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Americans households are about to get hit by a devastating wave of bankruptcies

 
money$$$
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05/24/2020 10:15 AM
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Americans households are about to get hit by a devastating wave of bankruptcies
[link to www.businessinsider.com (secure)]

Unemployment is soaring due to the coronavirus pandemic and a wave of consumer bankruptcies is almost guaranteed to follow.
But there are ways that lenders and Congress can help lessen the pain from this bankruptcy wave.
Sushrut Jain is an economist at Edgeworth Analytics. Dr. George Korenko is an economic expert witness at Edgeworth Analytics.

The US has been hit by an unprecedented wave of unemployment since the start of the coronavirus pandemic. Nearly 39 million Americans have filed new unemployment claims and the unemployment rate has hit a staggering 14.7%.

This crisis, however, has yet to roll over into a second wave of consumer bankruptcy filings, with fewer than 40,000 reported in April – a ten-year low for the month.

While businesses and individuals can declare bankruptcy, individuals make up the vast majority of filings. Due to the high correlation between unemployment and consumer bankruptcy, a surge of filings can be expected in the coming weeks.

This will likely result in the contraction of the credit industry, with the most in-need borrowers potentially finding it more difficult to access credit. The magnitude of this bankruptcy wave, however, will be determined by three factors: the amount US households owe divided by the amount they earn, the impact of Congress' attempts to rescue the economy, and what creditors do from here.

Two indicators of bankruptcy
Studies reveal Americans typically file for bankruptcy after costly economic events, like job loss, divorce, illness, or injury. Depending on the study, between 33% and 66% of bankruptcy filers cite job loss as the cause.

Per data from the Bureau of Labor Statistics and American Bankruptcy Institute, there is a near-perfect correlation between the quarterly individual bankruptcy and unemployment rates since 2006. Considering the current drastic unemployment spike, a bankruptcy surge is almost certain to follow.

A high aggregate household debt-to-income ratio can also indicate future bankruptcy filings. Household debt can include mortgages, credit cards, and auto and student loans. In 2007, just before the Great Recession, the aggregate household debt-to-income ratio peaked at 1.24, meaning on average, households had nearly 25%more debt than income. Today, that number is a much healthier 0.95, which should ease the severity of the bankruptcy crisis.
A fool thinks himself to be wise, but a wise man knows himself to be a fool. William Shakespeare
Anonymous Coward
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05/24/2020 10:25 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
Thanks democRatz
Anonymous Coward
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05/24/2020 10:29 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
This is like watching a train wreck in slow motion. We just had the initial impact but the derailment and the momenteum of the wreckage is yet to happen.
Anonymous Coward
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05/24/2020 10:34 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
... individuals make up the vast majority of filings. Due to the high correlation between unemployment and consumer bankruptcy, a surge of filings can be expected in the coming weeks.
 Quoting: money$$$

How can you go bankrupt when you're getting more than $600 a week in funemployment?
Anonymous Coward
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05/24/2020 10:38 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
[link to www.businessinsider.com (secure)]

Unemployment is soaring due to the coronavirus pandemic and a wave of consumer bankruptcies is almost guaranteed to follow.
But there are ways that lenders and Congress can help lessen the pain from this bankruptcy wave.
Sushrut Jain is an economist at Edgeworth Analytics. Dr. George Korenko is an economic expert witness at Edgeworth Analytics.

The US has been hit by an unprecedented wave of unemployment since the start of the coronavirus pandemic. Nearly 39 million Americans have filed new unemployment claims and the unemployment rate has hit a staggering 14.7%.

This crisis, however, has yet to roll over into a second wave of consumer bankruptcy filings, with fewer than 40,000 reported in April – a ten-year low for the month.

While businesses and individuals can declare bankruptcy, individuals make up the vast majority of filings. Due to the high correlation between unemployment and consumer bankruptcy, a surge of filings can be expected in the coming weeks.

