Archive for the ‘Bankruptcy Statistics’ Category
Tuesday, May 31st, 2011
Recently released numbers on personal bankruptcy filings show that April’s numbers were down from both March 2011 and April 2010, more or less following the trends that experts have predicted for the remainder of this year. Here’s a closer look at the specifics, and what this means for you.
Breakdown of April Bankruptcy Figures
- The 21 business days in April saw 130,000 total bankruptcy filings, which comes to 6,177 filings per business day.
- The number of filings shows a decline of 2.9 percent from March, and 7.1 percent from April 2010.
- So far this year, filings have decreased each month at a rate somewhere between 5.6 percent and 8.2 percent compared to 2010 numbers.
- In the past 12 months, 4.9 in 1,000 people have filed bankruptcy petitions. The number in 2004 (before the new bankruptcy law was passed) was 5.5 per thousand.
According to these statistics, April 2011 bankruptcy numbers suggest a decline in bankruptcy filings both compared to recent months and to last year. Bankruptcy filing rates, though not as popularly cited as unemployment numbers, can be used to offer at least a partial picture of economic recovery.
Projected Bankruptcy Filings for 2011
Based on the numbers for April and 2011 so far, predictions for total bankruptcy filings this year include the following:
- 1.475 million bankruptcy filings if Americans continue filing at the daily average rate (5,876) for the first four months of 2011 combined;
- 1.525 million bankruptcy filings if we continue at April’s daily average rate (6,177); or
- 1.499 million bankruptcy filings if the last eight months of the year make up the same proportion of filings as they did in the last two years.
How does that compare with the recent past? In 2010, the country had 1.56 million total filings; in 2009, the total was 1.474 million; and in 2008, 1.118 million. If filings stay on track, then, it looks like 2010 might have been the peak year for bankruptcy filings and 2011 will be the beginning of a decline.
There is no guarantee, however, that bankruptcies will steadily decrease. After all, the housing market is still glutted with foreclosure properties and home prices don’t seem to be rising. As a new wave of foreclosures begins to affect homeowners, combined with sluggish growth in the jobs sector, the need for bankruptcy protection could climb or remain constant for a few years to come.
Bankruptcy Filings and the “New” Law
If nothing else, these latest bankruptcy numbers suggest (once again) that the Bankruptcy Abuse Prevention and Consumer Protection Act passed in 2005 had little real effect on bankruptcy filing totals.
Those truly in need of the financial relief and protection bankruptcy offers are still largely able to get that help from the bankruptcy court, despite the tightened restrictions the law introduced.
Posted in Bankruptcy Statistics, Bankruptcy and the Economy, Economy, Filing Bankruptcy, year in bankruptcy | Comments Off
Thursday, July 8th, 2010
According to a research by the American Bankruptcy Institute, consumer bankruptcy filings for the first half of 2010 were considerably higher than any six-month period since 2005.
The Wall Street Journal recently highlighted some of the key findings of the Institute’s study:
- Raw figures: During the first six months of 2010, consumer bankruptcy filings rose to 770, 117, which represents a 14 percent increase over filings made in the same period last year.
- Rise despite legislation: This figure for 2010 represents the highest number of bankruptcy filings since the Bankruptcy Abuse Prevention and Consumer Act was passed five years ago.
- More to come: The American Bankruptcy Institute anticipates at least 1.6 million bankruptcy filings before the end of the year.
- Debt in the desert: Sources indicate that the average national filing rate was 6,800 filings per million households. Nevada had more than double the national filing rate, coming in at 15,000 filings per million households. A partial explanation for this high figure is that Nevada also has the highest unemployment rate in the country.
- Bucking the trend: Places as diverse as Washington, D.C., Alaska, and South Carolina had the lowest filing rates, each falling below 40 percent of the national average.
While the last six months as a whole showed rising bankruptcy filings, there are also contradictory signs that bankruptcy filings may be on the decline.
In June, bankruptcy filings totaled 127,000, which is a seven percent drop from the number of filings in May. Moreover, total filings dropped in June for the third consecutive month.
Of course, this could be a blip in the large scheme of things, according to the National Bankruptcy Center. While June filings were down from this May, they still represented an 8 percent increase in filings compared to June of 2009.
What Caused the Rise in Filings?
According to Bloomberg Businessweek, the rise in bankruptcy filings is largely attributable to the combination of rising consumer debt and low savings rates.
As consumers spend more and save less, the potential for crippling debt rises significantly. Moreover, if consumers do start spending less, this may have a negative impact on investments in business, another key factor in economic recovery.
Poor consumer spending habits are further exacerbated by the shaky employment situation. Sources indicate that the employment rate was further affected by the loss of 225,000 temporary workers who had helped conduct the 2010 census.
Additional Resources
If you might be one of the expected 1.6 million bankruptcy filers this year, consider contacting a local attorney to help you with the bankruptcy process.
Posted in Bankruptcy Filings, Bankruptcy News and Events, Bankruptcy Statistics, New Bankruptcy Law | Comments Off
Tuesday, July 6th, 2010
Consumer bankruptcy filings are up approximately 14% since the same time last year. The causes of the filings are obviously the recession, unemployment and the housing crisis (the Big Three). In South West Florida, we know the big three all too well. It is expected that over 1.6 million people will file for bankruptcy protection this year.
