At 137,000 cases filed nationwide in May 2010 bankruptcy filings declined ever so slightly compared to 145,000 cases that were filed in April. However, the numbers have remained fairly constant. For the first 5 months of 2010 we've seen an uptick of 15% compared to the first 5 months of 2009. Works out to about 1 in 175 per capita with the highest levels of personal bankruptcy cases being concentrated in the Southeast and the Southwest of the country. Further, Chapter 7 continues to be the chapter of choice with the data showing that 74% of the cases filed were Chapter 7 cases. It appears that the legislation promulgated in late 2005 by Congress with a strident push by the financial industry that encouraged (punished?) debtors in bankruptcy to move towards Chapter 13 case filings to reorganize their debt rather than discharge it completely has been an abject failure. In my practice doing bankruptcy cases here in Minnesota I've noted the change in the real estate market as one of the major factors that has led to the decline in Chapter 13 filings. Chapter 13 was once strongly "fed" by the need to retain and preserve equity in people's homes. Now that the real estate is most often worth far less than what is owed on it there is no incentive to stand on one's head to keep it and barring other circumstances such as being too "asset heavy" for a Chapter 7 case or simply earning too much income to qualify for a Chapter 7 there is little incentive for most people to file a Chapter 13 vice a Chapter 7.
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