December Caps Record Year for US Bankruptcy Filings
The American Bankruptcy Institute's latest report indicates that personal bankruptcy filings increased by more than 32 percent last year. The ABI's figures, which counted 1.06 million filings in 2008 against 801,840 in 2007, were confirmed by the Administrative Office of the United States Courts.
ALEXANDRIA, Va. — The American Bankruptcy Institute's latest report indicates that personal bankruptcy filings increased by more than 32 percent last year. The ABI's figures, which counted 1.06 million filings in 2008 against 801,840 in 2007, were confirmed by the Administrative Office of the United States Courts.
“Consumers are under great financial stress, with no immediate end in sight,” said ABI executive director Samuel Gerdano. “We expect the upward spike in personal bankruptcies to continue in 2009.”
Subprime dealers, lenders and third-party lead-generation providers may stand to benefit from an expanding tier of credit-challenged customers. Consumers with a recently discharged bankruptcy are often new to secondary financing and, depending on the type of bankruptcy, cannot file again for several years.
“We have been monitoring the steady growth of personal BK cases,” said Robert Davies, president of OnlineBKmanager.com. “The good news is our dealer clients are working with lenders like Tidewater, CapOne, AmeriCredit, Wachovia and many others to offer quality subprime loans to these individuals.”
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was enacted in order to steer more U.S. debtors toward filing for Chapter 13 bankruptcies, which calls for a five-year repayment plan. Under a Chapter 7 filing, most debts are simply discharged.
“Currently, Chapter 7 bankruptcies represent over 75 percent of all cases being filed with the courts,” said Davies. “This fact contradicts previous thoughts that the 2005 law change would force more people into filing a Chapter 13 over a Chapter 7.
“In 2009," Davies concluded, "bankruptcy marketing will continue to prove its value to automotive retailers throughout the United States."
Open bankruptcies waiting to be discharged, by state, as of Jan. 6, 2009:
Alaska 683
Alabama 39,430
Arkansas 16,981
Arizona 12,310
California 77,530
Colorado 11,902
Connecticut 3,887
Dist. of Columbia 669
Delaware 2,446
Florida 45,958
Georgia 75,055
Hawaii 1,411
Iowa 4,035
Idaho 3,262
Illinois 46,328
Indiana 32,084
Kansas 9,555
Kentucky 17,283
Louisiana 22,139
Massachusetts 9,883
Maryland 14,077
Maine 1,785
Michigan 43,560
Minnesota 10,470
Missouri 22,665
Mississippi 14,253
Montana 1,231
North Carolina 31,867
North Dakota 833
Nebraska 6,237
New Hampshire 2,724
New Jersey 20,986
New Mexico 2,645
Nevada 13,529
New York 33,172
Ohio 50,743
Oklahoma 15,860
Oregon 10,064
Pennsylvania 31,976
Rhode Island 1,882
South Carolina 14,705
South Dakota 1,070
Tennessee 48,881
Texas 55,763
Utah 7,943
Virginia 26,856
Vermont 1,125
Washington 16,326
Wisconsin 15,481
West Virginia 3,256
Wyoming 705
Total: 955,501
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