Many Americans can relate to the sense of hopelessness that hits before the decision is made to file for bankruptcy. That was the case with Olympic darling Gabrielle Douglas’ mother, Natalie Hawkins. Earlier this year, she filed for Chapter 13 bankruptcy. Her reasons were noble: she stated Chapter 13 was her choice because she felt an obligation to repay her debt, she needed it reorganized, though. Her daughter had big dreams and there’s not another mother out there who can’t relate to wanting to see her child fulfill those dreams.
Douglas has been one of the most popular athletes at the Olympics in London and she’s now the first African-American woman to win an all-around gold medal in gymnastics. She’s 16 and brilliant, beautiful and determined. She’s won two gold medals thus far and her nickname “The Flying Squirrel” has endeared her to folks around the world.
Without an ounce of arrogance, her mother has clearly raised a young woman any mother would be proud of. While Douglas is already considering very profitable offers from companies and the media, her mother has remained adamant that her daughter’s earnings and accolades are hers alone. Hawkins said the bankruptcy filing allowed her:
to still be able to live and reorganize my debt in such a way that I could still pay what I owed.
With such a courageous approach to the news being as “big” as her daughter’s accomplishments, we thought we’d take a look at the latest bankruptcy news. Many are hoping Hawkins’ honesty and commitment to see her repayment through might finally begin to lift the shame many feel when they find themselves in front of a bankruptcy judge. No one wishes for bankruptcy, but with the tough economic times, it was often a last resort for millions. Still, the numbers are surprising.
According to the most recent numbers, bankruptcy filing rates have consistently been dropping at the rate of between 12-16%. Each month, there are fewer people who are turning to bankruptcy. This, of course, suggests many are on the road to financial recovery. The daily bankruptcy filing rate in July was 4,622. That represents a 16.1% decline from the same time last year year and a 2.0% decrease from June. Analysts say the country remains on track for just above or below 1.2 million filings for the 2012 calendar year. That will be a 13.9% decline from 2011 which was also a 13.6% decline from 2010.
Many cite the massive drop in 2008 and say it was due to the massive overhaul in 2005 of national bankruptcy laws.
Still, there are those who say since bankruptcy is usually a last option, it stands to reason that the numbers won’t continue to drop in the big rates we’ve seen in recent months. Many say a “leveling off” of sorts is bound to occur.
On Saturday, Hawkins said in an interview,
It’s my story, it’s part of me. I’m not even embarrassed about it. It shows that even though I didn’t like to have to do it, I’m glad there was something there for me to be able to protect my home.
She’s not alone. Most people cite efforts to maintain their homes as their primary reason for filing when they do. The fact that Hawkins’ $56,000 mortgage is the lion’s share of her bankruptcy, which listed closet o $80,000 in debt, is proof that most don’t turn to this option until their home is in jeopardy.