Pike bankruptcy statistics climb
MILFORD Pike County citizens, facing acute financial distress, filed for personal bankruptcy twice as frequently in 2007 than in 2006. Pike residents filed 135 bankruptcies in 2007, as compared to only 69 previous year. Records in the U.S. Middle District Bankruptcy Court in Wilkes-Barre show most people who filed for bankruptcy were beset by either high credit card debt, sub-prime mortgages with rising interest rates, uncovered medical bills or a sudden crisis like job loss. In the country as a whole, bankruptcy filings were up 40 percent last year as compared to 2006. Attorney Scott Amori, who handled the bankruptcy filings for several Pike County residents in 2007, attributes the sharp increase to “catastrophes like job loss, uninsured medical bills, and family dissolution.” “Some sub-prime mortgages are just bizarre,” Amori said. “I have a case where the family was loaned $260,000 with a $3400 mortgage, but there was only $2,400 total income per month,” said the baffled lawyer. Bankruptcy specialist Vincent Rubino, who handles many Pike bankruptcies, points out that there was a bulge of Pike bankruptcies in 2005 because the laws were stiffened and financially struggling Pike residents rushed to file before the stricter laws went into effect. The rush, he observed, tended to suppress the 2006 numbers. Yet, despite the stricter new rules that were designed to discourage bankruptcies, the variable mortgage rate resets in 2006 caused a renewed rush to the courts by customers seeking protection from creditors. There are several kinds of bankruptcy, including chapter 7 bankruptcy and chapter 13 bankruptcy. Chapter 7 bankruptcy is also known as liquidation, and allows you to give up your assets in exchange for the elimination of your debts. This is a legal proceeding and has to be done with an attorney. Assets can include anything from real estate, to cars to jewels. Certain bills will not get eliminated by Chapter 7 bankruptcy, including student loans, criminal fees, and child support payments. Clearly, doing this should be a last resort. It is a very complicated process and will be a part of your financial history for a long time to come. This filing will extensively damage your credit history and the bankruptcy itself will stay on your records for at least 10 years. This means that potential employers and lenders will be aware of your financial history, and might question your financial security in the future. Chapter 13 bankruptcy is different in that rather than taking your assets, the collectors allow you to restructure your debts and work out new payment plans. If this seems better than chapter 7, then you should know that the aftermath of chapter 13 usually lasts longer than chapter 7. It’s tough to give an accurate figure on how long chapter 13 will affect you since it very much depends on how much time you need to pay of your debts. It usually ends within a few years of the final repayments. As with chapter 7, it will very easy for people to know that you filed for bankruptcy, and your credit rating will be mangled for a long time. Considering bankruptcy? For situations where debts are overwhelming and there does not appear to be any hope of getting out from under, and your home and other asserts are at risk, experts agree that personal bankruptcy should be considered. The overall purpose of bankruptcy was explained in a Supreme Court decision as giving “the honest but unfortunate debtor a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.” An internet site explaining the process in layperson’s language is http://palawhelp.org/PA/. Bankruptcy is a somewhat complicated process that most usually is undertaken with the help of an attorney who is experienced in the field. The Pike County Bar Association has a directory of local attorneys that can be found online at http://www.pikebar.com/. Call 570- 296-3481. There is a bankruptcy court for each judicial district in the country. Pike’s is in Wilkes-Barre. Those considering bankruptcy should also learn about what steps can be taken to avoid filing. The federal Bankruptcy Code sets out the rules and procedures to be followed and citizens can study the code at www.uscourts.gov/bkforms/index.html.