Last year a record 1.3 million Americans filed for personal bankruptcy. That's a more than 350 percent increase since 1980, when just under 200,000 bankruptcies were reported. In a complete reversal of past trends bankruptcies are rising, in spite of an extremely healthy economy. Why this is happening has become a matter of considerable debate. Iowa Senator Chuck Grassley.
Some people use bankruptcy for financial planning, and that's wrong.
But others, like Bankruptcy Attorney Bob Weed, who represented Nichols, paint a far different picture. The credit card companies say that the stigma is gone from bankruptcy. What's gone on is they've spent the last 20 years getting rid of the stigma against debt, and if debt continues to rise explosively, bankruptcies have to follow, because people get into a situation where they can't pay. Under current law people have a choice as to how they file for bankruptcy. Under one section, called Chapter 13, they get to keep most of their assets, but must agree to a repayment plan for any remaining debt.