Personal Bankruptcies Dropped During 2011
According to a report by Professor Ronald Mann of Columbia Law School for the National Bankruptcy Research Center, the number of Americans who filed for bankruptcy fell from 1.5 million in 2010 to 1.35 million in 2011, a 12% decrease. Chapter 7 filings dropped by 17% and Chapter 13 filings dropped by 25%. This decline marks the first drop in bankruptcy filings since 2006. However, Mann cautions that since rates did increase during the last two months of 2011, they may start to rise again during 2012. Only time will tell.
The state with the highest bankruptcy rate was Nevada. After Nevada, the states with the highest bankruptcy rates are Georgia, Utah, Tennessee, and California. On the lowest end of the spectrum, we have Washington D.C., Alaska, South Carolina, Vermont, North Dakota, and Texas.
About one in every 175 people filed for bankruptcy in 2011, which averages out to about 5800 filings per million adults. However, in Nevada, they have almost twice the national average with about 11,400 filings per million adults. The lower-end states have less than half of the national average.
Individuals usually file for either Chapter 7 or Chapter 13 to seek relief from debts. With Chapter 7, a debtor’s assets are liquidated and used to pay off existing debts. Once bankruptcy is filed, all creditor actions must halt. Remaining debts are discharged at the end of a bankruptcy claim at the court’s directive. With Chapter 13 bankruptcy, debt is reorganized and debtors are given a payment plan and protected from creditor actions. After the plan is paid off, remaining debts are discharged.
Harold Shepley & Associates is a full service debt relief law firm and can answer any questions you may have about bankruptcy. Contact us today for a free consultation.
May 14, 2012 Posted in Bankruptcy, Chapter 13, Chapter 7, Debt Tagged bankruptcy filings, chapter 13, chapter 7, debt, personal bankruptcy Leave a comment
