NEW BANKRUPTCY LAW NOT AS BAD AS SOME PREDICTED
October 25, 2006
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More than a year after the new bankruptcy law was enacted, evidence suggests that the fears of a few groups that lobbied against the legislation may have been misplaced, according to an editorial in today’s Wall Street Journal. Between 1995 and 2004, personal bankruptcies rose 78 percent as more people were running up credit card and other debt. Under the new law, bankruptcy filings are down some two-thirds from what they’ve been in recent years. While part of this can be explained in consumers’ rush to file before the new law was implemented, there are also indications that people are responding to the new incentives. In the past, nearly 20 percent of bankruptcy filers have had incomes above the national median. However, since the law took effect, nearly all filers are below the median. Read more.
