Back in 2005, Congress believed that too many people were taking advantage of the bankruptcy system and they needed to make changes. They felt that the number of abusive bankruptcy filings was way too high so they introduced the Bankruptcy Abuse Prevention And Consumer Protection Act. The BAPCPA was enacted on October 17, 2005. During the next year real estate values nationwide reached a record high and then began a freefall that hasn't stopped to this day. This phenomenon is pushing many Americans into filing bankruptcy to get away from an upside down property. All these problems didn't happen overnight and have been coming on by regulations imposed by Congress over the last 10 years. The first trigger point that they got mainstream America's attention was the financial crisis in 2008. This perfect storm that has been created threatens the retirement of every American and even the way we live.
The mainstream media refuses to use the term depression and instead keeps saying that the economy might slide back into another recession. Most experts have said that our economy never left that recession. Ever since Congress changed the bankruptcy code back in 2005 the number of Americans filing bankruptcy continues to be on the rise. The only trade that has been benefiting from these changes is that of a bankruptcy attorney.
As the news refuses to accept the economic downturn there are many factors that show a different story. First of all, because of the real estate crisis, home ownership is getting close to historic lows in many regions in the US. Next, the rate of foreclosures in the US continues to rise and has increased 14% in the last quarter alone. It was recently reported that there were 20 million homes in America that were in default or in danger of being in default currently. Another economic factor that should open peoples eyes is the unemployment rate. Unemployment has not dropped below 9% since back in late 2008. Many people believe that this number is not a true number because many Americans have given up on looking for work. One big fact that should wake up many is the rate of Americans filing for bankruptcy. In 2010, there were close to 1.6 million bankruptcies filed in the US. Although, the number of people filing bankruptcy in 2011 is relatively flat, many people are predicting this is the calm before the storm.
Any bankruptcy attorney could point to the changes to the bankruptcy code that began the slide down the slope for the US. Historically, filing for bankruptcy was a safety net for Americans that got caught being overwhelmed with a mountain of debt. They idea behind bankruptcy was to allow small businesses to take risks and have a way out in case they failed. Bankruptcy is the backbone of capitalism because if individuals with ideas were obligated to pay debts back for life or debtor's prison, no one would take the risk. Only time will tell how this mess washes out. The government needs to get out of the way and allow our economy to take the path of least resistance and fix itself.
After all the changes to bankruptcy filing, it still has a lot to offer the American consumer. Now, it is just become a little more complicated and is best served with the help of a bankruptcy attorney to navigate the new bankruptcy code. It's still true that filing bankruptcy was created to give good hard working Americans a second chance by putting them on the road to becoming debt-free.
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