Personal bankruptcy is an option when an individual has too much debt and cannot keep up with their financial obligations. The US Bankruptcy Code was amended in 2005 and added new requirements for those filing bankruptcy. As a result, many fewer Americans filed bankruptcy in 2006. However, the housing market bust, recession, credit crunch and other factors in personal finance are driving the rate of bankruptcy back up, despite the changes in the law.
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I think it is funny that the “industry” worked so hard to change the bankruptcy code and now those levels are returning. For the life of me I have NO idea why anyone would continue to pay on an underwater mortgage or an unsecured debt. Of course one would want to make sure that you are laywered up as states laws vary greatly. The moral hazzards created to bailout the big boys in 2008-09 are going to become rampant in the next few years.