Personal Bankruptcy Filings Up 5 Years in a Row
The American Bankruptcy Institute says that the number of bankruptcies have increased for the fifth straight year in a row.
Bankruptcy filings this year reached 1.53 million. Surprisingly, there were far more bankruptcies between the years of 2001 2005 than from 2006 through 2010. Bankruptcies in the first half of the decade average about 1.5 million and just over 1 million in the second half.
Nevertheless, the trend is bad as 2010 had 9% more bankruptcies than 2009. Analysts believe 2011 will be better. Borrowing and debt are down in general, and while foreclosures continue, most analysts believe that foreclosure rates will drop. Of course unemployment was reported at 9.8% last month and unemployment is an important cause of personal bankruptcy.
Data show that states like California and Arizona in the Southwest represent a large percentage of the rise in bankruptcies. The states had 25 and 24% increases respectively. While numbers in the Southeast improved, it was still a leader in bankruptcy filings.
The Institute for Financial Literacy describes the average bankruptcy filer as earning less than $30,000 per year and not holding a college diploma. They say that profile is changing somewhat with more middle income families filing for bankruptcy than had in previous years.
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