Posted by Lindsey Connell
Bankruptcy filings have continued to rise year after year but the numbers in 2009 indicate a downward spiral. There are many factors that may increase personal bankruptcy such as natural disasters, high income rates, and mass layoffs. Natural disasters occur all around the world but a recent disaster occurred with Hurricane Katrina, resulting in a devastating amount of people left homeless. Because of occurrences like this and others, people may choose to file for bankruptcy to in a sense “start over” because what they had before was now gone. Bankruptcy may not even be a choice for those who were forced to take out another mortgage loan, keep up with the interest payment of credit cards, and medical expenses.
Also, interest rates on credit cards are continuously increasing causing many individuals and companies to either rethink their current situation of look to bankruptcy. Another factor is with mass layoffs, and this is seen especially in the past two years. With the economy so down today, many companies are making cost cuts by laying off current employees. This results in workers losing their jobs and having no source of income. Some other factors that could lead to bankruptcy are reduction of personal savings, increase in consumer debt, and changes to bankruptcy law.
http://ezinearticles.com/?Factors-That-May-Increase-Personal-Bankruptcy&id=840764
http://www.bankruptcyinformations.com/reasons_that_may_increase_personal_bankruptcy.htm
Good points, companies are increasingly laying off tenured employees and hiring one or several young employees for far less money. While this seems unfair and ethically wrong, it makes sense for companies to increase productivity while decreasing their expenses.
ReplyDelete-Andrew Pia
Good points. With the unemployment as high as it is and expected to continue to grow, this should also be a major contributing factor to people becoming bankrupt.
ReplyDeletePosted by Kenny Hernandez