BiggerPockets

Record Rise in Personal Bankcruptcies as compared to 2008

Friday, June 12

Bankruptcy filings were up 33.3 percent during the past year according to the Administrative Office of the U.S. Courts. Between March 2008 and March 2009 there were 1.2 million bankruptcies compared with 902,000 during the prior year.  Of this year’s bankruptcy filings only 49,000 involved businesses, the rest were all personal bankruptcies.

Administrative Office of the U.S. Courts recently declared that there was a 33.3 % rise in bankruptcy filing between the period of march 08 - march 09 as compared to last year.But most alarming thing was the percantage of personal bankruptcies being as high as 90% .

These record increase also go on to esrablish the truth that the changed Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, have been largely in favor of banks and credit companies.

In this particular Act of 2005,there is a particular clause which says that before a borrower files for bankruptcies ,he needs 180 days compulsory counselling.Also a bankruptcy judge is only allowed to modify in mortgages bankruptcy rulings for second homes and not primary homes.

So what does it mean to Foreclosure and Loan Mod Industry ?

It just shows how skewed the laws are for the banks and lenders.I think it is time for capitol hil to take some tough decisions on this issue.

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