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it is interesting to note that:
In December, according to the Financial Management Service, the US Treasury dispensed a stunning 69.5% more in Social Security Outlays and Unemployment Insurance on a year over year basis: the administration knew all too well it could not afford to let this holiday season go to waste. So, after averaging at $43.6 billion in monthly outlays, Social Security withdrawals from the UST surged by a unprecedented 48.6% in December to a whopping $69.5 billion.
obviously, we can't continue at this rate.
add that to the personal bankruptcy statistics:
Overall, personal bankruptcy filings hit 1.41 million last year, up 32% from 2008, according to the National Bankruptcy Research Center, which compiles and analyzes bankruptcy data. It is the highest level of consumer-bankruptcy fillings since 2005. Consumers rushed to file in 2005 before the new bankruptcy laws took effect in October of that year.
Chapter 7 filings were up more than 42% as of November 2009, compared with the same period a year earlier, according to the research center. November is the most recent month with analyzed data available. Chapter 13 filings rose by 12% and made up less than a third of 2009 filings as of November.
"That suggests it was largely ineffective," Ronald Mann, a law professor at Columbia University, said of the 2005 overhaul. "I don't think anybody who's knowledgeable about the bankruptcy system thought the statute was well crafted."
Last edited by floridasandy; 01-09-2010 at 07:12 AM..
You're talking about two different things as though they're supposed to mean something.
Of course unemployment benefits and social security payments are going to go up in a recession when there are more people out of work: this drives the claims up and reduces the payments into the system.
As for bankruptcy, is it any surprise that in a recession more people will be filing? Or that the filings will continue to go up even as we start coming out of the recession? What else would you expect to happen as people exhaust their savings, become less able to pay their debts, and start facing the consequences of those circumstances?
And as to the ratio between Chapter 7 and Chapter 13, the same thing is true: if there are fewer people working, it is only to be expected that the people filing bankruptcy will have insufficient income to fund a 13, and will have a low enough income to qualify for a 7.
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