Statistics about Bankruptcy Filings

Update Bankruptcy Statistics with Graphs:

Ahead of stiffer bankruptcy laws set that went into effect in mid-October 2005, making filing for bankruptcy more difficult, bankruptcy filings soared. In fact, during the final week of September 2005, approximately 68,000 individuals filed for bankruptcy nationwide.

A week later, that number rose to a staggering 100,000 bankruptcy filings nationwide. The number of bankruptcy filings in the month prior to the change in the bankruptcy law (October 17, 2005) was nearly triple the average number of filings.

In fact, last year proved to be a record-breaking year in bankruptcy history as more bankruptcies were filed in fiscal 2005 than ever before. Experts say one in 53 households filed for bankruptcy in 2005. During the period from October 1, 2004 through September 30 2005, bankruptcy filings rose 10 percent. Between June 30 and September 30, approximately 542,002 bankruptcies were filed, the highest filing quarter in bankruptcy history.

The majority of bankruptcies filed in 2005 were that of individuals. Only 34,222 businesses filed for bankruptcy in fiscal 2005 compared to a whopping 1,748,421 individual filings. The total number of bankruptcies in fiscal 2005 reached 1,782,643, up from 1,618,987 in 2004. During the 2005 calendar year, more than 2,000,000 bankruptcy petitions were filed.

California saw the largest increase in filings in 2005. Up almost 36 percent from 2004, 164,856 bankruptcy filings were made in 2005. Ohio was the second most active in filings in 2005, up 51.7 percent with a total of 135,142 filings.

Filings across the board increased during the fiscal year of 2005:

Chapter 7 (most or all of debt discharged; open to individuals and sole proprietorships) filings rose by 17 percent: 1,346,201 in 2005 compared to 1,153,865 in 2004. Chapter 11 (open to corporations, LLCs and sole proprietorships) filings dipped a dramatic 36 percent. During fiscal 2005, some 6,637 businesses filed for Chapter 11, down from 10,368 in 2004.

Chapter 12 filings (open to those who run family farms) saw a staggering increase of 53 percent with 364 filings in fiscal 2005 compared to 238 in 2004. Chapter 13 (most or all of debts repaid; open to individuals and sole proprietorships) filings, like chapter 11 filings, fell in fiscal 2005. Down six percent, Chapter 13 filings totaled 429,316 compared to 454,412 in 2004.

To find the total number of filings in your state, you can visit the United States Bankruptcy Courts' website or contact your local bankruptcy court.

Some experts expect bankruptcy filings will again jump - though perhaps not to record breaking levels - in 2006 due to the rising cost of heating and other utility bills. While the new law makes it more difficult to file for Chapter 7 bankruptcy, it is still a viable option and one that many Americans are likely to take in 2006.

Previous Statistic Information

A generation or two ago, it seemed as if most middle class families lived on a single income without struggling. But these days, the families labeled middle class (classified as having an annual income of 25,000 - 99,000 per year), made up over 92% of those filing for personal bankruptcy in 2003.

And at the end of the 12-month period ending June 30, 2002, American bankruptcy found itself at an all time high - filings had increased 9.6% from the year before - with over 1.6 million personal bankruptcy petitions that had been filed during the year.

Yes, bankruptcy is at an all time high in our country according to researchers at Harvard University. In a society that is consumed with material things and that doesn't need to have cash on hand to get them, middle class families can become stretched to their financial limits. One unexpected financial occurrence could be enough to send them spiraling into a hole that they can't climb out of.

According to a recent article in USA Today, "Nearly 90% of all families with children who filed for bankruptcy list three reasons as the cause: job loss, divorce or medical problems, according to the Consumer Bankruptcy Project at Harvard University, the largest study of consumer bankruptcy in America. About one-third of the families owed an entire year's salary on their credit cards".

Many experts put the blame on the plastic cash our generation has become so accustomed to using. On average, a person will spend 112% more using a credit card than they will is they actually have to count out cash to pay with. This includes check card purchases.

Without needing cash on hand to make purchases, it is no wonder that 40% of American families are spending more than they make each year. The average American has over 5,000 dollars in credit card debt that they carry over each month with them. It is easy to see how a temporary job loss, a bad medical expense or a divorce could through a family into a financial downturn.

If you are experiencing financial problems, take control as soon as possible. Negotiate with credit card companies for lower interest rates. See a consumer credit counseling specialist - but be sure to avoid the for profit agencies. Non-profits will be the most likely to have your best interests at heart.

Related Articles:

+   Information for those thinking about filing bankruptcy online
+   What consumers need to know about debt consolidation
+   Information about filing for chapter thirteen bankruptcy
+   There may be alternatives to filing for bankruptcy