Bankruptcy Filings on the Rise

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March 17th, 2008

"Bankruptcy Filings up 18%"

The number of Americans filing for bankruptcy is growing, even as changes in the law have made it more difficult and more expensive for people to file.

According to Automated Access to Court Electronic Records, the number of bankruptcy filings as of February is up 28 percent from last year and 18 percent from January. An average of nearly 4,000 petitions were filed per day last month.

Contributing Factors

Experts attribute the rise to a number of factors including plummeting housing values, mounting personal debt, increasing unemployment, and soaring gas prices, among other things.

“The credit industry did its best to drive up the cost of filing but when families are in enough trouble they will fight their way through the paper thicket and the higher attorneys’ fees to get help,” said Elizabeth Warren, Harvard Law professor.

Greatest Increases

States with the greatest increase in bankruptcy filings so far this year include California (33 percent), Maryland (29 percent) and Florida (26 percent).

Jack Williams of the American Bankruptcy Institute and Georgia State University predicts that the number of bankruptcies in the U.S. to reach 1.2 to 1.4 million. Law professor Robert M. Lawless also expects the number of filings to exceed a million.

In 2007, there were 826,732 bankruptcy filings.

(Source: The New York Times)

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