Economists with the National Bureau of Economic Research recently examined a half million bankruptcy filings in the United States in order to evaluate the effect of bankruptcy laws on consumers.
They have confirmed what many consumers in Washington and Oregon have long suspected. Namely that the bankruptcy code is an incredibly effective social insurance policy. Specifically found that confirmation of a Chapter 13 bankruptcy plan increases annual earnings by nearly six thousand dollars a year, decreases five-year mortality by 1.2 percentage points, and decreases five-year foreclosure rates by nearly twenty percent.
The authors found that the removal of the disincentive to work resulting from creditors garnishing worker’s paychecks resulted in workers putting in more hours. Moreover, mortality rates declined because resolution of debt issues significantly reduced stress. Finally, because chapter 13 bankruptcy stops foreclosure and gives debtors a means by which they can catch up on their mortgages, foreclosures over all declined significantly.
If you live in Oregon or Washington and are coping with the stress of living with a greater debt burden than you can handle, it is time to get help. The upside to filing bankruptcy is almost always greater than you can even imagine. Please feel free to call me or set an appointment at our Portland, Salem or Vancouver offices.
