Struggling economy keeps bankruptcy courts busy

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Struggling economy keeps bankruptcy courts busy

By Michael Doyle | McClatchy Newspapers


WASHINGTON — Bankruptcy courts are busier than they've been in years, as distressed families and businesses increasingly seek respite from the financial storm.

Nationwide, bankruptcy filings rose 20 percent in the 12-month period ending June 30, according to records released Tuesday. The 1.57 million cases filed in federal courts were more than at any time since Congress tightened bankruptcy rules in 2005.

"We've seen an increase in bankruptcy filings across the board," Fresno attorney Benny D. Barco said Tuesday. "A lot of it has to do with loss of employment."

The three months between April 1 and June 30 proved particularly hectic, as 422,061 bankruptcy filings were entered nationwide. This exceeded the number in nearly every quarter going back to 1995, records compiled by the Administrative Office of the U.S. Courts show.

For federal bankruptcy courts in Sacramento, Modesto, Fresno and Bakersfield, the grim business just keeps on coming.

On Monday, Aug. 16, a seemingly typical day, a total of 129 new bankruptcy filings were recorded in the three Central Valley courts. Together, they reflected a cross-section of how bankruptcy proceedings work amid the Great Recession.

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http://www.mcclatchydc.com/2010/08/17/99315/struggling-economy-keeps-bankruptcy.html