Total Bankruptcy

Liz Pulliam Weston's column on MSN Money goes beyond the fluctuation in the number of bankruptcy filings--both the initial drop-off after October 17 and the quiet but steady climb since--to the root causes and comes up with the same old story.

The column points out that the key factors that triggered the high volume bankruptcy filings over the past decade are still in place:

1. Credit expansion, including the extension of credit to consumers with questionable ability to repay. According to Weston, the amount of outstanding credit card debt has more than quadrupled since 1990;

2. Financial illiteracy in America. According to a recent study prepared for the National Council on Economic Education, only 1/3 of adults had a good understanding of basic economic and personal finance concepts;

3. Interest rates without caps. Credit card "penalty rates" can be triggered by a single late payment, and often exceed 30%; and

4. Inadequate medical insurance coverage. This is particularly ominous in view of the large proportion of recent bankruptcy filers who cited uninsured medical bills as their primary trigger for filing. According to the U.S. Census bureau, there are currently approximately 45 million uninsured Americans-and they're not necessarily, or even primarily, lower income consumers.

With these factors continuing to play a significant role in the U.S. economy, it seems likely that consumers will be compelled to consider bankruptcy in increasing numbers despite Congress's efforts.

Is it possible to pay off a chapter 13 in advance, are there any penalty fees or requirements before this can be done if possible.