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Monday, October 12th, 2009

Bankruptcy Filings Could Hit 1.4 Million in 2009

Total bankruptcy filings for 2009 are on track to hit 1.4 million by year's end, according to recent statistics, with more than 5,900 personal bankruptcy petitions filed each day nationwide.

Between January and September, more than 1.07 million petitions were filed, according to statistics collected by Automated Access to Court Electronic Records, or AACER, a nearly 33% increase over the same period of 2008.

The rate of filings peaked in May, with more than 6,000 individuals filing bankruptcy per day, but has decreased only slightly as the recession wears on.

Bankruptcy Filings Return to 'Natural Levels'

The continual rise in bankruptcy rates from 2006's low should be expected, according to University of Illinois College of Law professor Robert Lawless. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCA) that took effect in 2005 led to an immediate decrease in filings, but only due to the massive increase in the month before it took effect.

Lawless sees it as a "return to the 'natural level' of bankruptcy filing rates in this country."

Current economic conditions have only sped up the process by which people run out of options and turn to bankruptcy protection, Lawless says.

"When people can no longer borrow on their credit cards to stave of the day of reckoning, they end up in bankruptcy court."

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Posted in Bankruptcy News and Events | 2 Comments »

Friday, October 10th, 2008

September 2008 Personal Bankruptcy Filings Up

Consumers are increasingly filing bankruptcy, according to recently released data from the National Bankruptcy Research Center.

Nationwide, personal bankruptcies were up 28.6 percent this September over the same time a year ago. However, there is some good news: personal bankruptcy filings were down 8 percent from the previous month.

Chapter 13 bankruptcy filings represented 33.5 percent of all the consumer cases in September.

Unfortunately, with the dragging economy, this news isn’t so surprising.

Check out Total Bankruptcy’s article Bankruptcy Filers in 2007 for more information on bankruptcy trends.

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Tuesday, June 10th, 2008

Bankruptcy Filings up Nearly 31 Percent

Despite the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) that went into effect on October 17, 2005, the number of consumers and businesses filing bankruptcy is on the rise.

BAPCPA increased the fee to file bankruptcy and placed tighter limits on the income of those who are filing bankruptcy, but aside from a brief decrease in bankruptcy filings at the end of 2005, has done nothing to slow down the number of people and businesses who find that filing bankruptcy is their best option.

According to data from the National Bankruptcy Research Center, U.S. consumer and business bankruptcy filings were up by 30.9 percent nationwide in May as compared to the same time period a year ago.

The overall number of people filing bankruptcy is still lower than in 2006 when 1.8 million people filed bankruptcy, but with the nation's poor economy and the sharp rise in food and gas prices record numbers of consumers and businesses may soon be considering filing bankruptcy.

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Monday, April 7th, 2008

Credit Industry to Blame for Rise in Consumer Bankruptcy Filings

In early April, the American Bankruptcy Institute detailed data from the National Bankruptcy Research Center (NBKRC) revealing that consumer bankruptcy filings were up 15.2 percent nationwide this past February as compared to January 2008 and up 37.3 percent from February 2007.

It doesn't take a rocket scientist to figure out that a tough economy means more people filing bankruptcy.

With that in mind, an interesting editorial in today’s Minneapolis Star-Tribune pits the blame for this increase in consumer bankruptcy filings on the credit industry.

Give the editorial a read as it offers a a bankruptcy attorney's poignant perspective on the issue.

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Thursday, March 8th, 2007

More Evidence of Increasing Bankruptcy Filings

Bob Lawless at the Credit Slips blog made an interesting analysis this week based on a comparison of February bankruptcy filings to January bankruptcy filings.  At first glance, the increase in filings from January to February appears to be fairly small but, as Lawless points out, there were three more business days in January than there were in February.  On a filings-per-business-day basis, the February figures reflect an increase of more than 17 percent over January.

Lawless goes on to crunch some other numbers and predict an approximate 30 percent increase in filings in 2007 over 2006--and the estimate is based on some very conservative assumptions.  The original post is worth a read.

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Thursday, June 1st, 2006

As Bankruptcy Filings Rise Again, One County Illustrates Trend

Although news outlets across the country continue to report the dramatic decline in bankruptcy petitions, filings are indeed on the rise across the country. When looking solely at first quarter 2006 versus first quarter 2005, there has in fact been a significant decline. However, on a month-by-month basis filings are climbing steadily.

Concentrated data from one North Carolina country demonstrates that filings are climbing to their pre-BAPCPA levels and that the most common reasons for filing a bankruptcy petition are--as consumer bankruptcy attorneys have always maintained--life-altering events such as divorce and major medical crises.

Bankruptcy Filings in North Carolina

In Cumberland County, North Carolina, the number of bankruptcy filings in a given month tended to range between 125 and 200, with the average hovering around 150. After the law change, that number dropped dramatically, just as it did across the country. However, in March of 2006 there were 87 filings in that county--more than 50 percent of the pre-BAPCPA average. Comparing any period in 2005 to the same period in 2006 will show a decline in 2006.

However, comparison between any two post-October time periods will show an increase in the later period. No matter how the numbers are spun, in less than a year bankruptcy petitions have already begun to increase dramatically, and most experts predict that the upward trend will continue.

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