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Bankruptcy Filings Hit Record Levels

Posted By admin || 6-Nov-2009

According to an article in Bloomberg, more Americans filed bankruptcy in October than in any month since changes to the U.S. bankruptcy code were put in place in 2005.  In the month of October alone, bankruptcy fillings for individuals rose 25 percent from a year earlier to 131,200 filings.  And since January 2009, there have been more than 1.2 million bankruptcy filings, surpassing the 1.1 million bankruptcy filings for 2008. That number is expected to grow.

The article said:

"The American Bankruptcy Institute estimates personal filings will reach 1.4 million by the end of the year. That would still be less the record 2.1 million bankruptcies in 2005, when 630,000 Americans filed in the two weeks before bankruptcy law revisions made it more difficult discharge debt."

The high number of bankruptcy filings is being fueled by more job losses and record high unemployment nationwide. And another factor often not mentioned is the increased number of business bankruptcies that are creating a domino effect in the marketplace.  Many businesses who file bankruptcy implement huge job losses before and after their bankruptcy filing just to survive. Those unemployed workers are finding it difficult to secure comparable work in time enough to avoid exhausting their savings and defaulting on their credit. Eventually they are forced to file bankruptcy to get a fresh start.

Categories: Bankruptcy
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