October Personal Bankruptcies Highest Since 2005 Law Changes
Bill Rochelle and Michael Bathon
More Americans filed bankruptcy in October than in any month since changes to U.S. bankruptcy laws in 2005 as unemployment and falling home prices prevented consumers from paying their debts.
Bankruptcy filings on track to hit 1.4 million in 2009
Susan Ladika
Call it déjà vu. Despite reforms intended to make it harder to file for bankruptcy, consumer filings continue to march steadily higher toward the rate they were before legislation was overhauled in 2005.
The goals of the controversial 2005 Bankruptcy Reform were to both lower the number of those filing bankruptcy and also to increase the amount recovered post bankruptcy by forcing consumers into Chapter 13 bankruptcies. Seeing the latest data, it is clear that both of these goals have been failures - however the unique way in which they have failed is worth investigating.
Nevada has replaced Tennessee as the state with the most bankruptcies, as filings continue to stack up nationally.
From January to August, national bankruptcy filings reached 954,911, up from 703,732 in the same period of 2008, according to Automated Access to Court Electronic Records. In August, filings were up 22% compared with August 2008.
In the 1990s and early 2000s more Americans than ever filed for personal bankruptcy. On April 20, 2005, President George W. Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act into law. The bill was meant to put more money into the hands of creditors, and crack down on filers.
More Americans filed bankruptcy in October than in any month since changes to U.S. bankruptcy laws in 2005 as unemployment and falling home prices prevented consumers from paying their debts.
Call it déjà vu. Despite reforms intended to make it harder to file for bankruptcy, consumer filings continue to march steadily higher toward the rate they were before legislation was overhauled in 2005.
The goals of the controversial 2005 Bankruptcy Reform were to both lower the number of those filing bankruptcy and also to increase the amount recovered post bankruptcy by forcing consumers into Chapter 13 bankruptcies. Seeing the latest data, it is clear that both of these goals have been failures - however the unique way in which they have failed is worth investigating.
Nevada has replaced Tennessee as the state with the most bankruptcies, as filings continue to stack up nationally.
In the 1990s and early 2000s more Americans than ever filed for personal bankruptcy. On April 20, 2005, President George W. Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act into law. The bill was meant to put more money into the hands of creditors, and crack down on filers.