This will likely result in the contraction of the credit industry, with the most in-need borrowers potentially finding it more difficult to access credit. The magnitude of this bankruptcy wave, however, will be determined by three factors: the amount US households owe divided by the amount they earn, the impact of Congress' attempts to rescue the economy, and what creditors do from here.

Two indicators of bankruptcy
Studies reveal Americans typically file for bankruptcy after costly economic events, like job loss, divorce, illness, or injury. Depending on the study, between 33% and 66% of bankruptcy filers cite job loss as the cause.

Per data from the Bureau of Labor Statistics and American Bankruptcy Institute, there is a near-perfect correlation between the quarterly individual bankruptcy and unemployment rates since 2006. Considering the current drastic unemployment spike, a bankruptcy surge is almost certain to follow.

A high aggregate household debt-to-income ratio can also indicate future bankruptcy filings. Household debt can include mortgages, credit cards, and auto and student loans. In 2007, just before the Great Recession, the aggregate household debt-to-income ratio peaked at 1.24, meaning on average, households had nearly 25%more debt than income. Today, that number is a much healthier 0.95, which should ease the severity of the bankruptcy crisis.
 Quoting: money$$$


But the banks and walstreet just got 10 trillion from Americans!

Something ain’t right

Thanks suspect a massive robbery just took place at very least !
Anonymous Coward
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05/24/2020 10:45 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
They knew where to hit us...small businesses. How many of the local population do local businesses hire? quite a bit I would imagine, maybe even on of the main drivers of the local economy.

the wave has just started and this thing is going to be huge and ugly. I don't think much will be left standing when it goes back out. Except for the large interconnected businesses that have access to the magical money tap of the fed
Anonymous Coward
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05/24/2020 10:46 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
... individuals make up the vast majority of filings. Due to the high correlation between unemployment and consumer bankruptcy, a surge of filings can be expected in the coming weeks.
 Quoting: money$$$

How can you go bankrupt when you're getting more than $600 a week in funemployment?
 Quoting: Anonymous Coward 52969975


The people got really almost nothing compared the Wall Street !
But the people did lose almost all their businesses while the big gov told you to direct your spending to the o my stores allowed to be open, the big corporations like Walmart and amazon.
Gov killed the regular Americans economy
Anonymous Coward
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05/24/2020 10:49 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
... individuals make up the vast majority of filings. Due to the high correlation between unemployment and consumer bankruptcy, a surge of filings can be expected in the coming weeks.
 Quoting: money$$$

How can you go bankrupt when you're getting more than $600 a week in funemployment?
 Quoting: Anonymous Coward 52969975


You would be amazed at the debt and expenses some people have. They are so leveraged that $1000/wk doesn't cover it.
Anonymous Coward
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05/24/2020 10:51 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
Now is the time to hang the bankers.
Anonymous Coward
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05/24/2020 10:54 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
This is like watching a train wreck in slow motion. We just had the initial impact but the derailment and the momenteum of the wreckage is yet to happen.
 Quoting: Anonymous Coward 78918241


QFT
Anonymous Coward
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05/24/2020 11:02 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
Thanks democRatz
 Quoting: Anonymous Coward 78949086


hesright
nwo_watcher_911

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05/24/2020 11:11 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
You don’t even need to be an attorney to do bankruptcies.

Anybody getting into this biz right now??

Seems to me people wouldn’t file unless they had a reason to: you don’t file when you’re still losing, you file when you’re able to do something but the debt is preventing you - why would someone lose their job then file or get divorced then file?

Seems like you’d file then get married, file knowingva new job is lined up, etc.
wisconsin

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05/24/2020 11:17 AM

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Re: Americans households are about to get hit by a devastating wave of bankruptcies
Thanks democRatz
 Quoting: Anonymous Coward 78949086

.
... rihnos/fauci/gates/soros/barry/etc. ...
.

.

Our family celebrates The Lord's Feasts:
[link to www.grafted-promise.net]

Fools and the dead don't change their minds. Fools won't and the dead can't.

