Bankruptcies Up In 2009

Posted on January 11, 2010

Personal bankruptcy filings sky-rocketed in 2009. In fact, some have reported that bankruptcies filed by individuals have risen by over 30%. With the current economic climate, it should not be a surprise as more Americans face serious financial hardships. With unemployments on the rise and home foreclosures continuing to climb, it is expected that more people will make the difficult decision to file bankruptcy.

In 2009, the U.S. saw the total number of filings pass 1.4 million. With last year’s filing increase, the total filing number was higher than it has been since 2005, the year the government significantly changed the bankruptcy laws in an attempt to drastically reduce the number of filings. The 2009 filing numbers are over double the numbers we saw in the year 2007.

Chapter 7 bankruptcy filings were particularly high. As of November, these filings were reported to have increased by just under 50%. Under Chapter 7 filings, debtors can liquidate assets to pay a portion of debt while eliminating some of the debt as well.

Chapter 7 filings weren’t the only bankruptcy filing types to experience an increase. Chapter 13 filings were also up. These filings climbed by around twelve percent. Chapter 13 filings also constitute a much smaller part of the total filings making up less than one-third of total filings made.

Bankruptcy filing increases varied from state to state. For example, Arizona saw huge filing increases while South Carolina saw a very small increase. This demonstrates the different effect of legislation and economic factors unique to the individual states.

As the national rate of unemployment continues to loom over ten percent, many citizens that had been financially secure are now in a position that bankruptcy makes more sense. Coupled with the decreased housing market, it is no surprise that many individuals are now strongly taking filing bankruptcy into consideration.

With more and more Americans considering bankruptcy as a real option, the stigma associated with filing bankruptcy is on the decline. Many more families are either directly effected by financial problems or know someone who is experiencing serious financial hardship.

When you are facing creditor harassment, wage garnishment, or foreclosure, learning your options needs to be your first priority. People often feel helpless when they find themselves in financial situations like these. Get a free bankruptcy review from Massachusetts Bankruptcy Attorney Matthew Desrochers. Debt issues are not something to take lightly, but it is not as scary as you might think.