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Consumer Bankruptcy Filings Rise Nearly 40%
By James Comtois
Due in part to the home mortgage crisis, U.S. consumer bankruptcy filings went up by nearly 40% in 2007 from 2006, according to the American Bankruptcy Institute, relying on data from the National Bankruptcy Research Center.
ABI is a multi-disciplinary, nonpartisan organization that was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. ABI membership includes more than 11,500 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy experts.
NBKRC is an online research center that offers subscribers access to constantly updated research and statistics on bankruptcy filings.
The data showed that the overall consumer filing total for the 2007 calendar year (January 1 to December 31 inclusive) reached 801,840, compared to the 573,203 filings recorded during 2006. In fact, ABI reported in November 2007 that the total U.S. bankruptcies filed just during the first three quarters of 2007 (623,399) eclipsed the total 2006 numbers.
"The roughly 40% spike in consumer bankruptcies during 2007 presages even higher filings this year, as the heavy consumer debt load is made worse by the home mortgage crisis," said ABI executive director Samuel J. Gerdano.
Mr. Gerdano added that the current mortgage market will most likely continue to exacerbate this trend in rising bankruptcies in the upcoming year. "High household debt and the fallout from rising mortgage costs could contribute to a surge in bankruptcies in 2008," he said.
However, NBKRC's data also showed that the 66,389 consumer filings in December 2007 represented a 7.5% decrease from the 71,799 filings in November 2007. Chapter 13 filings constituted 38.32% of all consumer cases in December, a slight decrease from the previous month.
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