As per the reports published by NBKRC (National Bankruptcy Research Center), bankruptcy filings in 2010 have been significantly higher as compared to 2009. The bankruptcy filings are about 15% higher during the first 5 months in 2010, in comparison to the same time period in 2009.
Recent researches reveal that the bankruptcy filings are highest in the Southeast and the Southwest region. Nevada and Georgia have topped the list of household-adjusted bankruptcy filing rates, whereas lowest filing rates have been in the District of Columbia, Alaska and South Carolina.
Industry experts are of the view that the recent economic downturn (2007-2009) has led to more number of bankruptcy filings, especially among the middle-class people. As per the National Bankruptcy Research Center, personal bankruptcy filings have hit 1.41 million in 2009 that is 32% more from the year 2008.
In the 12-month period that ended in 31st March 2010, the bankruptcy filings have increased by about 27% as compared to that of 2009. As per the statistics released by the Administrative Office of the US Courts, there have been a total of 1,531,997 bankruptcy filings in the 12-month period that ended in 31st March 2010. It is significantly more than that the bankruptcy filings in the 12-month period that had ended in 31st March 2009. The figures show highest consumer-bankruptcy filings since 12-month period that had ended in March 31 2006, when the BAPCPA (Bankruptcy Abuse Prevention and Consumer Protection Act of 2005) had come into effect.
Attorneys, who help people to file bankruptcies, have noticed certain bankruptcy trends in the recent times. The trends are discussed below.
- More Chapter 7 filings in recent times: The bankruptcy trends in 2009 and 2010 reveal that Chapter 7 bankruptcy filings are much more as compared to Chapter 13 bankruptcy. Chapter 7 filings have risen to about 34% in May 2010 in comparison to March 2009; whereas, Chapter 13 filings have risen to about 12% in the same time period.
- High income/employed people filing more: A few years back, people earning between $(40,000 – 80,000) annually used to file bankruptcy. However, in the recent times, bankruptcies are comparatively more common among people earning high-income salary, as much as 6 figures annually. Due to economic downturn, many people have either lost their jobs or had to manage with relatively smaller paychecks. So, according to industry experts, people are yet to adjust their lifestyle as per their smaller paychecks and they’re also struggling to pay off debts.
The trend also reveals that employed people are filing more in comparison to those who’ve lost their jobs. This may be due to the fact that the home values have fallen significantly month after month and the homeowners have lost the hope that the property values would recover soon. As a result, the homeowners are filing for bankruptcy in order to get out from their upside-down mortgage. As per industry experts, bankruptcy filing may continue to rise more in the rest of 2010.
As per the reports published by NBKRC (National Bankruptcy Research Center), bankruptcy filings in 2010 have been significantly higher as compared to 2009. The bankruptcy filings are about 15% higher during the first 5 months in 2010, in comparison to the same time period in 2009. Recent researches reveal that the bankruptcy filings are highest in the Southeast and the Southwest region. Nevada and Georgia have topped the list of household-adjusted bankruptcy filing rates, whereas lowest filing rates have been in the District of Columbia, Alaska and South Carolina. Industry experts are of the view that the recent economic downturn (2007-2009) has led to more number of bankruptcy filings, especially among the middle-class people. As per the National Bankruptcy Research Center, personal bankruptcy filings have hit 1.41 million in 2009 that is 32% more from the year 2008. In the 12-month period that ended in 31st March 2010, the bankruptcy filings have increased by about 27% as compared to that of 2009. As per the statistics released by the Administrative Office of the US Courts, there have been a total of 1,531,997 bankruptcy filings in the 12-month period that ended in 31st March 2010. It is significantly more than that the bankruptcy filings in the 12-month period that had ended in 31st March 2009. The figures show highest consumer-bankruptcy filings since 12-month period that had ended in March 31 2006, when the BAPCPA (Bankruptcy Abuse Prevention and Consumer Protection Act of 2005) had come into effect. Attorneys, who help people to file bankruptcies, have noticed certain bankruptcy trends in the recent times. The trends are discussed below.
- More Chapter 7 filings in recent times: The bankruptcy trends in 2009 and 2010 reveal that Chapter 7 bankruptcy filings are much more as compared to Chapter 13 bankruptcy. Chapter 7 filings have risen to about 34% in May 2010 in comparison to March 2009; whereas, Chapter 13 filings have risen to about 12% in the same time period.
- High income/employed people filing more: A few years back, people earning between $(40,000 – 80,000) annually used to file bankruptcy. However, in the recent times, bankruptcies are comparatively more common among people earning high-income salary, as much as 6 figures annually. Due to economic downturn, many people have either lost their jobs or had to manage with relatively smaller paychecks.
So, according to industry experts, people are yet to adjust their lifestyle as per their smaller paychecks and they’re also struggling to pay off debts. The trend also reveals that employed people are filing more in comparison to those who’ve lost their jobs. This may be due to the fact that the home values have fallen significantly month after month and the homeowners have lost the hope that the property values would recover soon. As a result, the homeowners are filing for bankruptcy in order to get out from their upside-down mortgage. As per industry experts, bankruptcy filing may continue to rise more in the rest of 2010.
