Bankruptcy - Why going broke is a fact of life in America

Bankruptcy has become little more than a few months in purgatory, rather than the seven-year ache -- and lifelong disgrace -- it once was.

By Liz Pulliam Weston

"Capitalism without bankruptcy is like Christianity without hell."-- Frank Borman, former CEO of bankrupt Eastern Airlines

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Bankruptcy, once regarded as a shameful and humiliating failure, has become an everyday fact of life: More Americans filed for bankruptcy last year in the United States than in the entire decade of the 1960s.

And with millions of consumers struggling under record-breaking debt loads in an environment of rapidly rising interest rates, those numbers are likely to continue climbing in the months and years ahead.

What's behind the bankruptcy boom? In simplest terms, it stems from a growing tendency for consumers to spend more than they can afford to repay. But there are other, less obvious factors at work, including the shrinking availability of health insurance and the rise of computerized credit scoring.

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