According to the National Bankruptcy Research Center, bankruptcy filings throughout America have risen continually since 2007. It was in 2007 that the United States tumbled into a deep recession. With unemployment figures flirting near 10% bankruptcy filing also rose in October.
Currently 1 in every 175 American is filing for bankruptcy. According to the National Bankruptcy research centre October typically sees the highest filings of the year; the good news is that filings in October of this year were three percent lower than filings in October 2009.
The data continues to show a domination of Chapter 7 filings filings; only 30% of the October filings sought relief under Chapter 13. In 2005 there was a big push in bankruptcy legislation to encourage consumers to choose Chapter 13 rather than Chapter 7.
The States with the highest share of Chapter 13 filings remain concentrated in the Gulf Coast. Thus, 62% of filings this year in Louisiana have been under Chapter 13, with similarly high shares in Alabama (56%) and Texas (50%). Many economists believe this to be reflective of the deep-water Horizon oil spill earlier this year.
For thousands of consumer across America formal bankruptcy was not an option. Phillip Sindlinger is a Nevada resident who forced the problems associated with formal Chapter 7 bankruptcy. Phillip admits, “I had really good credit before I went bankrupt. I learned very quickly that the system punishes bankruptcy. It was a hard lesson I learned. Because I am a school teacher I tended to view everything as a lesson.”
Phillip through the recent economic crisis found himself once again facing financial ruin. This time Phillip engaged with the Howard| Nassiri Law Firm who provide a debt resolution program that aims to prevent bankruptcy. This attorney-based program using the latest innovative technology that automates the complex documentation provided by Anaheim, California based Morgan Drexen.
Phillip and his family are now enjoying life debt free. The slow economy, high unemployment rates and a slow housing market has clearly led to the rise in bankruptcy filings.
For Marcia Ameperosa a Washington resident was struggling with almost $15,000 in debt. She admits, “I thought about bankruptcy, I knew that it would hurt my credit more than resolving my debt. I had a family member file for bankruptcy so I did not want to go through the same ordeal.”
Filed under: Business