Personal Bankruptcies On The Increase

More than a million Americans are expected to file for bankruptcy this year.  That's the highest number since the personal bankruptcy law was overhauled three years ago.  The News On 6's Jeffrey Smith reports that even middle-class families sometimes have no other choice.

In Green Country, more than 250 people declare bankruptcy every month.  And, people who recently had to file say in today's economy you can be financially stable one day and in-over-your-head the next.

Pat Knowles says 2007 was the worst year of her life.  The happily married, middle class grandma was diagnosed with lupus.  And, her trucking business folded.

"Diesel was $2.00 when we got into the business.  When we got out of it was over $4," said Pat Knowles.

The medical bills for her three surgeries, the gas bills for her trucks, the mortgage bills for her home all kept piling up.

"The depression that goes along with all that stress is just unimaginable," said Pat Knowles.

Two weeks ago, Knowles did something she never thought regular people did.  She filed for bankruptcy.

"You just don't do that.  You pay your bills. And, we always had. We were real careful about our credit score, constantly monitoring all that, really taking care of business.  And, when this thing fell apart, it hit us like a ton of bricks," said Pat Knowles.

Bankruptcy lawyer Gene Hough says it's shaping up to be a record year for bankruptcy.

"I can only say in all the years I've done bankruptcy and all the years I've observed, the American economy, this is the worst I've seen," said Gene Hough.

For the first six months of this year, the filings are 30% greater than they were for the same time last year.  For the Northern District of Oklahoma, the comparisons between this year and last year are staggering.

"If it can happen to us, it can happen to anyone. We never had a worry in the world," said Pat Knowles.

Knowles knows the stigma behind bankruptcy.  She says she used to be the same way.  But, she says it was her only out.

"We will have a fresh start, with no debts, at the same time, we lose our homes, we lose our vehicles, we lose everything we got," said Pat Knowles.

Knowles will have to appear in Federal Court next week to face her creditors.  She says even though her home will be foreclosed, she and her husband plan on staying in Pryor.