Bankruptcy Filing Figures Drop, Bad News for a Bankruptcy Attorney

Recently, the bankruptcy filing rate was released and it shows that fewer Americans are filing bankruptcy to eliminate their debt. According to bankruptcy filing data, the number of Americans who filed for bankruptcy decreased compared to the same period last year that ended September 30, 2012. The largest decrease was for those who filed for bankruptcy. Chapter 7 bankruptcy, which declined about 15%. The number of Chapter 13 bankruptcy filings also decreased 10%. In 2010, the United States had a record number of 1.6 million people who filed for bankruptcy for numerous reasons. In 2011, the drop began to lower the rate to 1.47 million bankruptcies and now it has fallen again to 1,261,140. While this sounds like good news for the economy, it seems like bad news for a bankruptcy attorney.

Typically, most people file Chapter 7 bankruptcy over all other chapters. Due to changes to the bankruptcy code in 2005 and the housing bubble that burst in 2007, we have seen an increase in filings for Chapter 13 bankruptcy. Even though we had a slight decline last year, it is still much more than what has been historically. Many experts wonder what is happening in the world. Unemployment is now declared at 7.7%, which is low compared to the 8-9% it has been for the past four years. The Federal Reserve has responded quickly to the economic troubles the United States has had since 2007 with QE1, QE2, The Twist, QE3 and now QE4. All of this is nothing more than quantitative easing which, in short, is printing money to buy our way out of debt. In September, QE3 was announced with the printing of $ 40 billion a month to buy mortgage-backed securities. All quantitative easing programs previously had a time frame, but this is to infinity and beyond. When everyone thought this was crazy, QE4 came in last week for an additional $ 45 billion a month for the same reason. Again, there was no end point, except for Mr. Bernanke’s statement, where he said that the Federal Reserve would continue quantitative easing until unemployment figures fell to 6.5% or less.

Historically, quantitative easing has not worked for any country that has used it to get out of financial trouble. Did it work for the Weimar Republic when it tried from 1919 to 1923? No, and it won’t work here either. These monetary policies are nothing more than kicking the can in the road where at some point taxpayers will end up picking up the tab. The scary part is that the cost of reimbursement usually comes from hyperinflation and higher taxes, nothing like stabbing a stake through the heart of an already fragile economy. The more money that is printed, the less the coin is worth. Taking all the facts into account, even though the bankruptcy filing numbers have dropped, I think it is a matter of time before new records are set. I don’t think a bankruptcy attorney is really that concerned with his career choice. In the next few years, we will likely see an increase in the number of Americans losing their homes to foreclosure and many of them will also have to file for bankruptcy. Young adults currently attending law school should consider becoming bankruptcy attorneys because, the way the economy looks, their futures would be bright.