NYT: Debtors in Rush to File for Bankruptcy as Oct. Deadline Approaches

[flpoljunkie]

http://www.nytimes.com/2005/08/21/national/21bankruptcy.html?ei=5094&en=af11614bf9f4fe80&hp=&ex=1124596800&partner=homepage&pagewanted=print

August 21, 2005

Debtors in Rush to Bankruptcy as Change Nears

By TIMOTHY EGAN

BOISE, Idaho - Rushing to beat an October deadline when the biggest overhaul of the bankruptcy law in a quarter century goes into effect, rising numbers of Americans have filed for protection in the four months since the law was changed, seeking to have their debts erased.

Since President Bush signed the new law in April, bankruptcy filings have jumped, particularly in the heartland. Filings in the four months through July are up 17 percent this year over last in Cleveland, 14 percent in Milwaukee and 22 percent in northern Iowa, according to court filings, matching similar patterns in the Midwest and parts of the South and rural West. Courts in Indiana, Nebraska, Ohio, Tennessee, Texas and Wisconsin, among other places, report that people are hurrying into bankruptcy in numbers rarely seen.

<>Families with children are three times more likely to file as those without, according to studies done by Elizabeth Warren of Harvard Law School and others, and more than 80 percent of them cite job loss, medical problems or family breakup as the reason.

<>Consumer groups say the law will only make matters worse for the large number of families who are not abusing the system. They say families will be stuck in "debtor's prison without walls," as the Consumer Federation of America, which fought the new bill, calls it.

[wli]

1. the debtors' prison walls will go up soon enough

Prison: Bushler's solution to unemployment and the housing bubble.