Your Black Money: Bankruptcy Filings Up 30%

28 Aug

 

Nearly 1 million individuals and businesses filed bankruptcy in the 12 months ended June 30, up 28.9% from the prior 12 months, according to U.S. Court data released Wednesday.

Of the 967,831 bankruptcy cases filed since July 1, 2007, non-business filings made up 96.5% of those cases, totaling 934,009. Of them, 592,376 were Chapter 7 filings, which involve liquidation of non-protected assets, like family homes.

Filings were also filings under Chapter 13 protection, which allows individuals to reorganize their finances and pay down their debt, and Chapter 11, which is normally used for businesses but can apply to individuals who are reorganizing but have more debt than allowed under Chapter 13.

On the business side, a total of 33,822 cases were filed in the 12-month period, including 23,372 under Chapter 7, which allows for an orderly shut down of the business. There were also filings under Chapter 11, Chapter 12 for family farm bankruptcy, and Chapter 13 filings for small-debt reorganization.

By region, the highest number of combined filings was in the U.S. Bankruptcy Court’s 6th District, which encompasses Kentucky, Michigan, Ohio and Tennessee. The total came to 167,561, up 21.2% in the past year.

Tennessee had the highest filing rate per capita, at 6.92 filings per 1,000 people. Michigan had the highest per-capita rate of Chapter 7 filings, at 3.82 per 1,000 people.

The largest percentage increase, 60.9%, was in the court’s 9th District, which includes California, Arizona and Nevada, all states hit hard by the housing meltdown.

 

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