Financial discipline important as bankruptcies rise

The number of Americans filing for consumer bankruptcy increased by nearly 40 percent nationwide last year, according to numbers released this month by the American Bankruptcy Institute.\nFinancial experts say the increase is because of unpaid mortgages, credit card debt and loss of jobs, and college students can help themselves avoid this trend by practicing financial discipline and saving money.\nCredit card debt and loss of jobs are among the main reasons for bankruptcy, said Jack Williams, the American Bankruptcy Institute’s resident scholar. People are taking on more debt than they can pay, and cannot afford it.\nCollege students are a major market for bankruptcies as well. Williams said it is important for students to get into the habit of being responsible with money and to not get behind on credit payments.\n“Try to save, even if it is just $10 a month,” he said. “Students need to learn financial discipline at an early age until they are financially stable. They need to establish some sort of credit card discipline as well if they want to learn for the future.”\nIndiana residents filed 23,123 bankruptcies in the first three quarters of 2007, and the numbers continue to rise, according to the American Bankruptcy Institute’s Web site. However, Williams said the Southeast region of the U.S. ranks as the highest in the amount of bankruptcies.\nWith more bankruptcies filed in 2007 than any other year, bankruptcies show no trend of slowing down. \n“It will get worse, because there has been a reduction in income and there has been historically low savings,” Williams said. “You will find that we are at a record high.”