Americans Can't Wait For Their Tax Refunds... To Immediately File For Bankruptcy

Tyler Durden's picture


In yet another sad reflection on the state of the Schrodinger-economy, USA Today notes that  over 200,000 households will use their tax rebate this year to pay for (drum roll please) a bankruptcy filing and associated legal fees. The NBER research confirms a little known fact (outside of bankruptcy lawyer circles) that 'at the first part of the year, when Americans receive their tax refunds, there almost always is a spike in personal bankruptcy filings.' but this has been especially true since the cost of bankruptcy soared (from $921 in 2005 to $1477 two years later according to the US GAO) after law changes in 2005. The bulk of the fees go to the lawyers of course but the fact that the law was changed to prevent bankruotcy abuse as it was thought too many people who could afford to pay their debts were taking advantage of the system. The sadder truth, according to the USA Today article, is that the drop in bankruptcy filings doesn't necessarily mean that the change has curtailed abuse of the system. "It just means that financially distressed people are not necessarily getting the help they need," Last year's average tax refund was $2913 - enough for many Americans to file for bankruptcy. So we wonder what impact this will have on AAPL's earnings as bankruptcy fees outweigh iPad purchases from this year's rebates. Brilliant!

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Fri, 04/13/2012 - 13:35 | 2342216 Mongo
Mongo's picture

Just love the picture that came with this post


Fri, 04/13/2012 - 13:38 | 2342234 Ahmeexnal
Ahmeexnal's picture

I wonder if the "Fearless Golfer" is one of those who will use his tax returns to file for chapter 11.

Fri, 04/13/2012 - 23:01 | 2343195 markmotive
markmotive's picture

And why the hell not.

Take what you can while you can:

Fri, 04/13/2012 - 14:07 | 2342340 docj
docj's picture

It would only be more perfect if instead it said "BULLISH!!"

Fri, 04/13/2012 - 14:16 | 2342365 battle axe
battle axe's picture

The American Dream Baby!!!

Fri, 04/13/2012 - 15:26 | 2342543 Arius
Arius's picture

Buy the Powerball?

Fri, 04/13/2012 - 15:39 | 2342577 Freddie
Freddie's picture

Hope & Change rolls on.

Fri, 04/13/2012 - 23:19 | 2343203 Alexandre Stavisky
Alexandre Stavisky's picture

All the grand masters of this chess game must realize that their entire board lies within just one square of a greater realm.

Fiat is dead.  Because it is the absolute final denominator of the global financial DNA and is perfectly corrupt, the body is declared stage 4.

Matter of time.  Matter of time.

For a mental exercise, list the 50 largest great projects and accomplishments of civilized man.  Research its cost.  Sum them.  Once summed, compare them to one week of USA debt.

It does not exceed it!  And are there any such projects of monumental futurative wealth productive potential?  No.  Instead, we feed the indolent, overstuff the gov't jobbers with unearned munificence, keep the elderly (who have surpassed their prior contributions even when factored with stellar interest) running on ponzi pensions, allow the docs to believe that their supreme accomplishments will stave off death and its various attendants (by way of astonishing expenditure), keep a large hostile group offshores fighting interesting "bogieys" and patrolling empire.

Overheard was a quote wherein it was stated that, "once the open criminality of bond fraud and currency creation with its consort of international swaps of all sorts was made open knowledge, only audacity was a constraint".  Indeed!  Indeed!  Only the size of the number, the scale of the dilution, the hubris of counterfeit will sway.   What is a number?  And WHAT PRICE HONOR?  There is no more.  There is no more accountability or accounting or knowable quantity.  It is destroyed in quantitative easing, in currency creation, in expansion of the money supply, in panickingly, hopefully creating more units of account to mask the undeniable atrophy of the the REAL economy.

If fiat is held steady, all the industries which factor upon it DIE.  For there is no more expansion, no more growth, but CONTRACTION.  Therefore, financial gimmicks and play of number expansion must fill the gap.  Since the real economy is dying, the markets and gov'ts and other parasitical players which exist upon it cannot admit death.   They cannot admit checkmate and resign the game.  Instead they expand the phoney money in hopes of masking the contraction of the underlying physical world.  Look at the money and the charts denominated in money, not the reality.   All of F.I. RE. is dead.