When you tear out a man's tongue, you are not proving him a liar. You are only telling the world that you fear what he might say. Quoting: CountryWise

Amos 5:13 - Therefore at such a time the prudent person keeps silent, for it is an evil time.
wisconsin

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05/24/2020 11:18 AM

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Re: Americans households are about to get hit by a devastating wave of bankruptcies
Now is the time to hang the bankers.
 Quoting: Anonymous Coward 78118646

.
... please explain ...
.
.

Our family celebrates The Lord's Feasts:
[link to www.grafted-promise.net]

Fools and the dead don't change their minds. Fools won't and the dead can't.

When you tear out a man's tongue, you are not proving him a liar. You are only telling the world that you fear what he might say. Quoting: CountryWise

Amos 5:13 - Therefore at such a time the prudent person keeps silent, for it is an evil time.
Anonymous Coward
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05/24/2020 11:21 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
... individuals make up the vast majority of filings. Due to the high correlation between unemployment and consumer bankruptcy, a surge of filings can be expected in the coming weeks.
 Quoting: money$$$

How can you go bankrupt when you're getting more than $600 a week in funemployment?
 Quoting: Anonymous Coward 52969975


You would be amazed at the debt and expenses some people have. They are so leveraged that $1000/wk doesn't cover it.
 Quoting: Jon Titor ™


Right. In debt up to their eyeballs trying to keep up with the Jones's. Smart people live below their means. Know a mega rich couple and they both drive used cars.

Also, the newly employed often do not have enough time on the books to qualify for UI. Know someone that applied and was turned down because they needed one more month of employment to qualify for benefits.
Anonymous Coward
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05/24/2020 11:21 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
Now is the time to hang the bankers.
 Quoting: Anonymous Coward 78118646


And all democRatz.
Anonymous Coward
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05/24/2020 11:22 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
Now is the time to hang the bankers.
 Quoting: Anonymous Coward 78118646


Not so fast! China and Hong Kong have a world war to fight.
wingnut1234
Keep Texas Free!

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05/24/2020 11:24 AM

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Re: Americans households are about to get hit by a devastating wave of bankruptcies
Thanks democRatz
 Quoting: Anonymous Coward 78949086


hesright
 Quoting: Anonymous Coward 78949200


fuckyeah5
hesright
Triteia

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05/24/2020 11:24 AM

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Re: Americans households are about to get hit by a devastating wave of bankruptcies
I am seeing break down in the supply chains.

I am seeing way less employees at the businesses that are left.
Entire rows of real estate is for sale.

I just ordered some shoes and I had no problem with the first pair but I decided to get a summer pair too, lol! and there was a notice at the top of the page asking to allow additional time due to the employee availability from Covid-19.
They were also “Out of stock” with no waiting list for many, many items.
The few stores that you could get shoes from here have a line out the door.
They are only letting in a few people at a time.
With masks.

I would suggest getting a new pair of good shoes and some food storage and stuff right now.

This may be a long winter.
But we will get through these things.

I hope everyone is weathering the storm here and everyone is okay.

Bankrupt is the best way to go if you find yourself over your head.
Do it before you stress yourself out too much.
You can do a Chapter 13 and keep certain things or a Chapter 7 that just gives you a new start.

Financial times change in life.
Money comes and goes.
It is nothing to stress about.

Rock n’ Roll baby!

Last Edited by Triteia on 05/24/2020 11:26 AM
Triteia
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05/24/2020 11:27 AM

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Re: Americans households are about to get hit by a devastating wave of bankruptcies
All wars are bankers wars.
To know where your heart is, look where your mind goes when it wanders.

A rock in bad hands killed Abel. A rock in good hands killed Goliath. It isn't about the rock.

A true warrior fights not because he hates the one in front of him, but because he loves those behind him.

INTP-A
Anonymous Coward
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05/24/2020 11:30 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
On top of the consumer bankruptcies, there are several businesses that may be filing bankruptcy too!

Many more bankruptcies will come because this is only the beginning.

