Cunsumer Bankruptcy Filings OnThe Rise - You Are Not Alone

According to ConsumerAffairs.com:

James Limbach
ConsumerAffairs.com

November 3, 2010


U.S. consumer bankruptcy filings edged upward during October, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center (NBKRC).

The total of 132,173 filings nationwide was a 1.4 percent increase over the 130,329 total consumer filings recorded in September. At the same time, they represented a 2.75 percent decrease from the October 2009 total of 135,913.

Chapter 13 filings, which are available for an individual with regular income whose debts do not exceed specific amounts, constituted 29.7 percent of all consumer cases in October -- a slight decrease from September. This type of filing is typically used to budget some of the debtor's future earnings under a plan through which unsecured creditors are paid in whole or in part.

"As the issues of unemployment and economic stress weigh heavily on today's elections, consumers continue to seek the financial shelter of bankruptcy", said ABI Executive Director Samuel J. Gerdano. "We anticipate that there will be nearly 1.6 million consumer bankruptcy filings by year end."

Other types of filings include:

• Chapter 7, which is available to both individual and business debtors. Its purpose is to achieve a fair distribution to creditors of the debtor's available non-exempt property. Unsecured debts not reaffirmed are discharged, providing a fresh financial start;
• Chapter 11, the purpose of which is to rehabilitate a business as a going concern or reorganize an individual's finances through a court-approved reorganization plan; and
• Chapter 12 of the Bankruptcy Code is designed to give special debt relief to a family farmer with regular income from farming.