Bankruptcies up 30% in March 2008
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According to an article from Credit and Collections World and SourceMedia, the statistics are in for bankrupcty filings in Federal Courts for a 12 month period ending March 31, 2008. Bankruptcies exceeded 900,000, according to statistics released Tuesday by the Administrative Office of the U.S. Courts.
The 901,927 bankruptcy cases filed represent a 30% increase over the 695,575 cases filed during the 12 months ended March 31, 2007.
Also according to Credit and Collections/SourceMedia, “after an initial drop in bankruptcy filings following the October 17, 2005, implementation date of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), filings have risen gradually. Calendar year 2007 filings saw a 38% increase”.
The majority of bankruptcy filings are filings involving predominantly consumer debts, which totaled 871,186 over the 12 months ended March 31, up 29% from 673,615 filings in the period ended March 31, 2007.
Business bankruptcies rose 40% to 30,741, from 21,960 filings in the 12 months ended March 31, 2007.
For the 12-month period ending March 31, 2008, filings rose for all bankruptcy chapters, except for Chapter 12.
Chapter 7 filings rose 36% to 560,015, compared to the 413,294 Chapter 7 filings in the 12-month period ending March 31, 2007.
Chapter 13 filings rose 21% to 334,551 from 276,649 a year ago.
Chapter 11 filings rose 34% to 6,971 from 5,199 a year ago.
Chapter 12 filings fell 8% to 343 from 372 filings for the 12 months ended March 2007, the court system administration reported.
The 12-month total exceeding 900,000 filings is consistent with the expectation by the American Bankruptcy Institute that 2008 will see filings exceed 1 million.
“With the Credit Crunch going on, it is no wonder that the Bankruptcy filings are increasing. Who knows how long this Credit Crunch will continue. Foreclosures are at an all time high right now”, according to Valeri A. James, President, Simple Solutions Credit Consulting.
