What factors make someone more likely to file for bankruptcy? Is it their race? Is it their religion? Is it their age group? Could it be because they are poor? Because they are whealthy?
A new study, conducted at Brigham Young University, demonstrates that high bankruptcy rates are directly tied to state policy. http://byunews.byu.edu/archive09-Jun-bankruptcy.aspx
The study shows that bankruptcy rates depend on the state's law. Some states garnish wages for debts owed while some do not. Other states report bankruptcies while some show it as an informal debt. The study demonstrates that these 2 factors would account for 50% of bankruptcies.
In the book "The Tipping Point," author Malcolm Gladwell illustrates how people's behaviors can be effectively enhanced by changing their environment. Utah had the highest bankruptcy rate back in 1999-2000. Was this because the people were more flaky? No, it was the laws regarding bankruptcy and garnishment. It can all be curbed.
In Utah about half of bankrutpcies result in a foreclosure. In order to curb foreclosures and bankruptcies, we need to revisit the laws surrounding them.
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