of people did.

If the main reason for the onset of bankruptcies is high medical bills, why doesn't the government take a look at altering those issues? If credit card companies are complaining that they don't get paid when people file for bankruptcy, why give people such a high credit line? Sure, many bankruptcies could be avoided with some common sense usage, that's for certain. But what about those who really are struggling? Who is looking out for them?


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