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Utah, The Nation’s Bankruptcy Capital
By: Charles Essmeier
Congress recently passed the Bankruptcy Abuse Prevention and Consumer Protection
Act, designed to minimize frivolous bankruptcy filings and to require debtors to
repay some of their debt. Once it takes effect in October, 2005, the law will
make it harder for those with problem debt to have their debt wiped away by the
courts. Most will have to agree to a five-year repayment plan. In passing this
new law, members of Congress suggested that our bankruptcy courts are filled
with cases involving not ordinary citizens, but with reckless gamblers,
shoppers, and drug abusers. Is that really the case?
One would think, given the accusations, that the highest bankruptcy rate in the
Untied States would be in place where such vices were common, such as
California, New York or even Nevada. If problem gambling is thought to be the
cause of so much bankruptcy, then one might assume that Las Vegas would be the
bankruptcy capital of the world. How odd it is, then, to discover that Utah, one
of only two states that prohibits gambling completely, has the highest per
capita incidence of bankruptcy filings in the United States. Utah? How can that
be?
# Utah has a number of aspects that, taken on their own, don’t suggest that
bankruptcy would be a problem. Added together, however, these things create a
recipe for disaster:Utah has the nation’s highest birthrate. Seventy percent of
the citizens of Utah are members of the Church of Jesus Christ of Latter-Day
Saints, and members are encouraged to have large families. It costs more to
feed, clothe and house a large family than a small one.
# Utah has more families with only one wager earner. Large families mean more
stay-at-home moms, so a lot of families must get by on a single paycheck.
# Utah’s wages are lower than average. Many high tech companies have relocated
to Utah in recent years, but the “high tech” jobs they provide are often
telephone customer service jobs, which typically pay $8-10 per hour.
# Members of the LDS Church are expected to tithe 10% of their income to the
Church.
# While Utah’s home prices are not among the highest nationally, they are fairly
high when compared to the average wage within the state.
The combination of large families, fewer workers per family, church donations
and low wages have contributed to an economic environment that makes it very
hard for many Utahns to stay afloat financially. This is in direct contrast with
the arguments put forth by Congress when the new bankruptcy law was proposed,
which suggested that most people filing for bankruptcy are simply irresponsible.
For many hard-working people in Utah, the new law will make it harder than ever
to make ends meet.
About the Author:
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro
Marketing, a firm devoted to informational Websites, including http://www.End-Your-Debt.com,
a site devoted to debt consolidation and credit counseling, and http://www.StructuredSettlementHelp.com,
a site devoted to information regarding structured settlements. |
