First Half of 2010 Reaches Bankruptcy Filings Highest Point Since 2005

The Sacramento bankruptcy attorneys at the Law Offices of Matthew D. Roy routinely keep track of bankruptcy filing statistics across the United States. The Real Time Economics Blog reported on July 2 that bankruptcy filings in 2010 have surpassed the record number bankruptcy cases filed in 2005. 2005 saw a record number of bankruptcy filings due to the bankruptcy reform laws passed by Congress. Nonetheless, economists and bankruptcy experts alike have steadily projected that filing rates will meet or even surpass the record numbers seen in 2005, when many debtors scrambled to beat the deadline before more stringent guidelines came into effect, and it appears that they are correct.

As we are well aware, however, the United States in currently embattled in the worst economic downturn since the Great Depression. Statistics show there were 770,117 bankruptcy filings in the country for the first 6 months of this year. That is a fourteen percent increase over the numbers provided in the first part of 2009. The American Bankruptcy Institute predicts a total of 1.6 Million filings for the entire year.

While June seems to have experienced a lull in bankruptcy filings from May, which was the third consecutive month that saw a decrease in filings, these filings still remained 8 percent higher than June of last year. Columbia Professor of Law Ronald Mann conducted a study that shows that the highest bankruptcy filing rates in the country were in the southwest and southeast. Nevada alone saw 15,000 filings per million households, more than twice the national average. The National average of bankruptcy filings is 6,800 filings per million households. Washington, D.C., South Carolina, and Alaska experienced the lowest filing rates across the nation. States in the southeast typically see the highest amount of filings across the Nation, however, Tennessee and Alabama appear to have experienced reductions in these rates.

Surprisingly, California was not mentioned in the study, however, as a Sacramento Bankruptcy Attorney, I suspect the exact statistics for Chapter 7 and Chapter 13 remain fairly high since California has some of the largest unemployment numbers in the country, and many regions — including the Sacramento metropolitan and surrounding areas – have also been severely impacted by the real estate foreclosure crisis. High unemployment rates and increased foreclosures tend to fuel bankruptcy filings. The San Francisco Chronicle reported a study published by the American Bankruptcy Institute that the states with the highest bankruptcy filing rates also have a high correlation with those states hit hardest by the housing crisis.

As a Sacramento Bankruptcy Attorney I help people from many different circumstances and income levels prepare and file Chapter 7 or Chapter 13. Many of my clients seek to file due to unemployment, foreclosure, or excessive credit card debt and/or medical bills. Filing for bankruptcy can be a wise decision under the right set of circumstances. This is why if you or someone you know has considered filing for bankruptcy you should contact someone familiar with these topics immediately.