In a recent blog post by the Federal Reserve Bank of New York, researchers discovered that the permanent effect of a job loss on workers’ earnings is 20 percent. The finding is important, obviously, because many consumer New York bankruptcy cases originate in debtors’ job losses. The New York Fed explored income shocks to households, …
NY Fed: Losing a Job Results in a 20 Percent Permanent Decline in Earnings Read More »
What factors influence the likelihood of filing New York bankruptcy? That’s not exactly the question the Federal Reserve Bank of Minneapolis, Minn., asked in its research on “income risk,” but it addresses the question in some ways. Economists often write about “income inequality,” but that’s just the distribution of income at any given time. Income …
Minneapolis Fed: ‘Income Risk’ High for Older, Lower-Income Workers Read More »
In the last few years you may have heard something in the news that has not happened for a while: The Federal Reserve is gently raising its target interest rate, the effective “federal funds rate.” The Fed held this rate at about zero from late 2007 until the end of 2015, but fearing an overheating …
How Do Fed Rate Hikes Affect Debtors and Bankruptcy Filings? Read More »
It’s undeniable that there’s a relationship between New York bankruptcy filings and unemployment. That’s not a bad thing, though. People who have lost their incomes cannot repay their debts, so there’s no reason to attempt the impossible. Indeed, a few months of unemployment make it easier for debtors to show that their current monthly incomes …
Is Long-Term Unemployment Not a Big Factor in Hiring? Read More »
Business bankruptcies appear in the news so regularly that it’s easy to ignore them. However, when it’s your employer’s business that files bankruptcy, then it’s your problem. Here are some facts you’ll want to know. First, it’s necessary to distinguish which chapter the business is filing in. Businesses can’t file in chapter 13, so that …
Understanding the state of household finances in the U.S. can give debtors a benchmark to compare their circumstances to. The Federal Reserve recently published its “Report on the Economic Well-Being of U.S. Households in 2015,” which is based on the Survey of Household Economics and Decisionmaking (SHED). The SHED is only three years old and …
Federal Reserve Survey Shows Continued Household Financial Anxiety Read More »
Two bankruptcy cases made the news in March that will be of interest to New York bankruptcy debtors. One of them was even a Brooklyn bankruptcy. The first case appeared in the Boston Globe. Echoing my post on the economic risk calculator, a debtor earned $165,000 annually as president of a manufacturing company and borrowed …
Bankruptcy Courts: Parent PLUS Loans Stay, Bar-Exam Loans Go Read More »
The New York Times recently ran an op-ed simply titled, “Calculate Your Economic Risk.” It sounded like the Choose Your Own Adventure novel from the late 1970s—or bankruptcy risk scores that some creditors use. According to the op-ed’s authors, who are academics, it’s possible to estimate “economic risk” the same way as the risk of …
The latest unemployment news is out and it ain’t good. Economists were predicting a drop in unemployment claims. But instead the Department of Labor’s report showed an increase in the number of first-time filings for state unemployment benefits. What does this mean from a bankruptcy perspective for New Yorkers? Conventional wisdom says that bankruptcy filings …
Unemployment Update: Jobless claims up and bankruptcy to follow in New York Read More »
You may have noticed a couple pieces of bad news circulating in the media the last few days. One is that foreclosures have continued to climb, according to the quarterly statistics put out by RealityTrac. Why the increase? Apparently banks have been delaying a lot of foreclosures as they’ve tried to implement the federal foreclosure …
Foreclosure increase + jobless recovery = Trouble Read More »
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