I have mixed emotions on this issue. First, I think more people should consider the bankruptcy option. I can say this because I understand the bankruptcy process and the benefits it offers. Likewise, I have an open-mind to bankruptcy. I see many people who say that bankruptcy is the worst thing a person can do, and unfortunately, that is not true. Bankruptcy is usually not the worst option.
Second, from a purely economic standpoint, bankruptcy is good for society because it gets the bad money off the books and out of the economy. Second, it allows for a fresh start and gets people, who were formerly shunned from the economy, back into the game.
Third, bankruptcy is merely a form of financial planning. When you get right down to it, that is all it is. All this nonsense about strategic defaults of homeowners is just garbage. People have always made decision on when to cut their losses. If the mortgage companies thought that this would not happen, that was naive. You can only push people so far before they will push back. The mortgage companies and servicers have taken too much, and now the homeowners are saying no more.
Why doesn't someone tell our Elected Officials what is going on in this Country and Southwest Florida? Do you think we are that clueless? I think it's ironic that some of our elected officials are worried about losing their jobs?
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog, www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.com, and the firm's mortgage modification blog.
Posted in Bankruptcy News, Bankruptcy Statistics, Sign of the Times | Comments Off
Tuesday, June 15th, 2010
Personal bankruptcy filings for the month of May have increased compared with a year ago, but dropped slightly compared with a month earlier, the American Bankruptcy Institute reported last week.
Here’s a breakdown of the data.
- Total filings: In May 2010, 136,142 personal bankruptcy cases were filed, a nine percent increase from May 2009, when 124,838 cases were filed.
- Month-to-month change: May’s total marked a six percent drop from April of this year, when 144,490 cases were filed.
- Distribution: Of the cases filed, 26 percent were under Chapter 13 of the U.S. Bankruptcy Code, and most of the remaining 74 percent were under Chapter 7.
- Projected total: Based on figures collected so far this year, most sources estimate that personal bankruptcy filings this year will total about 1.6 million, a 10 percent increase over the 1.44 million filed in 2009.
So what can these numbers tell us about the economic situation in the U.S.? Let’s take a look.
The Effect of Unemployment
While the decrease in filings from last month can be seen as good news, the increase from this time last year could be read in just the opposite way, meaning that these bankruptcy figures provide no clearer picture of the economic situation than any other economic indicator.
- Long-term unemployment: The year-to-year increase we see in bankruptcy filings could be one of the effects that the nearly consistent unemployment rate has had—people who have been out of work for several months may have depleted their cash reserves and be turning to bankruptcy for financial relief.
- Chapter 7 vs. Chapter 13: Another indicator that unemployment is hurting the country is that Chapter 7 cases outnumber Chapter 13 cases nearly two to one, indicating that most people in financial distress cannot afford repayment plans to resolve their outstanding debts and have relatively little income.
- The role of mortgages: In addition to the problem of unemployment, mortgage costs may be pushing more filers toward Chapter 7. Despite the Obama Administration’s Home Affordable Modification Program (HAMP), millions of Americans with unaffordable mortgage loans have not been able to have their loans modified, meaning that they’re stuck with expensive (and, in many cases, too expensive) mortgage payments.
If you’re struggling with unwieldy debt, an unmanageable mortgage or other financial burdens, you may want to consider consulting with a bankruptcy attorney from your area to see whether personal bankruptcy protection is right for you.
Posted in Bankruptcy Statistics, Bankruptcy and the Economy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy | Comments Off
Sunday, April 11th, 2010
Bankruptcy filings among American individuals and businesses rose to record levels in March of this year, according to a report by Reuters. Here’s a look at the numbers and what they mean for bankruptcy in the U.S.
- 158,141 bankruptcy petitions were filed in the U.S. during March, 2010, according to numbers released by Automated Access to Court Electronic Records (AACER).
- This number represents a 35 percent increase from February, 2010, and a 20 percent increase from March, 2009.
- Prior to March, the most filings during a single month since the implementation of the new bankruptcy law in 2005 occurred in October 2009, when 133,393 cases were filed.
- Of the total cases filed, 149,979 bankruptcy petitions were from individuals and 8,162 petitions were from businesses.
- Nearly three-quarters of all petitions filed were under Chapter 7 of the U.S. Bankruptcy code; the remainder were mostly Chapter 13 cases, with a few Chapter 11 cases as well.
These numbers are significant for a number of reasons.
BAPCPA and Filing for Bankruptcy
The nation’s bankruptcy laws were overhauled in 2005 with the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). Because the law was expected to make bankruptcy protection more difficult to get, filings soared just before the law passed as people sought protection under the old law.
In 2005, a record year for bankruptcy filings, 2.08 million cases were filed, with both individuals and businesses filing at higher rates than usual.
After the late-2005 rush to file, there was a lull, but in the years following, filings have increased steadily. Last year, 1.47 million bankruptcy cases were filed in the States, the highest since the law’s passage, and March’s numbers suggest that this year could have an even higher number.
