Monday, January 3, 2011

Personal Bankruptcies up 9% for 2010

Here are some interesting facts from today's WSJ:

- The number of Americans filing for personal bankruptcy topped 1.5 million last year, as high long-term jobless rates and depressed home prices drove more households to seek court protection.

- Personal bankruptcies rose to 1.53 million, up 9% from 2009, the highest level since a revamp of the law took effect in 2005, according to the American Bankruptcy Institute, an association of attorneys and other bankruptcy professionals, and the National Bankruptcy Research Center.

- Conditions have improved in the Southeast, with filings dropping last year in Tennessee, South Carolina and Alabama. But the Southwest continues to struggle. In California, bankruptcies were up 25% from a year earlier. In Arizona, they rose nearly 24%.

- The 2005 revision of the bankruptcy statute was designed to make it more difficult for consumers to shed their debts. It aimed to steer more debtors into Chapter 13, where debtors work out a repayment plan, instead of Chapter 7, where filers forfeit their assets and their debts are forgiven. But only about a third of debtors file under Chapter 13.

- In all, some four million consumer bankruptcy filings have been recorded in the past three years. Surveys of debtors by the nonprofit Institute for Financial Literacy indicate that while most earn less than $30,000 and lack college degrees, a growing minority are middle-class families with incomes above $60,000 or college degrees.



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