Bankruptcy Filings Surge To A Five Year High
Posted on August 25th, 2010
Personal bankruptcy filings for the year ended June 30, 2010 surged to a five year high, hitting 1.57 million, a 20% increase from the prior year. Furthermore, in the period between April and June, there were 422,061 bankruptcy filings, a 9% increase from the 388,148 in the previous quarter, and up 11% from 381,073 a year earlier.
Quarterly filings surpassed 400,000 for the first time since a record 667,431 bankruptcies were filed in the fourth quarter of 2005, when Congress passed new bankruptcy laws that made it harder for people and businesses to file Chapter 7 bankruptcy.
The huge spike in filings in 2005 were primarily due to individuals and businesses rushing to file bankruptcy before the new bankruptcy laws took effect whereas the current steady rise in bankruptcy filings since 2006 is directly attributable to the overall weakness in our local, state and national economies.
Indicatively, Nevada had the highest rate of filings on a per capita basis in the last year, with 11.74 per 1,000 people, while Alaska had the fewest, with just 1.58 per 1,000. The states with the most bankruptcies were California (241,975), Florida (107,373), Illinois (80,801), Georgia (77,809), and Ohio (72,924).
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