There was more evidence this week that economic recovery has yet to find much traction -- at least for consumers. The number of U.S. bankruptcy filings has risen to levels not seen since 2005, when new changes to the bankruptcy law took effect, according to the Administrative Office of the U.S. Courts.
Bankruptcy filings rose 20 percent in the 12-month period ending June 30, 2010. A total of 1,572,597 bankruptcy cases were filed in federal courts in that period, compared with 1,306,315 in the 12-month period ending June 30, 2009.
This is the highest number of bankruptcy filings for any period since many of the provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 took effect, the report said. The 2005 law made bankruptcy a much less favorable option for consumers, resulting in a drop in foreclosure filings.
Business and Non-Business Filings
Non-business, or consumer filings for the 12-month period ending June 30, 2010 totaled 1,512,989, up 21 percent from the 1,251,294 non-business filings for June 30, 2009. Business filings totaled 59,608, up eight percent from the 55,021filings reported in June 30, 2009.
The consumer bankruptcy filings, coupled with stubbornly high foreclosure numbers, paint a picture of a consumer still struggling to get footing in a de-levereging economy.
Filings by Chapter, 12-month Period Ending June 30
In the 12-month period ending June 30, 2010 increased filings were
seen in all bankruptcy chapters.
• Chapter 7 filings totaled 1,133,320 up 25 percent from the 907,603 Chapter 7 filings in the 12-month period ending June 30, 2009.
• Chapter 13 filings totaled 424,242, up 10 percent from the 384,187 filings in the same time period in June 2009.
• Chapter 11 filings totaled 14,272, up 2 percent from the 13,951 filings during the 12-month period ending June 30, 2009.
• Chapter 12 filings rose 56 percent to 660 from the 422 Chapter 12 bankruptcies filed as of June 30, 2009.
Bankruptcy filings in the April through June period of this year totaled 422,061. Filings for the June quarter are the highest of any quarter in fiscal year 2010 (October 1, 2009-September 30, 2010) and the highest for any April-June quarter since the 2005 third quarter filings.
For fiscal year 2010, filings for the first quarter (October 1, 2009-December 31, 2009) totaled 372,203 and second quarter filings (January 1, 2010 March 31, 2010) totaled 388,148.
