Tuesday, November 17, 2009

Personal bankruptcies surge 9%



By Zachary Pienkowski

NEW YORK (CNNMoney.com) -- The number of Americans filing personal bankruptcies surged 9% in October and were on target for the highest annual total in four years, according to a report issued Wednesday.

The American Bankruptcy Institute, an industry research firm that relies on data from the National Bankruptcy Research Center, said 135,914 consumers filed for bankruptcy last month. Almost a third of the bankruptcies were filed under Chapter 13, in which consumers are put on a repayment plan of up to five years.

"The nearly 9% increase in consumer bankruptcy filings in October, together with a 7% jump reported in business cases, demonstrates the sustained stress on the U.S. economy," said ABI executive director Samuel Gerdano.

The group forecasts total bankruptcies to exceed 1.4 million in 2009, which would be the highest since 2005. It would also be an increase of at least 30% from last year.

"People are still carrying a lot of debt in terms of credit cards and home equity loans, and unemployment is still rising," said Maureen Thompson, legislative director for the National Association of Consumer Bankruptcy Attorneys in Washington. "All of those factors are hitting consumers at the exact same time."

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2 comments:

  1. Since so many people are declaring bankruptcy, we should take action and take precautions in our spending habits, try to save more and not avoid using credit cards.

    -Scarlett Lu

    ReplyDelete
  2. I agree, people should change some of their spending habits and should develop some saving habits because sooner is the better, is it not?
    By- Anshu Dixit

    ReplyDelete