With the economy only just now beginning to look up a bit, it comes as no surprise that the personal bankruptcy totals for the first nine months in 2009 passed the 1 million mark. This is the highest those statistics have been in the last four years.

According to a figure from the American Bankruptcy Institute (ABI) this same time last year, personal bankruptcy claims were up 35% in 2008. Only 37.6% percent of those filing personal bankruptcy cited job loss as the reason. This year, that percentage is estimated to be significantly higher due to the fact that unemployment reached 9.8% in September 2009.

Are you struggling with your finances? Filing a personal bankruptcy may be the solution for you. Contact a skilled bankruptcy attorney by calling 800-260-1402 today. Don’t wait till things get further out of control to contact us for help. Take that first step now.   

According to the American Bankruptcy Institute (ABI) and the National Bankruptcy Research Center, the number of consumer bankruptcies filed has topped one million for the first three quarters of 2009, the highest numbers since the overhaul of the bankruptcy system in 2005. The ABI, an organization comprised of attorneys, accountants and other bankruptcy professionals, showed personal bankruptcy filings at 1,046,449 as of September 3, 2009. According to the institute’s data, this number is in comparison to 773,810 personal bankruptcy filings for the same period a year ago. September 2009 filings were 41% higher than those of September 2008, at 124,790.

The entire U.S. bankruptcy system was revamped four years ago to make it more difficult for people to discharge their debts by filing for personal bankruptcy. In that year, before the new laws took effect, 1.35 million Americans filed for bankruptcy during the first nine months.

However, this brutal economy has sent bankruptcy filings soaring again; the ABI expects personal bankruptcies to surpass 1.4 million by the end of 2009. "Bankruptcy filings continue to climb as consumers look to shelter themselves from the effects of rising unemployment rates and housing debt," the institute's Executive Director Samuel J. Gerdano said in a Wall Street Journal article by Sara Murray.

When Does Bankruptcy Protection Not Protect Against Lawsuits?

You may have heard recently that the Peanut Corporation of America allocated money to award injury claims to at least 677 people sickened with salmonella from eating peanuts.

The Peanut Corporation of America conducted a bankruptcy trial in Western Virginia after their peanuts were used in peanut butter, crackers, cookies and many other manufactured foods.  A food borne illness of that magnitude and scope is indeed difficult to track; the 9 deaths proven to be a direct result of the peanut salmonella could only scrape the surface as more families come forth for their injury claims from the newly allocated 12.7 million dollar fund.

The Peanut Corporation was held exclusively responsible for those 677 sicknesses and 9 deaths, which originally drove them headfirst into a wide-scale bankruptcy, as did the criminal investigation that they narrowly avoided.  Before their bankruptcy, they had 250 victims involved in injury claims lawsuits.  Though injury claims are being awarded, the funds actually are not coming out of the Peanut Corporation of America’s pockets but their insurance.  Their U.S. Bankruptcy Judge ordered 12.7 million from their insurance carrier, and their bankruptcy essentially keeps their pockets unscathed from the salmonella fiasco.

If you are filing a personal bankruptcy in the wake of a lawsuit, you are not alone.  A huge percentage of people who file do so to avoid the blunting effects of lawsuits from a creditor, a bank levy, eviction and repossession.  Bankruptcy however cannot protect against government claims like child support, civil violations like state property damage, or a pile of traffic violations. 

In some instances, bankruptcy can protect against penalty for tax debt by buying the debtor some time with a repayment plan especially in the schedule repayment plans of Chapter 13 personal bankruptcy.  Also keep in mind that filing for bankruptcy amid lawsuits won’t guarantee your protection on its own.  Your bankruptcy needs strong representation to be approved by a Bankruptcy Judge: contact one of Legal Helpers’ attorneys by calling us toll-free at 1-800-260-1402.   We provide sharp legal advice during your financial uncertainty.  Call us today for a free initial consultation!