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Florida Bankruptcy Act And The Florida Bankruptcy Code

A factor all bankruptcies share is overwhelming debt in relation to income. As credit has become more readily available to consumers of all financial backgrounds, Americans have taken on higher levels of debt. The exuberant 90’s, with endless optimism fueled by the stock market and high levels of employment, encouraged consumer borrowing. A slowing economy since 1999 has made it difficult to repay debt assumed during the previous decade. Many people are depending on credit to survive unemployment.

Bankruptcy laws and regulations are governed by Federal Bankruptcy Code. The US Administrative Office of the Courts compiles statistics on the number of filings; these data are limited to debt and provide meager demographic information.

Studies show that many consumers lack information about bankruptcy prior to contacting an attorney, learned little about managing their finances during the process, and many regret having filed. A multi-nation study of bankruptcy concluded that few debtors had considered any alternatives to bankruptcy before filing. One of the most comprehensive studies of consumer bankruptcies in the US concluded that the causes of bankruptcy are complex and related to (a) fundamental changes in the national economy that have contributed to income volatility and employment insecurity, (b) rising medical costs and lack of health insurance, (c) divorce and the growing number of single parent families, (d) the determination to maintain home ownership in the face of insupportable debt, and (e) a dramatic increase in debt at high interest rates.

Additional studies reported that the principle cause of bankruptcy was job loss exacerbated by burdensome consumer debt and meager savings. Less than one-third of families have an emergency savings fund to tide them through even a short period of unemployment. Lenders are granting credit cards to riskier borrowers who have more liberal attitudes toward debt, carry higher debt burdens and work in cyclical jobs with low job security.

Consumers need to know the way the credit marketing system works. Consumers, not lenders, are responsible for setting their own debt limits. Increased economic and employment volatility suggests that emergency reserves and or the ability to send an additional family member into the workforce may be critical to family financial survival.

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