Though South Florida bankruptcy rates have been falling in recent months, the region experienced a year-over-year increase in filings of 40 percent between 2009 and 2010.
Local bankruptcy attorneys attribute the dramatic increase in bankruptcy filings to the housing crisis, triggering unemployment and foreclosures, the Orlando Sun Sentinel reports.
"There was a ripple effect - the little restaurant that was near the construction site or near some real estate firm" would have to file bankruptcy, explained one local bankruptcy attorney. The slowdown in bankruptcy filings in recent months has also been attributed to a slowdown in foreclosure filings, which was in turn largely triggered by robo-signing investigations, some experts claim.
South Florida's high unemployment - 12 percent in November - also reportedly contributed to the year's rise in bankruptcy filings.
More than 70 percent of bankruptcy cases the area saw during 2010 were Chapter 7 bankruptcy filings. Chapter 7 bankruptcy typically entails liquidation, whereas Chapter 13 bankruptcy involves the gradual repayment of loans for consumers with a steady income.