Times are indeed tough—more than one million Americans filed Chapter 7 and Chapter 13 bankruptcy last year.

As the U.S. economy sunk, the number of Chapter 7 and Chapter 13 bankruptcies rose 33 percent, according to data from U.S. bankruptcy courts compiled by bankruptcy data firm, Automated Access to Court Electronic Records.

Bankruptcy data shows there were 819,115 personal bankruptcy filings in the U.S. during 2007.

In 2008, that number rose to 1,086,130. While the number of bankruptcy filings in 2008 falls far short of the record 2.1 filings in 2005, it’s still a significant increase.

The number of U.S. personal bankruptcies in 2008 was the highest since the new bankruptcy law went into effect.

The Reason for the 2005 “Bankruptcy Rush”

In 2005, many consumers raced to file Chapter 7 bankruptcy before the bankruptcy reform law took effect.

After BAPCPA took effect, it became more expensive to file bankruptcy and some people weren’t eligible to file Chapter 7, making Chapter 13 bankruptcy more appealing to some.

Some States Hit Harder Than Others

Although the number of bankruptcy filings increased everywhere, some areas of the country seemed to be hit harder by the recession.

The greatest increases in per capita bankruptcy filings were seen in Nevada, Delaware, California, Rhode Island and Florida, where the effects of the collapse of the housing market, mass layoffs and a generally poor economy were particularly pronounced.

For the second year in a row, Tennessee had the highest per capita rate of personal bankruptcy filings.

Texas saw an increase of only 1,500 more Chapter 7 and Chapter 13 bankruptcies, making it the state with the smallest increase in bankruptcy filings.

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