Keep the lights on the the upper tiers, while the lower quarters subside into the water, and the beam strains to break.  It is all going down.

Money pumps shall feel wonderful.  Until the reality that they have peeled away from their essential purpose which is to perfectly reflect the values within society.  Since stripped and defiled, no one knows true value, nor that it is all over.

Just a matter of time!

Fri, 04/13/2012 - 13:36 | 2342218 e_goldstein
e_goldstein's picture

Winning :-/

Fri, 04/13/2012 - 13:38 | 2342231 hungarianboy
hungarianboy's picture

And gold plunged :D Gold is dooooooomed.

Fri, 04/13/2012 - 13:39 | 2342240 mayhem_korner
mayhem_korner's picture



Do you habitually post and up-arrow yourself simultaneously, Jethro?

Sat, 04/14/2012 - 09:54 | 2345221 engineertheeconomy
engineertheeconomy's picture



Fri, 04/13/2012 - 13:40 | 2342243 Ahmeexnal
Ahmeexnal's picture

as opposed to....?

Fri, 04/13/2012 - 23:40 | 2343223 Alexandre Stavisky
Alexandre Stavisky's picture

Also and another.  The Simpson-Bowles group.  They recommend the prudent.  Reduce debt etc. etc.

However, this money system, like a blood supply, cannot admit significant reduction.  Paying off debt kills money supply.  This body economic like a physical biological entity needs every corpuscle, every red & white cell, to convey the every day needs.  Never will debt be repaid, never can defict be reduced. Because the global market basket of nations having surplus cannot (were every note applied) purchase the necessary daily debt to continue the habituated needs of the money user.  Neither can deficit reduce, let alone be paid in surplus to bring deficit to surplus.   It is a physical impossiblity because to do so would exsanguinate the body government, body politic, body financial and mean instant death.  Financial infarction.  It is FIRE AND ICE.  Were this economy tied to any commodity based unit of account exchangeable for the universal currency, IT WOULD BE DEAD.  THE BANK RUN WOULD HAVE ALREADY BROUGHT IT TO ITS FINAL, PHYSICAL ENDPOINT!  However, fiat allows the endgame to run much longer but with more ruinous result.

Once everyman realizes it, it is hyperinflation.  Gov't shall not renege on its promises, but it shall ever print to cover its absence of revenue.  Systemically, structurally, inevitably it will require exponentially more units of account which must be FABRICATED.  It can never (having passed the point of no return) regain a faith over time in the currency. Print or pretend to print (via bond purchases) and scatter the dollar, but free enterprise and freedom of economy is no more.

Fri, 04/13/2012 - 13:46 | 2342266 hungarianboy
hungarianboy's picture

Look at the dislikes. LOL bunch of bag holders. S&P could zoom from here again and gold probably dumped.

Bernanke is up :-)

Fri, 04/13/2012 - 13:50 | 2342286 SilverIsKing
SilverIsKing's picture

Sounds to me like you are 'up' thinking about Bernanke.

Whatever floats your boat.

Fri, 04/13/2012 - 13:51 | 2342287 brewing
brewing's picture

i never thought mdb would change his handle...

Fri, 04/13/2012 - 14:47 | 2342446 Jedi Longsabre
Jedi Longsabre's picture

No, MBD is actually clever and funny


Fri, 04/13/2012 - 16:29 | 2342696 Pool Shark
Pool Shark's picture



Robo? Is that you?...

Fri, 04/13/2012 - 13:53 | 2342298 Lost Wages
Lost Wages's picture

Obviously hungarianboy is George Soros.

Fri, 04/13/2012 - 14:00 | 2342324 hungarianboy
hungarianboy's picture

What's even funnier is that Tyler ALWAYS bullish on gold even when gold is crashing.

Wonder when ZH readers accept that gold was just another bubble. When gold is sub 1000?

Is that enough pain?

Fri, 04/13/2012 - 14:09 | 2342344 SheepDog-One
SheepDog-One's picture

Your act is stale and dry.

Sat, 04/14/2012 - 10:05 | 2345233 engineertheeconomy
engineertheeconomy's picture

The powers that be can only manipulate Gold down for so long... once it begins to leave the shelves you will not be able to get an ounce of Gold for any amount of paper. Paper rots and burns, the wind just blows and it's gone. Paper  loses it's value every minute of every day.

