Castle Law Office Blog | Missouri & Illinois Bankruptcy Legal Blog

Consumer Bankruptcy Up 34 % In July

According to CNNMoney and the American Bankruptcy Institute, consumer bankruptcies across the country sharply increased in July, reaching its highest point since October of 2005 (when the bankruptcy laws were altered with the Bankruptcy Abuse Prevention and Consumer Protection Act). Analysts say the 34% surge in Chapter 7 and Chapter 13 bankruptcy filings reflect the struggling economy, the wounded housing market and the large number of layoffs. The unemployment rate across the country is at a 26-year high.

A staggering 126,434 people filed for bankruptcy in July, up more than 8 percent from June and up 34 percent over July of 2008. One out of three bankruptcy petitions were for Chapter 13 bankruptcy, which reorganizes a person's debts.

In addition to job loss and low real estate values, fiscal experts also say that those with jobs are not making any more than they did last year - many raises are being delayed or passed up altogether.