Bankruptcy decline could reverse amid better jobs picture*

Well I saw this in the news and it made me a little sad.  Bankruptcy experts believe that a rise in job numbers can cause greater bankruptcy numbers.  A rise in jobs means that creditors can garnish wages, while if you are taking unemployment/social security you don't have much to give to creditors.  It seems a sad existence that getting a job after months/potentially years on unemployment, doesn't lead to less financial burdens.

Then to add to the sadness, the article goes on to state that bankruptcy simply declined due to its high cost and NOT the improvement of the economy.  The average fees for an attorney under Chapter 7 filing was $712.  Although this doesn't seem high, for someone who is unable to pay their creditors that can be a rather high rate.  Additionally Chapter 7, gives you a fresh start.  You sell all your assets and essentially "begin again".  Chapter 11 and Chapter 13, are much more expensive totaling in around $1,500-$4,000.  But unlike Chapter 7, Chapter 13 or 11, simply place you on a "new plan of re-payment".   *Keep in mind this is Tennessee dollars, where the median income is $44,140

In 2004, Congress passed a law that made Bankruptcy qualifications more strict.  In Tennessee alone over 60,000 people filed for bankruptcy.  Which at first glance, seems like a lot but is only 1% of the population.

As credit becomes "looser" and more people are able to obtain loans-- the rate should only increase.  Even MORE upsetting was to read that student loans should have a great affect on Bankruptcy.  It appears to be extremely difficult to discharge students loans.  It will be interesting to see the effect this will have on future students, and how bankruptcy will evolve with the high interest rate of student loans.  

*Article from Tennessee.

http://www.wbir.com/story/money/personalfinance/2014/01/13/bankruptcy-decline-could-reverse-amid-better-jobs-picture/4455655/