Fri, 04/13/2012 - 14:14 | 2342356 Hangfire
Hangfire's picture

Dammit you're right!  I'm selling all my PM's and going all in on GM.   

Fri, 04/13/2012 - 14:14 | 2342358 Ahmeexnal
Ahmeexnal's picture

Nice try, but....NO. JPM is about to die due to it's PM manipulation scheme. JPM needs to deliver gold and silver and is pulling it's ass hairs off trying to secure the physical required. So once again...NO, you aints shaking no PMs from nobody here.

So please, just FOAD!

Fri, 04/13/2012 - 14:17 | 2342367 Bay of Pigs
Bay of Pigs's picture

Sounds exactly like Spaulding Smailes. Welcome back douchebag.

Fri, 04/13/2012 - 14:26 | 2342390 Chump
Chump's picture

If gold went <$1000 I'd jump for fucking joy.  I'd finally be able to buy a whole ounce instead of paying premiums for fractional amounts.

And silver under $10?  Be still my beating heart...

Fri, 04/13/2012 - 14:28 | 2342402 n8dawg84
n8dawg84's picture

If gold goes below $1,000 then I will continue to buy.  In fact, I'll be able to pick up more ounces for my dollars than I can now.  Good bang for my buck and all that.  No pain

Fri, 04/13/2012 - 15:02 | 2342487 NotApplicable
NotApplicable's picture

Gawd, I just love reading "gold is a bubble" ignorance.

You'd be much better served if you tried to understand just what money is before publicly flaunting your complete lack of understanding on the subject.

Here's a start. IOUs (a.k.a. "currencies") are not money, but a substitute for it in the form of an issued credit. While all valuations in life are subjective, they are based on physical properties such as scarcity and utility. Properties which change slowly enough in a stable environment that one can plan for the future accordingly (if they are also wise enough to plan). In a fractional-reserve fiat environment though, these measures can all drastically change in the time it takes Benron to hit CTRL-P (in other words, the Fed's stability mandate is complete BS). In this scenario, even wise people cannot plan anything other than trying to front-run Benron.

You might think of yourself as a smart troll, messing with the "gold bugs." Most of the rest of us though, well, we recognize you as just another uninformed sheeple. Then we start doing the math at how much gold will have to rise to counter this mass ignorance.

In other words, you make our very case. Because see, the idea that one man's liabilities are another's assets is not a system of wealth generation, but enslavement. In order for your system to work, complete enslavement is necessary.

Also, if gold is a "bubble," why are the Chinese trading their dollar stash for it at current prices? Do you really think they are that dumb? (Remember, they run their country with engineers, while the Western world uses lawyers.)

Fri, 04/13/2012 - 15:40 | 2342580 tahoebumsmith
tahoebumsmith's picture

Lets see....If I had used the same amount of money to buy stocks back in Sept of 2007 that I used to buy gold, lets just see where I would be today. Using a round number lets use 100,000 as an example. After the crash of the stock market in late 08 and 2009 I was left with $34526.00 in my investment account. Since then the market has rebounded and brought my stock investments back up to $86,852.. Feeling kinda good because I got almost 90% of my money BACK. Now lets look at the same money I used to buy gold... Gold was selling for $758 an ounce so I was able to purchase 132 ozs of pure gold. Today the price of gold is $1628 an oz. so if I cash in the shiny stuff it looks like I could pocket roughly about $214,896.00 fiat dollars. If you look at the stock market return of $86,852, which by the way is a roughly a $13000.00 loss since 2007 or the $115,000.00 gain with gold during the same period, are you really going to try and convince me to go back to the Casino? Wake up and see the big picture... I'm sure there are people out there that have ridden the coattails of the ALGO bots and done better in the markets however the average Joe who is sitting in an IRA or 401k has simply been mindfucked and has been rewarded by giving them most of their money back that the CRONIES used to steal roughly 5 TRILLION dollars by pretending the world was going to end...BAWAHAHAHA

Fri, 04/13/2012 - 15:41 | 2342589 Sancho Ponzi
Sancho Ponzi's picture


You may want to look at the last chart in this post. If you have the capacity, you'll understand that the rally in gold is being driven by supply (fiat debasement/printing) and demand (fiat exchanged for gold to preserve wealth.) Gold will remain in the long-term upward channel until the printing ends or the ponzi unravels.

