The number of bankruptcy filings in June was 120,623, or an average of 5,483 a day, a drop of 6.2 percent from May, when filings totaled 122,775, or 5,846 a day, according to a report from Epiq Systems, which tracks bankruptcy filings. There was one additional day to file in June compared with May. Average daily filings are down nearly 10 percent from June of last year.
In 2010, bankruptcy filings had skyrocketed to 1.54 million after two years of massive layoffs and a wave of foreclosures . But so far this year, a little more than 700,000 Americans have filed bankruptcy; most of them filed Chapter 7 bankruptcy . Only a paltry 25% of bankruptcy filers filed Chapter 13 bankruptcy , most likely because many are unable to complete the repayment plans due to their lack of employment or low wages.
But is the sudden drop in bankruptcy filings a sign that the economy is improving? Not really. Unemployment is still high and many debtors have chosen to delay a bankruptcy filing because they either do not have any income or because they believe they don’t have “enough” debt to justify a bankruptcy filing. It’s important that debtors don’t rely on their assumptions about what constitutes enough debt when considering a bankruptcy filing. Speak with a bankruptcy attorney to find out exactly how beneficial a bankruptcy filing could be to your financial situation.
(source: NYTimes.com )