Remember when the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was going to make it, in the words of Senator Chuck Grassley, “more difficult for people to file for bankruptcy?” Well, it did — briefly. But now, according to statistics released by the Administrative Office of the U.S. Courts, bankruptcy filings (1,202,503) for the 12-month period ending March 31, 2009, were up 33.3% over the number of filings (901,927) for the 12-month period ending March 31, 2008. That’s the biggest increase since BAPCPA was passed.
Sure, most of those (1,153,412) were individual (non-business) bankruptcies. But the means test, which was designed to prevent “abuse” of the Chapter 7 discharge by channneling into Chapter 13 those with the means to repay at least some of their debt, hasn’t had much impact. Chapter 7 filings rose 46.3% compared to a 10.9% increase in Chapter 13 filings. Given the shape of the economy these days, it’s no wonder that so many don’t have the means…
But the biggest increase of all was in Chaper 11 (business reorganization) filings. For the 12-month period ending March 31, 2009, Chapter 11 filings rose a whopping 69.1%. It seems it’s not only individuals without the means these days….
Filed under: Finance | Tagged: bankruptcy, Credit, Economy, Finance
