It’s no secret that the down economy has taken its toll on many people’s lives. Small business owners, laid-off employees and even corporations are feeling the pressure of the financial losses. According to the American Bankruptcy Institute (ABI) So far the national consumer bankruptcies have fallen 6% the first fiscal quarter of the year, which over 20,000 less bankruptcies.
March of this year had 144,657 bankruptcy filings, which was up 41% from January’s total, but still down from last March, which had 149,268 bankruptcy filings. Hopefully the trend will continue through the rest of the year, since 2010 had the highest number of filings since 2005. The number of filings in 2005 was the highest number of bankruptcies in any year in the past 30 years of U.S. history (and most likely the worst year in all of United States history) documented by ABI.
There were 2,039,214 consumer bankruptcies in 2005, which was thanks in part to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The Act created stricter bankruptcy guidelines, which credit card companies profited immensely from. The filings shot up in 2005 because the Act didn’t go into effect until October, and many consumers rushed to file before then.
While the 2011 bankruptcy filings may seem like an indication that the economy is turning around, the real reason behind the decrease in bankruptcies is more because of restrictions being tightened and people adapting their lifestyles to the sluggish economy. According to the Federal Reserve even consumer credit outstanding has fallen in the last two years.
American Bankruptcy Institute Executive Director, Samuel Gerdano even said that “Though bankruptcy filings are still elevated, consumers continue to take steps to reduce debt levels and shore up their finances,” and “as a result, we now expect that consumer bankruptcy filings will dip below the 1.5 million filings recorded last year.”
July 2011 showed a continued decrease in bankruptcies from 2010. July’s bankruptcies decreased 18% from 2010, according to the ABI and the National Bankruptcy Research Center. This makes July our seventh straight month of decreased bankruptcies for the U.S. Additionally; July filings represented a 5% decrease from June 2011 bankruptcies.
With any luck, we can continue the trend of decreasing, especially as the economy turns around. There is no shame in filing for bankruptcy; it can save your family and turn your life around. If you’ve been considering filing for bankruptcy, please contact an experienced Waco or Killeen bankruptcy lawyer to help you along the way.
About the Author: Jeff Davis is the Owner of the Davis law firm and a highly experienced Waco and Killeen bankruptcy attorney. To find out more information about a Waco or Killeen bankruptcy lawyer, please visit www.jeffdavislawfirm.com.