Personal Bankruptcy Filings Rise in FY2010

Submitted by Jen Jones on Mon, 11/15/2010 - 12:13pm

Personal Bankruptcy Filings Rise in FY2010

While some experts are calling the latter portions of 2010 a new era of economic recovery, bankruptcy filings remain in true recession-era form.  In fact, according to the 2010 Fiscal Year statistics from the Administrative Office of the U.S. Courts, the number of bankruptcies filed between October 1, 2009 and September 30, 2010 increased from 1,402,816 to 1,596,355, marking an increase of 13.8%. And even though Chapter 11 (business and large individual) filings decreased, from 14,745 to 14,191, a 3.8% drop, and business filings overall also went down, from 58,721 last year to 58,322 this year, a 0.7% decrease, non-business or personal filings went up under all other chapters of the Bankruptcy Code, rising from 1,344,095 to 1,538,033, or 14.4%.

In short, these figures reveal increases in most Chapter bankruptcy filings, including Chapter 7, Chapter 13, and Chapter 12 cases. According to official Administrative Office figures, this means in FY2010:

  • Chapter 7 filings in FY 2010 totaled 1,146,511, up 15.9 percent from the 989,227 chapter 7 filings in FY 2009.
  • Chapter 13 filings rose 9.2 percent, from 398,210 in FY 2009 to 434,839 in FY 2010.
  • Chapter 12 filings in FY2010 totaled 707, up 45.2 percent from the 487 chapter 12 filings in FY 2009.

The reason so many are turning to the benefits of bankruptcy is apparently a sign of the continuing tough economic times:

Chapter 13 Helps Fight Foreclosures Fears
Everywhere you look there’s a new report on how mortgage modifications aren’t happening and home foreclosure figures are through the roof. And with more failed foreclosure prevention programs than you can shake a stick at, the number of homeowners facing the loss of their homes has steadily increased with the country’s real estate woes.  As a result, many beleaguered borrowers who are having difficulty making their mortgages can save their biggest investment by filing for Chapter 13—a bankruptcy that allows debtors to restructure their debt into a tailored repayment plan, which in turn settles creditor claims and keeps secured property in the debtor’s possession.  In some circumstances, it may be possible that a debtor is not required to pay anything to her unsecured creditors through Chapter 13. 

Chapter 7 Combats Unyielding Unsecured Creditors
In the wake of the economic meltdown, wells of unsecured consumer credit are drying up, leaving many forced to make due, and make up, for years of spending outside of their means. For these folks, a Chapter 7 liquidation bankruptcy allows debtors to dissolve unsecured debts such as credit cards and medical bills, allowing them to get back on the right track on the road to healthier spending habits.

Chapter 7, 13, and 12 Bankruptcies Make a Tough Job Market Manageable
The weak job market is an obvious culprit leading many to seek the safe harbors of bankruptcy protection, including Chapter 13, Chapter 7, and even Chapter 12, a bankruptcy chapter designed to help "family farmers" or "family fishermen."  And for the millions unemployed for more than a year, mounting debts paired with dwindling savings and a lack of realistic bankruptcy alternatives leads many to the doors of the nearest bankruptcy attorney—especially with recent apathy towards extending much-needed unemployment benefits. Bankruptcy options allow jobless Americans a second chance to hold on to savings, retirement funds, and their assets, while they figure out their next best steps.

So, if you’re one of the millions struggling with unwieldy debt, long-term unemployment, or an unmanageable mortgage, bankruptcy can work for you as it has for so many this year. Knowing a qualified bankruptcy attorney can also help you to save money, time, and make you more self-sufficient in an uncertain future, yielding the right kinds of support, information and insights—at a low cost— for a viable and secure future beyond our own “Great Recession.” The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to +1-919-646-2654, or make your own appointment online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.

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