The American State of Bankruptcy, 2009

[Crewleader]

By: John Greenya | December 07, 2009 |

Not surprisingly, bankruptcy filings are on the rise and likely to increase. Is the 2005 bankruptcy reform act helping, hindering or neutral in this instance?

"People are hurting, and it is showing up in the bankruptcy courts."

This statement, profoundly simple then and depressingly obvious now, is from the March 2008 blog of University of Illinois law professor Robert Lawless. Two months later, Lawless, a national expert on bankruptcy trends, explained to Newsweek, "People borrow to stave off the day of reckoning, and then when credit tightens, the bankruptcy numbers go up." By the end of the year, Lawless got specific: "For 2009, I am expecting a little under 1,400,000 bankruptcy filings."

In early October 2009, Lawless's skill as a prognosticator was substantiated. Using data from the National Bankruptcy Research Center, the American Bankruptcy Institute, the research arm of the bankruptcy industry, reported "Consumer bankruptcies totaled 1,046,449 filings through the first nine months of 2009, the first time since the 2005 bankruptcy overhaul that filings have surged past the 1 million mark during the first three calendar quarters of a year. ... The filings for the first three-quarters of 2009 were the highest total since the 1,350,360 consumer filings through the first nine months of 2005."

http://www.miller-mccune.com/business_economics/the-american-state-of-bankruptcy-2009-1620?ref=patrick.net