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Utah, the Nation’s Bankruptcy Capital | Debt Consolidation Loans
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Utah, the Nation’s Bankruptcy Capital

Tip! The first step in learning how to file for bankruptcy is to make a comprehensive list of all of your creditors and outstanding debts. When you are working to determine how to file for bankruptcy, you need to appreciate that if you to proceed with a bankruptcy case, you must be sure that all of your debts are disclosed and listed in a bankruptcy petition.

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?

Tip! If I file for bankruptcy the trustee will seize all of my assets and sell them to settle my debts with creditors.

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.

    • Tip! You won’t lose everything that you have. While bankruptcy laws vary from state to state, every state has exemptions that protect certain kinds of assets, such as your clothes, household goods, your home and your car (up to a certain value) as well as qualified retirement plans.

  • 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.

    • Tip! bankruptcy is when you request complete debt relief.

  • 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.

    ©Copyright 2005 by Retro Marketing.

    Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation and credit counseling, and StructuredSettlementHelp.com, a site devoted to information regarding structured settlements.

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