Morals of the Story
The lessons here are important:
- You’re not alone: Many people delay filing for bankruptcy because of the stigma associated with it. These figures clearly show that significant numbers of Americans are struggling with debt.
- Bankruptcy isn’t out of reach: Many people feared that, with the BAPCPA laws in place, qualifying for bankruptcy protection would be almost impossible. Again, millions of Americans have been helped since the new law took effect, showing that much of the fear was unfounded.
Additional Resources
Bankruptcy Abuse Prevention and Consumer Protection Act (PDF)
Posted in Bankruptcy Laws, Bankruptcy News and Events, Bankruptcy Statistics, bankruptcy trends | Comments Off
Wednesday, January 6th, 2010
Consumer bankruptcy filings reached 113,274 in December, 2009, an increase of 33 percent over December, 2008, according to data released by the American Bankruptcy Institute, bringing an end to the highest year for bankruptcy since 2005.
The December total was also a slight increase over the 112,152 consumer bankruptcies filed in November, 2009, a sign that even the holiday season could have exacerbated consumers' financial stress.
Ten months in 2009 had total consumer filings top 100,000--only January and February were below that mark.
Bankruptcy Chapters
According to the ABI, 28 percent of consumer bankruptcies in December were Chapter 13 bankruptcy filings, with the majority of consumer filing Chapter 7.
Bankruptcy is often considered a lagging economic indicator, and typically remains high even with other signs of economic turnaround can be seen. The unemployment rate, for example, dropped slightly in November from its October high of 10.2 percent, and is expected to have dropped in December as well.
Posted in Bankruptcy Statistics, december, year in bankruptcy | Comments Off
Tuesday, December 22nd, 2009
As America closes out 2009 with roughly 1.4 million bankruptcy filings, a new survey reveals the possible economic factors behind the surge.
Respondents were asked which economic factor forced them to consider bankruptcy, and how many people they know who had also considered bankruptcy in the past year.
Posted in Bankruptcy Statistics, Setting the Record Straight about Bankruptcy, bankruptcy survey | Comments Off
Tuesday, December 22nd, 2009
As America closes out 2009 with roughly 1.4 million bankruptcy filings, a new survey reveals the possible economic factors behind the surge.
Respondents were asked to select which economic factor forced them to consider bankruptcy, and how many people they know who had also considered bankruptcy in the past year.
Add this graphic to your site:
Add this graphic to your site:
Read the full press release: Job Loss, Credit Crunch Driving Bankruptcy Inquiries
Posted in Bankruptcy Statistics, Setting the Record Straight about Bankruptcy, bankruptcy survey, economic statistics | Comments Off
Monday, November 30th, 2009
The number of bankruptcy filings in the third quarter of 2009 reached their highest point since 2005, and soared 33% above the total from the previous year, according to statistics from the American Bankruptcy Institute.
Consumer and business bankruptcies filed between August and October reached 388,485 compared to 292,291 for Q3 2008. Total filings between January and October, 2009, reached 1,100,035 compared to 841,496 in the same period in 2008, and close to the total 1,117,771 bankruptcies filed in 2008.
October saw the most personal bankruptcy filings since October, 2005, when more than 600,000 consumers filed to meet the deadline before the new bankruptcy law took effect.
"The spike in bankruptcy filings for both consumers and businesses reflect the continuing effects of today's weak economy," said Samuel Gerdano, ABI executive director.
"With unemployment surpassing 10% and credit to businesses remaining tight, consumers and businesses are increasingly turning to the financial relief of bankruptcy."
Bankruptcy filings are expected to exceed 1.4 million in 2009.
Posted in Bankruptcy, Bankruptcy Statistics, Bankruptcy and the Economy, Business Bankruptcy, Personal Bankruptcy | Comments Off
Thursday, November 19th, 2009
The middle class is increasingly resorting to bankruptcy despite college education, home ownership and other historical signs of success, according to a new study.
While the middle class's investments in higher education and real estate have typically shielded them from the hardest economic storms, that is no longer the case.
"The Vulnerable Middle Class: Bankruptcy and Class Status," a new study by Elizabeth Warren, Harvard Law School Leo Gottlieb professor of law, and Deborah Thorne, Ohio University associate professor of sociology illustrates how bankruptcy demographics have changed in recent decades.
An exclusive preview of Warren and Thorne's new book by USA Today shows how bad mortgages, rising unemployment, and the trappings of success led millions of Americans into debt.
Warren and Thorne compared annual bankruptcy filings from 1991 through 2007, and saw an increasing trend of middle class Americans, dispelling the myth that bankruptcy was a tool for the destitute or extreme spenders.
The article profiles several bankruptcy filers, including a single mother who went from earning $275,000 a year to filing bankruptcy after starting her own business, as well as a couple nearing retirement whose dropping home value left them without a safety net.
The study's authors admit that much of the data comes from recent "boom" years, and ends at the same point the recent recession began.
They expect that looking back at the past two years—and likely into the future—will show an even greater upswing in middle class Americans turning to bankruptcy protection.
Posted in Bankruptcy Statistics, Setting the Record Straight about Bankruptcy, middle class | Comments Off
