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Craig D. Robins, Esq. New York Bankruptcy Attorney, Longisland bankruptcy attorney

“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”

Craig D. Robins, Esq.

Consumer Bankruptcy: Bankruptcy has Become a Middle Class Phenomenon

Posted on Thursday (September 23, 2004) at 3:18 am to Bankruptcy and Society
Suffolk Lawyer

As the Journal reported, “debt burdens……are at record levels because families have been stretched to the limit in recent years. With more income going to housing and other rising expenses related to medical care, education, vehicles, child care, and so forth, families are relying on credit as a way to meet everyday needs. Remarkably, a family with two earners today actually has less discretionary income, after fixed costs like medical insurance and mortgage payments are accounted for, than did a family with only one breadwinner in the 1970’s.”

Common financial burdens that the middle class typically encounter include paying expensive tuition for their children, and supporting elderly parents with expensive medical requirements. When the family is overextended, all it takes is one major event (job loss, death of a family member, reduced ability to earn overtime salary, a serious medical problem, divorce, etc.) to take the family from a lucrative position to one requiring bankruptcy relief. To compound the dilemma, families facing such tragedies are increasingly unable to depend on built-up equity in their homes, as the recent boom in real estate values combined with historically low interest rates may have led them to refinance and withdraw large amounts of equity to meet previous financial needs.

In my own practice, I have seen many older, middle class parents get into risky financial situations by rushing to financially help their grown children with tuition assistance, payments for large weddings, or financial rescue from failed marriages and drug addictions.

Perhaps this country’s foremost authority on the sociology of Americans who file bankruptcy is Elizabeth Warren, a Harvard University bankruptcy law professor. In 2000 she co-authored a book, “The Fragile Middle Class,” and last year she co-authored another book, “The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke.” In the latter book she stated: “This year, more people will end up bankrupt than will suffer a heart attack. More adults will file for bankruptcy than will be diagnosed with cancer. More people will file for bankruptcy than will graduate from college. And, in an era when traditionalists decry the demise of the institution of marriage, Americans will file more petitions for bankruptcy than for divorce.”

Here are some statistics. Last year, household debt soared to $8.9 trillion, a record high relative to disposable income. In the last four years, home mortgage foreclosures increased 45 percent. Bankruptcy filings are at an all-time high. Personal bankruptcies peaked in 2003 with a record 1.6 million cases filed. That annual total is nearly double the 812,898 filings in 1993. The increase in filings by middle class debtors has greatly contributed to these record numbers.

Thus, we are now seeing that typical bankruptcy filers are neither poor nor rich; they are middle-class, middle-income Americans. The stereotypical bankruptcy debtor has changed.

About the Author. Long Island Bankruptcy Attorney Craig D. Robins, Esq., is a regular columnist for the Suffolk Lawyer, the official publication of the Suffolk County Bar Association in New York. This article appeared in the September 2004 issue of the Suffolk Lawyer. Mr. Robins is a bankruptcy lawyer who has represented thousands of consumer and business clients during the past twenty years. He has offices in Medford, Commack, Woodbury and Valley Stream. (516) 496-0800. For information about filing bankruptcy on Long Island, please visit his Bankruptcy web site: http://www.BankruptcyCanHelp.com.

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Craig D. Robins, Esq. is a Long Island bankruptcy lawyer, who is focused primarily on helping individuals and families, find solutions to their debt problems. Read more »


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Craig D. Robins, Esq.
35 Pinelawn Road, Suite 218E, Melville, NY 11747.

Tel : 516 - 496 - 0800