U.S. consumer bankruptcy filings increased 40 percent nationwide in October from the same period a year ago, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center (NBKRC). The overall October consumer filing total of 106,266 also represented a 20 percent increase from September. Chapter 13 filings constituted 32.6 percent of all consumer cases in October, a slight decrease from September.
The October consumer filing total also represents the first time that bankruptcies have topped 100,000 since the Bankruptcy Abuse Prevention and Consumer Protection Act went into effect in October 2005. The 880,076 consumer filings through the first 10 months of 2008 (Jan. 1 – Oct. 31) have already eclipsed the filing total of 822,590 for all of last year.
“October’s sharp spike in new consumer bankruptcies confirms the severe financial stress on household budgets caused by high debts, flat incomes, and declining home values,” said ABI Executive Director Samuel J. Gerdano. “We expect the 2008 numbers to be the highest since the new bankruptcy law went into effect in 2005.”
Published: Nov 4, 2008