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Chicago Bankruptcies Still On Rise – With No End In Sight

Despite some signs that the recession is coming to the end, personal Chicago bankruptcies are still on the rise - with a 38% increase in individual bankruptcy filings from this September in comparison to last September.

Bankruptcy experts and economists say the trend will continue as jobless rates rise and as many still struggle with mortgage payments. Bankruptcy filings in 2009 have more than doubled since 2006.

In Chicago, Illinois, alone, 4,302 new bankruptcy petitions were filed, compared with just over 1,500 filed in 2006 and 3,121 last year. While the number of Chapter 7 liquidation bankruptcies increased dramatically, the number of Chapter 13 reorganization bankruptcies decreased somewhat. Many believe that this is because most lost jobs mean fewer wage-earner bankruptcies.

The numbers also looked bad for corporations and Chapter 11 bankruptcy, with numbers steadily increasing. In fact, this September's Chapter 11 filings doubled in comparison to last year's, with 34 businesses seeking bankruptcy protection. This, too, may be a red flag that the economy is still weak in the wake of last year's financial crisis.

The last time that bankruptcy filings were this high was in 2005, just before the bankruptcy laws changed, making it harder to declare bankruptcy. While many feel that the reason that bankruptcy rates continue to climb is extremely complex and even impossible to fully understand, the majority of experts agree that the rising bankruptcy rates will not taper off any time in the near future.

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