Back in June, we discussed the increasing liabilities of Americans.
Some of that research has found its way onto the tube: Today, CNBC’s Sharon Epperson is looking at a surprising outgrowth of the increasing liabilities in the U.S. With signs that some of the wealthiest Americans under an increasing financial strain, She asks: Are the top 20% of wage earners finding themselves in an increasingly precarious financial situation?
Her segment should run some time on CNBC’s Squawkbox this morning Power Lunch this afternoon, and then be repeated throughout the day.
My curiousity on the subject raises an interesting question: Considering the recent Bankruptcy "Boom" how many of the new filers who raced to declare bankruptcy were from the top quintile? We tend to think of the bankrupt as working poor, but I wonder how true that is. (for more on the Bankruptcy "Boom," see this: Insolvency Epidemic and this: A Day of Last Resort)
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On a somewhat related note, yesterday’s NYT had an article outlining how the Size of Bankruptcy Bubble Surprised Banks; Here’s the Ubiq-cerpt:™
"Now that the new bankruptcy law has taken effect, was the investment worth it? The early data suggest that sometimes, you have to be careful what you wish for.
Bankruptcy filings were supposed to snowball in the months before the tough new law went into effect on Oct. 17. But the avalanche of petitions, and the lines of debtors streaming out the courthouse doors caught even the credit card issuers who supported the new law by surprise.
In recent days, the five biggest bank issuers of credit cards have said that the unexpectedly large flood of filings shaved hundreds of million of dollars off their earnings in the third quarter.
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Source:
Size of Bankruptcy Bubble Surprises Banks
ERIC DASH
NYT, October 25, 2005
http://www.nytimes.com/2005/10/25/business/25place.html
Not long ago I read that 85% went bankrupt because of divorce or illness.
It would have been great to have the government forcibly remove my liability to my debts… But as one of the people who’s worked hard to pay them off without help… I’m a little upset that I will be footing the bill for others inability to control their spending.
Chad: Shouldn’t we be upset at Citi, Chase et al. for not carring out their fiduciary responsibilities by vetting debtors for their ability to repay?
It is up to you if you foot the bill by borrowing from them. Never have and never will.
Some of that research has found its way onto the tube: Today, CNBC’s Sharon Epperson is looking at a surprising outgrowth of the increasing liabilities in the U.S. With signs that some of the wealthiest Americans under an increasing financial strain, She asks: Are the top 20% of wage earners finding themselves in an increasingly precarious financial situation?
HIGH INCOME IS NOT THE SAME AS WEALTH! THERE IS A DIFFERENCE AND IT’S IMPORTANT TO NOTE THAT.
Chad K: It’s not as simple as “control their spending”.
Bad things can happen to good people who need the protection of Federal Bankruptcy. For example, anyone can sue you for almost anything. Most civil actions never make it to court and should you be liable beyond your insurance coverages, falling back on bankruptcy can be a last resort……