Bankruptcies continue to climb
The number of personal bankruptcies filed in the first nine months of 2010 was an 11% increase over last year.
The evidence can be seen in the latest bankruptcy statistics. U.S. consumer bankruptcy filings totaled 1.16 million nationwide during the first nine months of 2010, according to the American Bankruptcy Institute. That amounts to an 11% increase over total consumer filings for the same period a year ago.
The ABI analyzed data from the National Bankruptcy Research Center. The consumer filings for the three quarters of 2010 represent the highest total since 2005, when Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act to try to stem the tide of filings.
"While the 2005 bankruptcy overhaul law aimed to reduce filings, overall consumer debt and continued financial stress have led to consumer bankruptcies climbing back to pre-BAPCPA levels," said ABI executive director Samuel J. Gerdano. "We expect that there will be nearly 1.6 million new bankruptcy filings by year end."
The overall consumer filing total of 130,329 last month was 4.4% more than the 124,790 consumer filings recorded in September 2009. Last month's total also represented a 3.3% increase from the August total of 127,028 consumer filings.
Chapter 13 filings constituted 30% of all consumer cases in September, a slight increase from August.
When Congress changed the bankruptcy law in 2005, there were plenty of warnings that it could take a harsh toll on consumers. The measure garnered bipartisan support, and had the objective of making it more difficult for consumers to walk away from debts.
"This bill was designed to point a thousand daggers squarely at consumers in trouble ... it's like narrowing the doors to a hospital and expecting everyone to squeeze their way in," she said in opposition to the bill.
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