Some 330,477 people filed bankruptcy between January and March of this year. Do the math. That's an average of more than 110,000 filings per month, 27,500 per month, and just shy of 1,000 per day. These numbers are up ten percent over last quarter, and 35 percent from a year ago. Indeed, more than 1.2 million people filed bankruptcy between March 2008 and March 2009. The spikes in filing rates are the highest since the fourth quarter of 2005, when record numbers of Americans rushed to file bankruptcy before Congress enacted tougher bankruptcy laws. California saw the worst of it this past quarter, weighing in with a total of almost 43,000 filings. Florida took second with almost 21,000 filings.
The second quarter of 2009 appears bound to be worse. Between April and May of this year, 250,456 people filed consumer bankruptcies. At that pace -“ over 125,000 per month -“ more than 375,000 Americans will file this quarter, an almost 15 percent increase over the first quarter. Business bankruptcies are also way up -“ 64 percent this March over last. This should come as no surprise: the news is littered with daily reports of corporate behemoths tumbling under the current pressures of the recession: GM and Chrysler -“ the biggest of the biggest -“ are in the midst of wading through the largest bankruptcy filings the U.S. economy has ever seen.
So what gives? Well, nothing new, really. It's more of the same story we've seen over the last year and a half: a continued downturn in virtually every major area of the economy. Unemployment is sky-rocketing around the country. An overall jobless rate of 10 percent is right around the corner at this pace, and several states are already up over this benchmark: in Michigan, the current rate is 12.9 percent; in Oregon, 12 percent of the workforce is without a job; California's dealing with an 11 percent jobless rate; and North Carolina is right there at the top of the list too, with a jobless rate of 10.8 percent.
Foreclosure rates also continue to climb all over the country. Nevada holds the current record: statewide, one in every 76 households is in some stage of the foreclosure process. Looking at metro areas, Merced, California tops the list with an astonishing rate of one in every 59 households. These problems are certain to continue in the coming months, as many more homeowners are still holding adjustable rate mortgages that have yet to even reset. And, of course, these do not include the thousands of other inevitable mortgage defaults and foreclosures that will result from the continuing job losses around the country.
The point is, we're in for a long and difficult ride before this recession is over. The downward pressure on the economy continues to build every month, pushing the recovery further and further out into the future. Some blame the increase in bankruptcy filings for deepening, or even creating, these problems. But, in most cases, it's just the opposite: the worsening conditions in the economy are forcing people to file bankruptcy, because their debts have become unmanageable for reasons largely beyond their control. And they certainly can't be blamed for invoking the protection of the bankruptcy laws to bridge this gap: that is exactly what bankruptcy was designed to do.
If you're dealing with unmanageable debts, it's time to learn how bankruptcy can help you weather this storm. Call a bankruptcy attorney today. In North Carolina, contact The Law Offices of John T. Orcutt, with convenient office locations in Raleigh, Durham, Fayetteville, and Wilson. Call (toll free) 1-888-234-4181, to set up a free, confidential debt consultation. Visit www.billsbills.com for more information.