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Bankruptcy filings back on the upswing
10/08/2010
Five years after the passage of a major bankruptcy reform bill, a difficult financial environment has forced a growing number of people to consider debt management solutions they may have never needed several years ago.
In fact, the financial climate has become so difficult for many Americans that bankruptcy remains on an upswing in part because of factors like high unemployment, credit card debt and weak real estate values.
According to the American Bankruptcy Institute, more than 1.16 million Americans filed for bankruptcy protection during the first nine months of 2010. This figure marked an 11 percent increase over the total recorded for the same period in 2009.
"While the 2005 bankruptcy overhaul law aimed to reduce filings, overall consumer debt and continued financial stress have led to consumer bankruptcies climbing back to pre-BAPCPA levels," said ABI Executive Director Samuel Gerdano, referring to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
Gerdano went on to predict that there will be 1.6 million bankruptcy filings for all of 2010.
In another sign that consumers are still facing money management problems, bankruptcy filings were also up 3.3 percent between August and September.
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