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Chapter 7 Filings Up 41 Percent from 1Q 2008

March 24, 2009

WASHINGTON — New reports from the American Bankruptcy Institute and the Administrative Office of the United States Courts show that Chapter 7 bankruptcy filings were up 41 percent from the first quarter of 2008, with no curtailment in sight.

“We expect this upward spike in personal bankruptcies to continue throughout 2009," said Samuel Gerdano, ABI's executive director.

As of March 13 of this year, the courts had already discharged 167,183 personal bankruptcies and processed filings for an additional 202,824 households. Those numbers include less-common Chapter 13 bankruptcies, which saw a 20 percent increase from the first quarter of 2008.

Robert Davies, president of Phoenix-based OnlineBKManager.com, said the upward trend is not necessarily bad news for lenders who specialize in financing customers with recently discharged bankruptcies.

"We continue to monitor the steady growth of personal BK cases," Davies said. "Our Money Back Guaranteed BK marketing campaigns are currently producing progressive results. Dealers are working with lenders like Tidewater, CapOne, 722 Redemption, Prestige Financial, Wachovia and many others to offer quality loans."

Davies noted that, as of March 13, there are nearly one million open bankruptcies being processed for discharge by U.S. bankruptcy courts.

"In 2009," he said, "bankruptcy marketing will continue to prove its value to automotive retailers throughout the United States."

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