The Administrative Office of the U.S. Courts released a report last week that
showed the number of bankruptcy filings increased by 8 percent last year. While
that number reflects more new filings over 2009, it is still quite a difference
in the 30 percent increase that was seen during 2006. But, the findings are
still proof that the economy has yet to see a significant amount of
improvement.
In 2009, there were 1.47 million bankruptcy filings while there was 1.59
million in 2010. Around 71 percent of that number were Chapter 7 filings. Under
Chapter 7 bankruptcy, assets are liquidated and any proceeds that are nonexempt
are paid directly to the creditors. According to the report, most of the new
bankruptcy filings were by individuals who did not have business related debts.
Only one circuit saw a slight drop in the amount of bankruptcy petitions.
Circuit 6 which includes Ohio, Kentucky, Michigan and Tennessee saw a reduction
of 2.5 percent in the new cases. The largest increase was in Circuit 9,
California, Arkansas, Hawaii, Montana, Arizona, Oregon, Idaho, Washington, the
Northern Marina Islands and Guam saw a significant increase in new bankruptcy
filings of around 19 percent. The filings in that circuit jumped from 339,005
up to 404,289.
The Administrative Office of U.S. Courts also reported that new filings
increased by almost 11 percent in the District of Columbia. Although the number
of new bankruptcy cases increased last year, it is still a remarkable
improvement over previous years. During 2008 and 2009, the 6th Circuit had a 20
percent increase, the 9th Circuit saw a staggering 56 percent increase and new
filings rose 34 percent in the District of Columbia.
