Exorbitant interest rates and fees that quickly accumulate upon default have left more families than ever vulnerable to a financial death spiral when they experience even a short term drop in income or an emergency expense that disrupts their debt payments.
Aggressive creditors regularly threaten to throw debtors’ lives into chaos, garnishments, collection harassment, and utility shut-offs.
In many cases bankruptcy is the only option that will bring order, rational planning and permanent or at least temporary relief to people who are under immense financial pressure. Bankruptcy provides an effective means of leveling the playing field between debtors and creditors, and it can profoundly improve the well-being of individuals and families.
Bankruptcy gives people an opportunity to reorder their finances and obtain a fresh start.
Although the 2005 bankruptcy legislation enacted by Congress made bankruptcy more cumbersome, more costly and, in some cases, less effective, it did not change the stark economic realities that drive people to need bankruptcy relief.
Above from Consumer Bankruptcy Law and Practice, National Consumer Law Center
http://www.consumerlaw.org