Consumer Bankruptcy Filings: Highest in Four Years!

According to ConsumerAffairs.com, consumer bankruptcy filings in the United States are at an all-time high since the new bankruptcy laws took effect in 2005.

A total of 126,434 bankruptcy petitions were filed in July of 2009, the highest monthly reading in four years.  This number represents a 34.3 percent increase nationwide from the same period one year ago, and an 8.7 percent increase from the number of consumer bankruptcy filings in June 2009.  June's total was 116,365.

Chapter 13 bankruptcy accounted for 28.3 percent of all consumer cases in July, a popular type of bankruptcy for individuals with a secure, regular income. A reason for the increase in Chapter 13 filings could be that the new bankruptcy laws have made it more difficult for people to file for  Chapter 7 bankruptcy protection.  Under Chapter 7 bankruptcy, a debtor liquidates his or her assets in order to pay back his or her creditors.

"Today's bankruptcy filing number reflects the sustained and growing financial stress on U.S. households," said ABI Executive Director Samuel J. Gerdano. "Rising unemployment on top of high pre-existing debt burdens is a formula for higher bankruptcies through the end of this year."

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