Fri, 04/13/2012 - 16:07 | 2342652 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

OOh, the pain. Long since $400. Now selling after the London morning fixing and buying on the Asia open. Match that, goulash-boy

Fri, 04/13/2012 - 14:11 | 2342350 TWSceptic
TWSceptic's picture

Do not confuse short term correction with secular bull market, we already have someone for that (Gartman).

Fri, 04/13/2012 - 13:39 | 2342232 mayhem_korner
mayhem_korner's picture



Yes, but are the bankruptcy filing fees tax deductible for 2012?  :D

Fri, 04/13/2012 - 16:33 | 2342700 Pool Shark
Pool Shark's picture



Only deductible if you have an income to deduct them against...


Fri, 04/13/2012 - 13:40 | 2342236 Doubleguns
Doubleguns's picture

The filing fee is obviously to cheap. 200,000 filings!!!!



Fri, 04/13/2012 - 13:41 | 2342246 q99x2
q99x2's picture

I don't get a tax refund. I don't pay taxes. I'm waiting until bankruptcy covers student loans again. After graduation I'll wait in Costa Rica.

Sat, 04/14/2012 - 07:49 | 2345120 Bendromeda Strain
Bendromeda Strain's picture

say "hi" to Jim Willie for us...

Fri, 04/13/2012 - 13:42 | 2342249 SheepDog-One
SheepDog-One's picture

WOW more great news for Obummers supposed re-election....everyone broke and filing for bankruptcy! I guess what we need is more QE to pump stocks to impress these people, and $7 gas to boot! Hooray.

BTW, Ive got 3 friends who all tell me they have not gotten their tax return checks, the feds are holding it....anyone else seeing the same thing? 

Fri, 04/13/2012 - 13:49 | 2342282 chunga
chunga's picture

We made less this year than last year.

Somehow, instead of a "refund", this year we have to cut a check.

I'm waiting until Tuesday to send it return/receipt.

Fri, 04/13/2012 - 14:27 | 2342397 MachoMan
MachoMan's picture

Same thing here chunga...  had to pay in a little bit last year...  and by preliminary calculations we'll be paying in again this year...  they can get it on the last day then.

Fri, 04/13/2012 - 15:04 | 2342489 chunga
chunga's picture


I had that money ear-marked to tax!

No change in deductions at all; just lower income.


Fri, 04/13/2012 - 14:24 | 2342386 Agent P
Agent P's picture

I e-filed in early March, and the direct deposit only took four days after the IRS accepted the return.  Still waiting on State of Illinois though...shocking, I know.

Fri, 04/13/2012 - 15:32 | 2342556 NotApplicable
NotApplicable's picture

You won't see that money until the day after Uncle Sugar bails them out.

Unless that is, you want to go to Chicago and take it directly from the mafia.

Fri, 04/13/2012 - 16:13 | 2342667 Born-Again Bankster
Born-Again Bankster's picture

I'm in that boat.  Been waiting 6 weeks already.  When you owe, you have to pay interest, but when they owe you it's just a glitch in their system.

Fri, 04/13/2012 - 16:22 | 2342685 Gift Whores
Gift Whores's picture

I feel better when I owe the govt and am holding their money.

Average refund $2900??? WTF???  

I won't be funding their ponzi schemes and green energy bottomless pits.

Besides, I'm saving up for unicorns and pixi dust.

Fri, 04/13/2012 - 16:55 | 2342736 Freddie
Freddie's picture

My car "don't need" gas - I can get an iPad app that makes it run on Hopium.

Fri, 04/13/2012 - 19:53 | 2343019 SurferNate
SurferNate's picture

Happened to me for about 3 weeks after filling.  Usually we pay ~$2K a year, put started a farm and received a refund.  IRS held it until they received my late 1099-MISC filing in Kansas City (The funds were placed in the bank the same day the late filling fee for the 1099 was withdrawn.)

Fri, 04/13/2012 - 13:42 | 2342250 yogibear
yogibear's picture

Then the country declares bankruptcy. Bernanke and the Fed's default through devaluing the dollar to zero.



Fri, 04/13/2012 - 13:44 | 2342261 SheepDog-One
SheepDog-One's picture

So then really everything from 2008 has been for most its just a cat and mouse entertainment for the FED. 

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