The Driving Force Behind New Bankruptcy Law Reform Acts

More cases are filed each year because more American families are burdened with crushing debt, which indicates fundamental structural changes in the U.S. economy. These changes combine to increase not only bankruptcy filings, but foreclosures, repossessions, utility disconnections, credit card defaults, debt litigation, as well as fuel rising demand for services provided by lenders - debt consolidation loans and so called "independent" non-profit consumer credit counseling supported by credit card companies. Despite cries of crisis, commercial lenders continue soliciting credit card applications with higher spendable limits at an alarming rate.

The factors contributing to filings are: corporate downsizing, outsourcing jobs internationally, income disruptions, loss of high paying jobs, and underemployment of professionals. Most stunning, based on a joint national study conducted by Visa® and MasterCard®, no more than 19% of all cases filed are caused by overspending or recklessness. Unfortunately, over 80% of all filings involve either job loss, disability from illness/injury, or contested divorce. Already stretched beyond return, any one of these unexpected events tends to push average families over the edge.