Bankruptcy Filings Up 35% in Last Year

There were 1.3 million bankruptcy filings in the year that ended on June 30, a 35% increase over the previous year’s total of 967,831, according to data compiled by the Administrative Office of U.S. Courts.Of those filings, 1.2 million were nonbusiness and 55,000 were business filings, compared with 934,009 nonbusiness and 33,822 business filings during the year ending June 30, 2008.There were 907,603 Chapter 7 filings, a 47% increase from the previous 12 months. Chapter 11 filings totaled 13,951, a 91% increase from the previous year. There were 422 Chapter 12 filings, a 34% increase over the previous 12 months. Chapter 13 filings totaled 384,187, a 12% increase from the previous year.There were 381,073 bankruptcy filings in the quarter ending June 30, compared with 330,477 for the quarter ending March 31 and 276,510 for the quarter ending June 30, 2008.The increases in bankruptcy, coupled with more home foreclosures, could put additional pressure on credit unions’ balance sheets because of the financial strains on their members.Foreclosure filings rose 6.7% last month, according to data released by RealtyTrac, an online seller of foreclosed properties. Nationally, 360,149 properties receiving a foreclosure filing during July, compared with 336,173 in June.Also, while the rate of job losses is declining, there were 247,000 people who became unemployed last month.“Everything in the economy-housing prices, unemployment, wage cuts, furloughs, reduction of full-time jobs to part-time-all that leaves consumers under financial stress. And they’re not able to pay back their loans,” CUNA Senior Economist Steve Rick wrote in an analysis of the data.–[email protected]