Personal Bankruptcies Continue to Rise -- Consumer Tips to Avoid Money Problems in an Uncertain Economy

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Personal bankruptcies have risen nearly thirty percent since March of last year. Consumer debt levels are consistent with the number of bankruptcy filings, which is more bad news for America. Howard Dvorkin, CPA, author, and founder of the nonprofit Consolidated Credit Counseling Services offers advice.

Many American's are living on the financial edge, then something happens -- divorce, accident, job loss -- and the trouble starts

Personal bankruptcies have risen nearly thirty percent since March of last year. Consumer debt levels are consistent with the number of bankruptcy filings, which is more bad news for America. Howard Dvorkin, CPA, author, and founder of the nonprofit Consolidated Credit Counseling Services offers advice.

The number of chapter 7 bankruptcies, where all debt is liquidated, rose 36% as of March 2008. Bankruptcy statistics released yesterday indicate that there are 146,721 more Chapter 7 bankruptcies than last year and the total non-business filings is 871,186. for the twelve month period ending March 31, 2008.

The states reporting the highest number of bankruptcy filings are Tennessee, Alabama, Georgia, and Indiana.* "This unprecedented level of debt poses a serious risk to the financial health of Americans. A high level of indebtedness could lead to increased delinquencies and even more bankruptcies," says Howard Dvorkin, debt analyst and founder of the nonprofit organization Consolidated Credit Counseling Services, Inc.

The bigger problem, the one that has caused the number of personal bankruptcies to balloon, is the ARM mortgage crisis and the simple fact that people are extended more credit than they can handle. "Many American's are living on the financial edge, then something happens -- divorce, accident, job loss -- and the trouble starts," Dvorkin continued.

Debt counselors encourage people who are having financial trouble to seek help. Ignoring a financial problem will only make things worse. Counselors at Consolidated Credit Counseling Services offer these tips:

  • Call your creditors before you get in too deep. Most creditors will work with you if circumstances such as a job loss, divorce, or illness have made it temporarily difficult for you to meet your financial obligations.
  • Start to live on cash and stop incurring new credit card debt. Don't pay extra money on your mortgage, don't eat out twice a week, don't do the daily latte, until you get that debt paid off.
  • Track your spending and carefully prepare a budget. After seeing where you are spending your money, decide where to cut back and use the extra money to pay down your debt. (a free budgeting guide can be found at http://www.ConsolidatedCredit.org)
  • Make sure you're adequately covered by insurance including medical, homeowners, and auto.

If you are having a hard time paying your bills, find out about Debt Management Programs by calling 1-800-728-3632. A counselor can organize debts into one low monthly payment, reduce or eliminate interest charges, and help restore credit ratings.

For more information on personal finance issues please visit http://www.consolidatedcredit.org/.

Consolidated Credit Counseling Service's mission is to help people end financial crisis and solve money problems through education and professional counseling. Consolidated Credit is an industry leader that provides credit counseling and debt management services throughout the United States. Consolidated Credit is a non-profit agency that has helped thousands of individuals and families deal with life-altering credit, debt, and financial issues.

*Number of bankruptcies per thousand population during the 12 month period ending 4/08

April Lewis-Parks
Director of Community and Media Relations
Consolidated Credit Counseling Services, Inc.
954-377-9344 FAX 954-377-9711 Cell 954-326-1671
http://www.consolidatedcredit.org

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