Bankruptcies Jump 40 Percent in 2007

[$$only4ever]

Bankruptcies jump 40 percent in 2007
The American Bankruptcy Institute blames the mortgage crisis for heavy debt load, warns that this year could see more bankruptcies.


NEW YORK (CNNMoney.com) -- The number of Americans filing for consumer bankruptcy increased by nearly 40 percent in 2007, according to the American Bankruptcy Institute.

In a report released Thursday, the ABI said that the number of overall consumer bankruptcy filings reached 801,840 last year, compared to 573,203 in 2006.

"The roughly 40 percent spike in consumer bankruptcies during 2007 presages [an] even higher [number of] filings this year, as the heavy consumer debt load is made worse by the home mortgage crisis," predicted ABI Executive Director Samuel J. Gerdano.

However, the report also showed that the number of bankruptcy filings declined 7.5 percent in December from November. And Chapter 13 filings - those available to individuals with regular income whose debts do not exceed specific amounts - also showed a decline from November to December.

[chpxiii]

So that means that there are more chapter 7 bankruptcies being filed, right? Something that I am sure the creditors did not intend with the change in the bankruptcy laws.

[magyar123]

So that means that there are more chapter 7 bankruptcies being filed, right? Something that I am sure the creditors did not intend with the change in the bankruptcy laws.

Both - 7s and 13s - increaaed.

[erinmi]

Not at all surprising since the whole reason we ended up choosing to file for bankruptcy was due to subprime predatory lending- a refi with an inflated appraisal by about $30,000 in 2006, followed by having to short sell our home in 2007 with a net loss of $38,000 after realtor fees, taxes, etc.

It would have been hard but we could have muddled through the rest of our debt in about 3-4 years but once we added in the loss on the house, we were looking at 8-10 years. We said screw it and made the business decision to file CH 7 while we qualified for it.

I'm not saying we didn't make mistakes but I am definitely NOT surprised at the increase and the expected continuing increase in filings.

[erinb1975]

Same here, Erin. Also victims of appraisal fraud (around 20K), and an ARM. We are doing a 13 with a lien strip.

[chpxiii]

Both - 7s and 13s - increaaed.

Well, yeah, I get that.

But what I observed from reading the article was that there were even more chapter 7s filed as opposed to chapter 13s file, even though there was an increase in both. Something that creditors did not intend to happen with the new bankruptcy laws trying to force people into chapter 13s.

[ameliabedilia]

I say the more filers the merrier . That way the insurance, credit card, apartment communities will have to start dealing with post bk's more nicely. Their "highly qualified candidate" base will keep shrinking.

[Runnin on empty]

I say the more filers the merrier . That way the insurance, credit card, apartment communities will have to start dealing with post bk's more nicely. Their "highly qualified candidate" base will keep shrinking.

The sad truth is I do see that happening. Along with job loss to other countries and unforeseen medical emergencies, we live in a culture where the amassing of "stuff" (not the word I want to use) has become all-important.

Most American families are living hand-to-mouth. And while I'm not conspiracy theorist, or a bleeding heart, it doesn't take much to notice that indeed the rich are getting richer, the poor staying poor (or getting poorer) and the middle class shrinks on almost a daily basis.

This country is in a bad way, and unfortunately, I see it getting much worse before it gets better.

[xuanlu425]

xuanlu

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