Bankruptcy Filings Soar Over 2006, Officials Predict Continued Climb
PHOENIX, Ariz. — Full-year consumer bankruptcy filings jumped 40 percent throughout the country in 2007 over the previous year, according to the National Bankruptcy Institute.
The statistics revealed that consumer filings for the year reached 801,840, compared with 573,203 in 2006.
"The roughly 40-percent 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's executive director Samuel Gerdano, forecasting the upcoming environment.
As for December, the institute found that 66,389 consumer filings were recorded, which is actually a 7.5-percent decline from 71,799 filings in November.
Meanwhile, Chapter 13 filings accounted for 38.32 percent of consumer cases in December, which is also a slight decrease from November.
Looking specifically at the fourth quarter of 2007, Chapter 7 bankruptcies accounted for 72 percent of all personal cases in the U.S. bankruptcy courts. In fact, personal bankruptcies grew 41 percent over the fourth quarter of 2006, with 326,749 households filing or discharging.
"There's obviously an impact from the downturn in the housing market, subprime-loan problems and the increase in foreclosures," explained Chris Bayley, a bankruptcy specialist at the Phoenix law firm of Snell & Wilmer.
As of Jan. 16, a total of 875,899 open bankruptcies are being process for discharge by the U.S. bankruptcy courts.
Explaining what this means to special finance professionals, Robert Davies, president of www.OnlineBKmanager.com, said, "It's simple, 37 percent of bankrupt individuals purchase an automobile within 30 days of discharge, and a grand total of 70 percent purchase within a year of that discharge.
"This suggests a substantial increase in sales for dealerships marketing to the discharged bankruptcy market in 2008," he added.
According to www.OnlineBKmanager.com, here are the statistics of bankruptcies awaiting discharge broken down by state:
Alabama: 38,686
Arizona: 8,462
California: 52,375
Connecticut: 3,183
Washington, D.C.: 562
Georgia: 75,040
Idaho: 2,727
Indiana: 29,111
Kansas: 9,114
Louisiana: 21,306
Maryland: 13,292
Michigan: 42,999
Mississippi: 14,514
Montana: 1,140
Nevada: 10,046
New Jersey: 19,366
New York: 31,532
North Dakota: 714
Oklahoma: 15,340
Pennsylvania: 30,891
South Carolina: 15,141
Tennessee: 47,992
Utah: 7,610
Virginia: 24,026
West Virginia: 2,955
Wyoming: 618
Alaska: 584
Arkansas: 18,005
Colorado: 9,338
Delaware: 2,418
Florida: 35,890
Hawaii: 1,064
Illinois: 40,445
Iowa: 3,494
Kentucky: 15,601
Maine: 1,500
Massachusetts: 8,642
Minnesota: 9,320
Missouri: 20,482
Nebraska: 6,099
New Hampshire: 2,053
New Mexico: 3,549
North Carolina: 33,266
Ohio: 47,333
Oregon: 8,493
Rhode Island: 1,339
South Dakota: 972
Texas: 59,627
Vermont: 877
Washington: 13,706
Wisconsin: 13,060
Total: 875,899