[socalgem]

An astounding 91,214 Americans declared bankruptcy in May, up 31% from the same month a year ago. More than 1 million Americans are expected to declare bankruptcy this year, a jump of nearly 50% from last year, according to the American Bankruptcy Institute.

That means at least one in every 100 families will be affected by a bankruptcy.

It's a sign of the times: a combination of the housing and mortgage crisis, consumer debt burdens and the strains that rising energy prices are putting on household budgets.

In the first three months of the year, 516,000 new foreclosure proceedings were started. The delinquency rate (homes with at least one payment past due, but not yet in foreclosure) for single-family mortgages is now 6.35%, the highest in modern times.

Americans are now carrying $975 billion in credit card debt -- a nearly 20% increase in the past two years. Approximately half of all cardholders carry a balance, instead of paying in full every month.

The national average for interest rates on credit card debt is 12.38%. Yet many cardholders are paying "default rates" as high as 31.99%, applied to people who are late on payments or over the limit.

The sharp increase in the unemployment rate to 5.5% in May, along with the loss of 66,000 private sector jobs, is a clear indication that more people will have more trouble paying their bills. The economic situation grows more dire daily.

[TropicalGal]

Thanks for sharing this. It's reality check time for a lot of people.

[Zophie]

Ouch. Amazing how all of the issues are affecting people. While I'm not shocked, it's still very sad.

[KCinPhilly]

I'm surprised that they did not mention medical bills. On oft quoted statistic is that most bankruptcies are due to medical bills.

[cbetht]

I'm not shocked either but yes it is very sad. I work for a bankruptcy law firm and it is amazing how much business has picked up this year. Our phones are literally ringing off the hook with new clients. And it's not just those that are less fortunate. It's everyone. We have clients that earn $200,000+ a year declaring bankruptcy.

KC, I too am surprised that medical bills are not mentioned.

[socalgem]

A few of my friends are BK attorneys and they are so busy. One friend told me they have 1000's of cases for people filing BK. Most of the cases file are Chap. 7.
A lot of older people are having to file and are losing their homes.
It is sad but it's going to be our reality for awhile.

[pursewatch]

It's sad to read about it but I'm not too surprised.

[lolitakali]

Another great thread!
It is an unfortunate reality that Americans have to deal with.

It is sad but also a "wake-up call" to many who still insist of spending like there is no tomorrow even if they do actually have the money today, does not mean they will not "need" that money they spend today for tomorrow (medical bills, rainy days etc.).

See, of all my friends, I am a KNOWN "miser" and today, I am absolutely loving that "title". Why? Every penny they spend to make the economy go round is every penny I save to make my love pile higher. When you love money that much, why would you not collect more of it?

[socalgem]

^I love enjoying my money, so I have fun with it. I also have a lot making money for me. So I get the best of both worlds.

[Zophie]

I love to spend money, but I also learned the hard way to never spend more than you have.