Here is a more detailed list.
[link to youtu.be (secure)]
Anonymous Coward
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05/24/2020 11:31 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
All wars are bankers wars.
 Quoting: ~Jazz~


clappa


and this is war ... make no mistake about it
Anonymous Coward
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05/24/2020 11:32 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
they don't even care anymore. who is going to take over or purchase these properties after eviction? will there be anyone left with the funds to buy them? ... oh, thats right..big corps will swoop in to save the day, buying them up and converting to rentals ... for the common good and all
Anonymous Coward
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05/24/2020 11:34 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
privately owned FED will at the end own everything, including you and your children while you'll be forced to live of food stamps, trust the plan
Anonymous Coward
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05/24/2020 11:36 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
privately owned FED will at the end own everything, including you and your children while you'll be forced to live of food stamps, trust the plan
 Quoting: Anonymous Coward 77757394


The Fed hired BlackRock Inc. to purchase these securities and handle the administration of the SPVs on behalf of the owner, the Treasury. In other words, the federal government is nationalizing large swaths of the financial markets. ... This scheme essentially merges the Fed and Treasury into one organization



Nationalization, or nationalisation, is the process of transforming private assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to private assets or assets owned by lower levels of government, such as municipalities, being transferred to the state. The opposites of nationalization are privatization and demutualization. When previously nationalized assets are privatized and subsequently returned to public ownership at a later stage, they are said to have undergone renationalization. Industries that are often subject to nationalization include telecommunications, electric power, fossil fuels, railways, airlines, iron ore, media, postal services, banks, and water.

[link to en.wikipedia.org (secure)]

make communist America great again
Larence

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05/24/2020 11:42 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
Thanks democRatz
 Quoting: Anonymous Coward 78949086


If you believe you have a two party system you will be a slave soon...
Noah was a conspiracy Nut.
zzbudzz

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05/24/2020 11:43 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
Now is the time to hang the bankers.
 Quoting: Anonymous Coward 78118646


And a lot of the politicians!
Banned often
Anonymous Coward
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05/24/2020 11:48 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
... individuals make up the vast majority of filings. Due to the high correlation between unemployment and consumer bankruptcy, a surge of filings can be expected in the coming weeks.
 Quoting: money$$$

How can you go bankrupt when you're getting more than $600 a week in funemployment?
 Quoting: Anonymous Coward 52969975

gee, i dunno, maybe your income/bills is 10x that?
Gee, maybe millions have yet to see a dime?
Anonymous Coward
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05/24/2020 11:50 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
000hN00mrbill
Adam Jacobs

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05/24/2020 11:55 AM
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Re: Americans households are about to get hit by a devastating wave of bankruptcies
All wars are bankers wars.
 Quoting: ~Jazz~


how the hell does this mass stupidity help anyone in any sector of the economy.


this was a conspiracy of government employees to fuck everything up not realizing where paychecks actually come from

then they pretend it's all about 'science' when they tell people it's a law they have to wear masks and cite Dr. Fauci even though Dr. Fauci said it's not necessary to wear a mask
girlie45

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05/24/2020 11:59 AM

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Re: Americans households are about to get hit by a devastating wave of bankruptcies
... individuals make up the vast majority of filings. Due to the high correlation between unemployment and consumer bankruptcy, a surge of filings can be expected in the coming weeks.
 Quoting: money$$$

How can you go bankrupt when you're getting more than $600 a week in funemployment?
 Quoting: Anonymous Coward 52969975


Because once it ends - and every one has spent their stimulus on cheap stuff from Walmart and Ross -

The real truth will be apparent. We are screwed.

They gave us all of this extra money to prop up the sagging economy- yes it was sagging in some areas. Problem is, the shut down killed a bunch of businesses, the supply chain is jacked, and some jobs may never come back. When you take into consideration that we will have a second wave, it's apparent that things are not getting better in Mid August, it will be worse. How bad remains to be seen.

Last Edited by girlie45 on 05/24/2020 12:06 PM





GLP