Oklahoma is one of the top states in the number of bankruptcy filings. And, statistics show that bankruptcies are increasing in this part of the state.
Muskogee Attorney Gerald Miller, Chapter 7 trustee for bankruptcy cases in the Oklahoma Eastern District, said most people file bankruptcy about two years after they start getting into financial trouble.
“When the Bankruptcy Act (of 2005) was passed, there was about six months before it became effective,” he said. “And a lot of people filed during that time period that would have probably filed the following two years. Well, it’s been two years, and what we have seen has been a trend in increase every quarter since the act’s passage. We’re getting close to about where we were at before the bill was passed in a normal year.”
Miller said the act created additional hardship for many debtors.
“I know of at least two people who died because of the bill,” he said. “One person killed himself, and another person worked himself to death because he didn’t qualify.”
A graph compiled by the United States Bankruptcy Court, Eastern District of Oklahoma, shows a steady rise from 2,553 cases in 1999 to 4,905 in 2004. A spike of 7,109 cases occurred in late 2005 shortly before the Bankruptcy Act of 2005 went into effect. The act made filing for bankruptcy much more difficult.
After a drop down to levels similar to the mid-1980s, the numbers are now rising again. Miller says that is an inevitable return to the previous situation.
Miller said the Bankruptcy Act failed to stop people from filing for bankruptcy.
“The underlying causes of bankruptcy have not been addressed,” he said. “Those were: no health care insurance, loss of a job, loss of a spouse’s income through death or divorce, and gambling. Those underlying reasons have not changed, so all those people that filed in advance are gone, and now we’re two years out, and people in the next generation that is facing those same hardships are filing bankruptcy.”
Bankruptcies on the rise despite 2005 act
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