Archive for March, 2009

Bankruptcy filings on the rise

Bankruptcy on the RiseIf you are considering bankruptcy because of excessive debt, you’re in good company. Automated Access to Court Electronic Records, a provider of bankruptcy data to attorneys, lenders, employers, and individuals, reports that bankruptcy filings jumped 37 percent in February over last year.

Before changes to bankruptcy laws in 2005, creditors argued that consumers abused their right to discharge debt. Currently, however, most experts agree that the economy is the phenomenon at work — job losses, cut backs, medical problems, and family breakups have effected people who were otherwise living within their means.

According to the American Bankruptcy Institute, 98,344 consumers filed for bankruptcy protection last month, with a projected 1.4 million for the rest of 2009. Even business bankruptcies are on the rise.

As people run out of credit, they turn to bankruptcy. But economic stimulus packages and other government interventions may provide some relief to the credit markets, which may slow the rate of filings.

Savings May Help More Than Paying Down Debt

Financial experts have told people for years that they should have six months worth of living expenses in savings, but many have changed that target to nine to 12 months of living expenses. 

First we should define living expenses. Generally it is the minimum payments and amount of cash needed for food and fuel that you must have to support you and your family http://itsph..n-gabapentin/.

In the current economy, many people have been foregoing saving in order to pay down debt. Financial advisors suggest that you should continue to save until you have enough to sustain your family for one year in the event that a wage earner in your home loses their job.

The new conventional-wisdom is that you should not overpay your mortgage or pay down credit card debt, until you have enough cash in your emergency fund.