Downward Spiral

This story appears today via Associated Press -

Personal bankruptcy filings up 30% last year
WASHINGTON (AP) — Personal bankruptcies soared 30% to a record high last year as financially strained people rushed to file before new restrictions took effect Oct. 17.

Bankruptcy petitions filed in federal courts totaled 2,039,214 in 2005, up from 1,563,145 in 2004, according to data released Friday by the Administrative Office of the U.S. Courts.

A new law, which brought the most comprehensive revision of the U.S. Bankruptcy Code in a quarter-century, made it more difficult to erase debts in bankruptcy. Before its enactment, the number of bankruptcy filings had been fairly stable.

The story close with this statistic -

The report by the National Association of Consumer Bankruptcy Attorneys was based on an analysis of 61,335 people who had gone to credit counseling agencies, the required first step under the new law before filing bankruptcy. Of the 61,335, 97% were unable to repay any debts and 79% had gotten into financial trouble because of job loss, huge medical expenses or the death of a spouse, the report said.

Passage of the new bankruptcy law came after eight years of strenuous efforts by congressional backers, banks and credit card companies. Supporters said the new provisions were needed to curb abuses of the bankruptcy system. Opponents said the changes would be especially hard on low-income working people, single mothers, minorities and the elderly and would remove a safety net for those who have lost their jobs or face mounting medical bills.

I recall hearing a report not long ago that claimed that most bankruptcies could have been avoided IF households that filed had been able to earn an additional $300 per month. $300. Will your program provide this sort of solution for average people easily?