I’ve been working as a bankruptcy attorney in Indiana for more years than I care to count. Try as I might, I can’t remember any time in the past when there were more stories in the paper and on TV and radio news about debt, bankruptcy and foreclosures than there are now.
Used to be, there were people who needed debt help. They showed up in my office and we worked together on a plan to get their financial affairs back on track. Sometimes that meant filing bankruptcy, sometimes it meant a budgeting plan, sometimes it meant I helped them negotiate with creditors, consolidate debt, downsize to a smaller home, or a combination of all these strategies. Despite the fear that “Everybody will know I’m in money trouble,” my work was mostly a very private affair between me, the client, and the courts. My work with specific clients still is a very private affair, but it seems the subject of debt, foreclosure, and bankruptcy has become the kind of stuff newspaper, magazine, and TV and radio reports write about routinely.
Why is the public all of a sudden interested in bankruptcies and foreclosures? Just in this past week alone, two important investor publications, Fortune and Moody’s Investors Service, ran big stories about the number of foreclosures and bankruptcies going on in the country. What’s behind all this interest?
First of all, mortgages don’t stay with the same lender, but are usually packaged with thousands of other mortgages into securities that investors buy. So now many, many people who are not filing bankruptcy are affected by those who are.
Second thing is, as more and more people are squeezed by rising rates on their mortgages, they’re starting to take cash advances on their credit cards. Some of the giant financial companies are starting to prepare to take big losses on their credit card loans. That, in turn, affects how many people these big companies hire or lay off, and how much advertising they buy or don’t buy. So now, all of the business community starts to feel the pinch and that’s something investors are very concerned about.
Despite all this media “noise”, as a bankruptcy attorney in Indiana, I just keep on helping people deal with their debt problems, and as always, I do it one person and one family at a time.
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This post was written by Mark