washingtonpost.com — Despite the 2005 passage of a law that made it more difficult and expensive to
file for personal bankruptcy, more Americans are choosing bankruptcy over
destitution. Filings — including Chapter 7, which wipes out debt, and Chapter
13, which reorganizes it — totaled 822,590 last year, up 38 percent from 2006.
The numbers tell the story of a crippled economy, one in which people owe more
than they can pay to their creditors. And it's one more disturbing chapter in
the subprime mortgage crisis, in which homeowners unable to handle higher
interest payments on their adjustable rate mortgages are turning to bankruptcy
to avoid foreclosure.