Bankruptcy Filings on the Rise—No Surprise!
Fact: More than1.1 million bankruptcy cases were filed in the United States during 2008. That is the first year since 2005 in which the number of bankruptcies in this country topped the one million mark. These statistics are from the American Bankruptcy Institute, an Alexandria, Virginia-based, nonpartisan research organization that researches and analyzes bankruptcy issues.
Fact: Total bankruptcies filed in the U.S. increased 36% to 711,500 in the first half of 2009 as compared to the same period in 2008. During the same period, businesses filing for Chapter 11 reorganizations increased 113% and Chapter 7 business liquidations rose 57%.
According to Samuel Gerdano, Executive Director of the American Bankruptcy Institute, in their August 2009 newsletter, the increase in bankruptcy filings “is a product of continued financial stresses weighing on both consumers and businesses. Gerdano added that bankruptcies in the U.S. are expected to surpass 1.4 million by the end of 2009.
In a September 1, 2009 article at www.nwitimes.com, Cal Bellamy, partner with Krieg DeVault LLP, states that businesses are caught in the ‘perfect storm’ of having difficulty obtaining credit for daily operations combined with a slowdown in payments or reduction in orders from customers. He continued saying that the increase in business bankruptcies may be attributed to the fact that conditions may not have improved enough to sustain all businesses, despite the beginnings of a national economic recovery.
In the Midwest, the bellwether of the country, Indiana bankruptcies increased by 28.4% (24,096 filings) and Illinois bankruptcies rose 32.9% (35,902 filings), during the first half of 2009. Both states are presently on pace to beat last year’s totals, the highest since 2005.
Darrolyn Sharp, Executive Director of a Merrillville, Indiana-based, nonprofit credit counseling agency, said that consumer bankruptcies represented over 97% of all filings in both states. She stated that unemployment and underemployment are two of the main reasons for the high numbers of bankruptcy filings. She estimates that one of five people who consult with the agency may need to file for bankruptcy to reorganize their debt.
If you find yourself needing to file for Chapter 7 or Chapter 11 bankruptcy, call a Legal Helper attorney for experience and knowledge that you can trust. Call toll-free 800-260-1402 today or log onto www.legalhelpers.com.
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