Gardnr
Recycles dryer sheets
This article is about the unsurprising increase in personal bankruptcies.
R.O.I. - WSJ.com
One thing that really caught my eye is at the end of the article:
I'm not advocating debtors prisons or anything like that, and I'm sympathetic to those who truly fall on hard times not caused by personal irresponsibility; most often a big medical problem and the resultant bills. But there really needs to be a significant penalty for those who just flat out abuse credit for "wants" that they can't afford. A good 7-10 years of living only on what they bring in should be in order.
I could even see making some distinctions in what brought about the BK. If it was just running up consumer debt then throw the book at them. If it was some other circumstances like health, family hardships, job loss, etc., then give them a much earlier chance at rehabilitating their credit standing.
Of course making those distinctions would be easier said than done in reality. Like when a huge medical bill is just the straw that broke the camel's back after they already had a bunch of consumer debt. Judgments would need to be made and we know how that can go wrong.
R.O.I. - WSJ.com
One thing that really caught my eye is at the end of the article:
Is this just another symptom of the easy credit days that is going to change? I sure hope so because the idea that somebody could get back on the credit drug so soon after filing BK is disconcerting to me.Of course filing for bankruptcy is going to hurt your credit score and could make it harder for you to get a loan in the future. But the effect may not be as bad as you think. Most people who end up filing for bankruptcy already have poor credit scores. And bankruptcy, by wiping out debts, can actually help rebuild them. "Most people can rebuild their scores within one or two years," says Jeff Tromberg, a bankruptcy attorney in Fort Lauderdale, Fla. "It's actually quite common for somebody who files a chapter seven bankruptcy to rebuild their credit scores back up to the high 600s (a reasonable rating), if not higher, within two years."
I'm not advocating debtors prisons or anything like that, and I'm sympathetic to those who truly fall on hard times not caused by personal irresponsibility; most often a big medical problem and the resultant bills. But there really needs to be a significant penalty for those who just flat out abuse credit for "wants" that they can't afford. A good 7-10 years of living only on what they bring in should be in order.
I could even see making some distinctions in what brought about the BK. If it was just running up consumer debt then throw the book at them. If it was some other circumstances like health, family hardships, job loss, etc., then give them a much earlier chance at rehabilitating their credit standing.
Of course making those distinctions would be easier said than done in reality. Like when a huge medical bill is just the straw that broke the camel's back after they already had a bunch of consumer debt. Judgments would need to be made and we know how that can go wrong.