Phoenix, Ariz. — The fourth quarter of 2007 continued the steady up trend in the bankruptcy markets. Chapter 7 filings amplified and represented 72 percent of all personal cases being handled by the United States Bankruptcy courts. Personal bankruptcies increased 41 percent over the fourth quarter of 2006 with 326,749 households either filing or discharging.

“There’s obviously an impact from the down turn in the housing market, subprime-loan problems and the increase in foreclosures,” said Chris Bayley, a partner focusing on bankruptcies at the Phoenix law firm Snell & Wilmer. The 2007 increase “presages even higher filings this year, as the heavy consumer-debt load is made worse by the home-mortgage crisis,” predicted Samuel Gerdano, executive director of the American Bankruptcy Institute.

As of Jan. 16, there are a total of 875,899 open bankruptcies that are being processed for discharged by the United States Bankruptcy courts. What does all of this mean to the automotive special finance professional? “Its simple,” said Robert Davies, president of “Thirty-seven percent of bankrupt individuals purchase an automobile within 30 days of discharge and a grand total of 70 percent purchase within a year of that discharge. This suggests a substantial increase in sales for dealerships marketing to the discharged BK market in 2008.”