Connecticut Bankruptcy Law Blog

Filing for Chapter 7 bankruptcy protection does not give a consumer the right to rack up additional debt in the spirit of knowing those debts will soon be expunged. Not only is this dishonest, but it could throw a big wrench in the bankruptcy proceedings.

Some people will try to squeeze in some last-minute impulse shopping during the short time between when they file for bankruptcy to when creditors receive notice. Once creditors receive notice of the bankruptcy filing, they usually close off all lines of credit. Purchasing essential items for every day survival leading up to a bankruptcy is permissible, but loading up on high-end gadgets or a Caribbean cruise is not.

These days, consumers are inundated with bills and constantly being asked to submit monthly payments in order to stay current with their loans or lines of credit.

Credit card debt is only one piece of the debt puzzle along with things like home mortgages, auto loans and other kinds of unsecured debt. When the consumer finds themselves low on cash, they must prioritize their unpaid debts and choose which ones are worth paying. Of course, they can always wipe away some, if not all, of these debts by declaring bankruptcy.

Could it be possible that consumers in Connecticut and throughout the rest of the country are getting a better handle on one of the most debilitating forms of debt?

Information collected by Discover Financial Services certainly suggests this is true. The company, which is the sixth-largest credit card company in terms of spending, reports that men and women are turning to the plastic more in the first fiscal quarter of this year. While this might not paint a picture of fiscal responsibility, the fact that these same consumers are making better progress on paying down credit card debt does. This trend suggests that while consumers continue to use credit cards, they are doing so wisely.

A growing number of studies have confirmed that Black Americans in Connecticut, and elsewhere throughout the country, are pushed into declaring Chapter 13 bankruptcy over Chapter 7 at a rate that far surpasses any other ethnic group. What these studies have yet to prove is the fact that these are conscious efforts by financial establishments. Furthermore, the Black American community has made strides in personal bankruptcy overall, watching the number of Black Americans filing for personal bankruptcy steadily drop for the last few years.

According to the 2010 Annual Consumer Bankruptcy Demographics Report, Black Americans comprised 11.3 percent of all Americans who filed for bankruptcy that year. This was down from 15.4 percent the year before. Bankruptcies filed by Asian Americans and Hispanics spiked while the number for Native Americans and Caucasians remained relatively unchanged.