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Why Were There so Many Chapter 7 Bankruptcy Filings in 2009?

Among the most popular news items for 2009 was the economic recession. Everyone has felt the effects of the tough times we faced in 2009—with many going through job loss, medical emergencies, and foreclosures. And, as a result, bankruptcy filings rose by nearly a third in 2009. Statistics show that not only did bankruptcy filings overall rise, but Chapter 7 filings in particular.

Why is this strange? The 2005 overhaul in federal bankruptcy law was designed to push more people towards Chapter 13, which is a reorganization of debt rather than elimination like in Missouri and Illinois Chapter 7. The Chapter 7 “means test” was put in place to divide people who were able to repay their debts from those who were not. Some are suggesting that the Chapter 7 means test is ineffective. Whatever the reason, 2009 saw a 42% increase in Chapter 7 filings with only a 12% increase in Chapter 13 filings.

As one bankruptcy filer so eloquently put it in an article on MSNBC, “Humans take risks, and they make mistakes.” Perhaps we are seeing a very human side to the financial world. I’m not sure why some are inclined to think that asking for help with your debt is irresponsible or shameful. Filing for bankruptcy, as any Missouri or Illinois bankruptcy lawyer would tell you, is one of the most responsible things that you can do. You can protect your family from foreclosure, get credit card debt help, and live a life that is free from the harassment of creditors. What about that sounds bad, exactly?

Are you wondering “Should I file bankruptcy?” or when the best time is to file for bankruptcy protection? Order a free copy of my ultimate Missouri and Illinois bankruptcy book, “Get Out of Debt: Secrets Your Creditors Don’t Want You to Know,” by clicking here. It could just be the information you never knew you never knew about getting a fresh start from your debt.

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