Bankruptcies Up 40% In 2007

Although December marked a slight decrease in Chapter 13 filings from November, 2007 overall logged a whopping 40% rise in the number of bankruptcy filings compared to 2006, reports the Wall Street Journal—over 800,000 filings in 2007, versus around 570,000 the previous year.

ABI Executive Director Samuel J. Gerdano said the situation is likely to worsen in 2008. “The roughly 40% spike in consumer bankruptcies during 2007 presages even higher filings this year, as the heavy consumer debt load is made worse by the home mortgage crisis,” Mr. Gerdano said.

By comparison, however, 2005 had over two million filings—but “that was the year a large number of consumers filed for bankruptcy protection before stringent new bankruptcy rules went into effect.”

“Consumer Bankruptcy Filings Rose 40% in ’07” [Wall Street Journal]
(Photo: Getty)