Released: October 17, 2006

People still seeking bankrutpcy protection

Source: By Kathleen Day, Washington Post (Free Registration)

Sharon Moore says life “felt like a whirlwind” after her seven-month-old restaurant in Portland, Maine, failed in February.

The 38-year-old single mother said she struggled to find work and keep up payments on a small-business loan and other debts that totaled more than $18,000. Late fees and other penalties sent her finances spiraling out of control.

In July, after working two jobs still didn’t make ends meet, she filed for Chapter 13 bankruptcy protection. Under a court-sanctioned plan, her escalating penalty charges are halted, but she must make a fixed payment on her debt each month for the next five years. She can keep her house and car and, by the end, she says, will just about have repaid her obligations. Best of all, she says, “the creditor calls have stopped, and I can breathe again.”

Moore is one of an estimated 450,000 people who have sought court protection from creditors since a new law took effect one year ago today that made filing for personal bankruptcy harder and more expensive. While that number may seem high, it is down by about 1 million from the average in the preceding four years.

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