We are now experiencing the forefront of possible credit problems on the financial landscape horizon.
Personal bankruptcy filings this last quarter are up 12 percent from a year ago. Last year was a record high at 1.45 million, or now one in 100 people.
What is Causing the Increase in Bankruptcy?
- Borrowings that are rising faster than Americans’ income.
- The steep rise in insurance rates and medical premiums along with steep medical bills are plunging farm and non-farm individuals into dire financial straits.
- Two soybean and corn producers from Ohio indicated that annual medical coverage was over $12,000 per year. This is more than most house payments, folks!
- Approximately one half of all bankruptcy filings were because of medical debt.
- In Oklahoma, 30 percent of producers have no health insurance, similar to a trend in America that stands at 41 million Americans.
Bankruptcy has also increased because of smaller down payments on homes and cars. It’s easier to walk away! Doesn’t this sound like the land deals of the 1980s in American agriculture?
Americans have piled on record amounts of consumer debt at low rates using home equity loans. This is not sustainable!
The number of mortgages going into foreclosure is at a 30-year high with more than one in 20 loans late or delinquent.
- We need a national playoff system in college football.
- As budget cuts hit most state universities, administrators need to think outside the box! Why should classes be confined to weekdays? Evenings and weekend classes and short courses could better utilize the fixed cost in buildings.
- My e-mail address is: [email protected]
Editors' note: Dave Kohl, Soybean Digest Trends Editor, is an ag economist at Virginia Tech. He recently completed a sabbatical working with the Royal Bank of Canada. He is now back at Virginia Tech with his academic appointment, which is teaching, extension, and applied research.
To see Dave Kohl's previous road warrior adventures type Dave Kohl in the Search blank at the top of the page.
This online exclusive is brought to you by Soybean Digest