The 2011 bankruptcy statistics held a little bit of a surprise, as total bankruptcy filings declined by nearly 12 percent, reports The New York Times.
In total, there were about 1.4 million bankruptcy filings last year, according to the University of Illinois College of Law.
Most of the filings -- nearly 70 percent -- were Chapter 7. This is a type of bankruptcy that allows an individual to avoid repaying his or her debts if they pass certain qualifying "tests." It is also equivalent of a liquidation.
One-third of the bankruptcies were Chapter 13, which also are for individuals. In these bankruptcies, a person sets up a repayment plan and pays off one’s debts over three to five years.
Returning to the statistics, the daily bankruptcy rate in December was 4,585. That means nearly 5000 Americans every day file for bankruptcy.
What will be the future trend of the daily bankruptcy rate? The Federal Reserve is saying that consumer borrowing rose in November, reports The Times.
What the 2011 bankruptcy statistics also highlight is the fact that people should be more familiar with both Chapter 7 and Chapter 13 bankruptcies. Generally, people pay more attention to Chapter 11 bankruptcies, because they are big and massive and often take down some iconic company.
Yet, the kind of bankruptcies that hit home for people are not Chapter 11 at all. If you are considering bankruptcy, or if you’ve never considered bankruptcy but think that you should, you may wish to speak to a local bankruptcy attorney.
Do keep in mind that if student loans are the reason you want to file a bankruptcy, then you are largely out of luck. Though only an attorney can best evaluate your individual case.
Related Resources:
- Find an Atlanta Bankruptcy attorney (FindLaw)
- Bankruptcy Filings With Attorneys Up 98 Percent Over Five Years (FindLaw’s Atlanta Bankruptcy Law News)
- Facing Foreclosure? How Bankruptcy Can Help (FindLaw)
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