Bankruptcy

Poverty Rate Rose in U.S. Last Year

By guest-writer

Recent reports from the Census Bureau show that the number of American families living at or below the poverty line increased in 2009 to a fifteen-year high of about 44 million, or one in seven Americans. So what does that mean for individual finances, including foreclosure , eviction, bankruptcy filings and more?

Here?s a look at what the rising poverty rate in the U.S. might look like.

Poverty and Bankruptcy

Many insiders have estimated that as many as 1.6 million Americans will file for bankruptcy by the end of 2010, up from even 2009?s 1.3 million. Even though that number represents an increase from prior years, some economists conjecture that more Americans would be in need of bankruptcy protection if not for:

• Shared housing: More and more extended families, it seems, are opting to live in single residencies in order to save money on bills. For some people, living with loved ones may have been the result of losing a home to foreclosure or a landlord?s loss of property to foreclosure.
• Extended unemployment benefits: Congress has extended traditional unemployment benefits more than once since the Great Recession began, and many individual states, too, are offering their out-of-work residents more support than usual.
• Food banks and soup kitchens: Various charity-funded food organizations have apparently seen a significant increase in needy Americans. Reports suggest that more and more U.S. citizens are being forced to choose between paying the rent and buying food supplies.
• Food stamp distribution: Sources note that the number of Americans receiving food stamps has risen to 41 million, from 39 million at the beginning of the year.

Unemployment and Bankruptcy

According to the New York Times, one likely culprit of the rising poverty rate is the unemployment rate, which has been stuck at just below 10 percent for months now and shows no signs of dipping.

Some analysts have reportedly noted that it generally takes some time for poverty rates to decrease once unemployment numbers begin to normalize, and the experts are still not saying when that?s likely to happen.

Here?s a look at who, according to sources, has been hit hardest by decreasing wealth levels:

• 9.4 percent of white Americans are now in poverty;
• 25.8 percent of black Americans live at or below the poverty line;
• 25.3 percent of Hispanic Americans find themselves in poverty; and
• 12.5 percent of Asians are in poverty.

All of the above groups except Asians have seen increases in poverty in the last two years. Additionally, sources note that young adults without college educations are especially hard hit across racial lines. Many predict that poverty will continue to rise for the duration of 2010.

Full post as published by The Bankruptcy Blog on September 22, 2010 (boomark / email).