financial reflections

CNN Money reports that personal bankruptcies are on the rise.  That may just be a yearly trend, because based on weekly data, the filings dropped dramatically after the magical date of October 17th, 2005.

October 17th was the much publicized day that personal bankruptcy rules became much tougher on anyone filing.  My prediction is that bankruptcies will drop dramatically in 2006.  First, there will be a steep drop in filings, partly because so many people filed in 2005.  Anyone who was contemplating it, probably has taken the steps to investigate it already.

I thought about it, fleetingly, during the tech downturn after 9/11.   But a much better method, at least for me, was to increase my income and pay off my cards and loans.  Bankruptcy wasn’t a realistic idea for me then, and it certainly isn’t now.

The new law makes it tougher to file for personal bankruptcy, forcing a prospective filer to go through a longer interview and credit counseling.  And apparently, getting a student loan waived in bankruptcy is harder than ever.

The rule for me is simple, it is really hard to file for personal bankruptcy if I don’t have debts to be forgiven of.  So far so good.