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Nationally, Bankruptcy Filings Approach Five Year High

Posted: September 15, 2010

The Administrative Office of the U.S. Courts reports there were 422,061 bankruptcy filings across the United States between April and June. This is an increase of 9% over the previous three months and an 11% increase from the previous year. For the fiscal year ended June 30th, bankruptcies rose 20% from the previous year (1.57 million compared to 1.31 million). With our slow economy and unemployment nearing double digits, bankruptcy filings reaching a five year high is really no surprise.

The primary reasons people end up filing are the result of one or more of the following:

• Job loss
• Underemployment – jobs that do exist are lower paying. Even though those who lose their job may find another one, it’s often at wages too low to make ends meet
• High medical bills
• Divorce
• Falling home prices

For many who were laid off at the start of the recession, some are just now filing for bankruptcy after being unable to find a job. Typically, before filing, our clients have used their savings and retirement funds while they looked for work. In many cases, they also ran up credit card debt to pay their bills. Bankruptcy is the last resort for many seeking relief from debt, unemployment and the economic downturn.

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