It seems that the federal government is hedging many of their economic recovery plans on helping people to purchase homes and stay in their existing homes. A good deal of stimulus money has been set aside for helping home owners modify their existing mortgages or first time buyers get into homes; but the rising rates of personal bankruptcy is rocking the boat on home buying and mortgage paying.
Personal bankruptcy has increased this month and we are right on track to have the highest levels of personal bankruptcy in four years when the rules of Chapter 7 bankruptcy changed and many people. This problem is compounded by a large increase in business bankruptcies as well. The American Bankruptcy Institute reports that the total number of bankruptcies in America have risen by 30% over last year; this is a massive blow to the recovering economy as people who have no money to spend are hard pressed to spend anything on stimulating the economy with purchasing.
Needless to say, the more people who file for bankruptcy, the more prospective buyers who will be taken out of the pool of prospective home buyers; these people will join all the other Americans who can