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Fiscal irresponsibility causes increase in bankruptcies, says UNI economist<br>

November 19, 2002

Lois Lindell, assistant director, UNI Center for Economic Education, (319) 273-2952
Gwenne Culpepper, University Marketing & Public Relations, (319) 273-2761

For the past ten years, personal bankruptcies nationwide have been on the rise. In 1990, there were 718,000 personal bankruptcies; in 2001, there were 1.45 million. Lois Lindell, assistant director of the UNI Center for Economic Education, blames credit cards. 'What's being reflected is a preponderance of credit card offers that have a lot of people getting in over their heads without realizing it.'

She said other contributing factors include rising unemployment, increasing medical expenses, and companies who make it attractive to file for bankruptcy by promising that doing so will completely eliminate debt.

Lindell said there are indications that the U.S. Congress will soon try to revive legislation that will eliminate certain bankruptcy options for many people. 'If that happens, it will become much more difficult to file. You won't be able to just wipe the slate clean; you'll have to have in place some kind of repayment plan for your debts.' And that, she said, is a good thing. 'It'll make people more responsible.'