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More Consumers File For Bankruptcy In February 2010

Although the stock market is showing improvements and although many economists have said that the recession has come to an end, personal bankruptcy filing rates continue to soar across the country as well as in Missouri and Illinois. Although recovery may have begun, it may be a long and tough road for millions of Americans who are still reeling from job losses, upside down mortgages, and broken retirement plans.

The rate of consumer bankruptcies soared 14 percent as compared to consumer bankruptcies in February 2009, with 111,693 people filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy. This is also a nine percent increase in the number of people who filed for bankruptcy in January 2010 – numbers higher than we have seen since new bankruptcy laws were enacted in 2005. Economic experts believe that many families may have been borrowing money to see themselves through hard times – but now cannot pay back their loans.

Another interesting trend is that Chapter 7 bankruptcy is increasing significantly when Chapter 13 bankruptcy has only increased by three percent. While Chapter 7 bankruptcy allows families to erase much of their debt, Chapter 13 bankruptcy reorganizes debt and allows families to save their houses from foreclosure.

Unfortunately, consumers are not the only ones still being affected by the recent recession – business bankruptcies were also up this month with 6,557 business bankruptcy filings this February, compared with 6,390 business bankruptcy filings in February of 2009. Economists expect the rates of bankruptcy to rise even further in coming months.

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