This is a book review and analysis of The Two-Income Trap (which was written by Warren and Tyagi), from a consumer credit perspective. This review is property of its author and not to be plagiarized; it is made available only for study and reference purposes.
Of the many salient points outlined in Warren and Tyagi's The Two-Income Trap, one that rings especially true for my generation is the relationship between credit and bankruptcy. Although the role of credit in modern middle-class financial roles has often been misrepresented by the "over-consumption myth", The Two-Income Trap explains how credit can worsen financial woes as well as its statistical ties to bankruptcy. The empirical research of Gropp, Scholz, and White looks to the corollary - how do various bankruptcy laws affect the supply and demand of credit? I believe that the two taken together paint a clear picture of the need for usury legislation.
First let us look at the wealth of information provided by Warren and Tyagi. They identify several statistics to justify investigation of this matter. For instance, 91% of families who filed for bankruptcy had debt amassed through their lines of credit prior to filing. The "two-income trap" itself greatly worsens this situation because when a couple separates, or one earner is taken out of the workforce, the credit is often the only tool available to cover the short-run cost of the families' lifestyles (and, indeed, often their basic necessities).
But above all this, the authors cite what they call the "democratization of credit" as a major threat to middle class families. ...
Credit and Bankruptcy: The Two-Income Trap and "Personal Bankruptcy And Credit Supply and Demand".