Bankruptcy Filings Soar Over 2006, Officials Predict Continued Climb

PHOENIX, Ariz. — Full-year consumer bankruptcy filings jumped 40 percent throughout the country in 2007 over the previous year, according to the National Bankruptcy Institute.

The statistics revealed that consumer filings for the year reached 801,840, compared with 573,203 in 2006.

"The roughly 40-percent 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," said ABI's executive director Samuel Gerdano, forecasting the upcoming environment.

As for December, the institute found that 66,389 consumer filings were recorded, which is actually a 7.5-percent decline from 71,799 filings in November.

Meanwhile, Chapter 13 filings accounted for 38.32 percent of consumer cases in December, which is also a slight decrease from November.

Looking specifically at the fourth quarter of 2007, Chapter 7 bankruptcies accounted for 72 percent of all personal cases in the U.S. bankruptcy courts. In fact, personal bankruptcies grew 41 percent over the fourth quarter of 2006, with 326,749 households filing or discharging.

"There's obviously an impact from the downturn in the housing market, subprime-loan problems and the increase in foreclosures," explained Chris Bayley, a bankruptcy specialist at the Phoenix law firm of Snell & Wilmer.

As of Jan. 16, a total of 875,899 open bankruptcies are being process for discharge by the U.S. bankruptcy courts.

Explaining what this means to special finance professionals, Robert Davies, president of www.OnlineBKmanager.com, said, "It's simple, 37 percent of bankrupt individuals purchase an automobile within 30 days of discharge, and a grand total of 70 percent purchase within a year of that discharge.

"This suggests a substantial increase in sales for dealerships marketing to the discharged bankruptcy market in 2008," he added.

According to , here are the statistics of bankruptcies awaiting discharge broken down by state:

Alabama: 38,686

Arizona: 8,462

California: 52,375

Connecticut: 3,183

Washington, D.C.: 562

Georgia: 75,040

Idaho: 2,727

Indiana: 29,111

Kansas: 9,114

Louisiana: 21,306

Maryland: 13,292

Michigan: 42,999

Mississippi: 14,514

Montana: 1,140

Nevada: 10,046

New Jersey: 19,366

New York: 31,532

North Dakota: 714

Oklahoma: 15,340

Pennsylvania: 30,891

South Carolina: 15,141

Tennessee: 47,992

Utah: 7,610

Virginia: 24,026

West Virginia: 2,955

Wyoming: 618

Alaska: 584

Arkansas: 18,005

Colorado: 9,338

Delaware: 2,418

Florida: 35,890

Hawaii: 1,064

Illinois: 40,445

Iowa: 3,494

Kentucky: 15,601

Maine: 1,500

Massachusetts: 8,642

Minnesota: 9,320

Missouri: 20,482

Nebraska: 6,099

New Hampshire: 2,053

New Mexico: 3,549

North Carolina: 33,266

Ohio: 47,333

Oregon: 8,493

Rhode Island: 1,339

South Dakota: 972

Texas: 59,627

Vermont: 877

Washington: 13,706

Wisconsin: 13,060

Total: 875,899

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