We are certainly a Section with the potential for tremendous growth.

Bankruptcy filings will set another record for 1996 as everyone anticipates filings to exceed 1 million cases this year for the first time ever. And this is the year in which, according to the government and financial markets and the general public perception as reported by the media, the 2.5% growth rate for the year is being touted as a good economy".

Even more astounding is the fact that at least one source is estimating that this new record will be doubled in 1997. This situation gives rise to several questions. 1. Why has there been such a tremendous increase in case filings? 2. Can this trend continue? 3. Should this trend continue? Assuming the trend should not continue, how can the trend be altered or remedied? All of the answers to these questions at least in so far as they are set out in this brief article are speculative and hypothetical and lack any scientific or tested factual basis. In fact, they are principally the opinions of the author developed over the years of practice in the field, representing creditor clients.

I will take as my initial premise the view that bankruptcy is not a good thing, i.e., bankruptcy is not a thing that an individual desires but that bankruptcy is born out of necessity, that it is the last straw when there is no other alternative. Thus, it is my view that there are too many bankruptcy filings and that something needs to be done to curb the record trend.

To that end, we will look at the possible reasons for the tremendous increase in filings. As already mentioned, the filings are increasing despite economic growth. They are not the result of an economic recession. Common arguments for the rise include (1) ease of credit standards, (2) the proliferation of attorney advertising previously prohibited and (3) societies changed view toward the value of saving. One thing appears certain and that is the fact that the stigma surrounding bankruptcy is rapidly fading, if it still exists at all. When consumers face a constant barrage of bankruptcy ads encouraging them to file bankruptcy and touting its benefits, it becomes much more acceptable. This is especially disturbing when 39% of current bankrupt debtors are current on their credit card bills at the time they file bankruptcy. This certainly does not sound like a last resort.

I believe these ads do the public a disservice by not advising them that the filing may make it more difficult to obtain future credit or it may make the cost of that credit higher. It may also result in t inability to obtain some jobs. Final believe ad references to wage earner p with no mention of the word bankrupt are a misrepresentation and are deceiving to the public.

Education is the key to the long term solution of the bankruptcy problem. People need to be taught financial management, budgeting and the effect bankruptcy. With regard to debt relief, people should be advised of state exemption laws which may provide al the legal protections they require with the cost and complexities of bankruptcy,

Chapter 13 is definitely not the answer While it looks good in theory, it fails miserably in practice. The idea the debtor can keep their most valuable ass (house and car) and repay the credit through a restructured payment plan sounds good. However, when approximately two of every three Chapter 13 plans actually make it through completion, there is something fundamentally wrong with the system. Additionally, any system which has repercussion or punishment for fraud invites abuse. If Chapter 13 is to remain viable, major revisions are necessary.

I invite those with concurring or dissent) view to submit articles to me for possible inclusion in the next NLA newsletter.