Bankruptcy Filing Numbers
A look at recent bankruptcy statistics shows some interesting patterns that reveal some additional factors of the state of today’s economy. In general, personal bankruptcy filings are down while business bankruptcy filings are increasing.
Up until the changes in bankruptcy laws in 2005, personal bankruptcy filings were on a steady decline. After a significant drop in filings for Chapter 7around 2006 to 2008, personal filings began to rise once again. Once the recession hit in 2009, filings began to spike once again. However, a recent trend reveals that personal filings are beginning to take a downward turn, suggesting that personal financial standings are becoming more stable. Although this news is good news, it is surprising given the amount of unemployment and trouble with foreclosures facing many Americans.
Business bankruptcies were once a rare, or less publicized, occurrence. However, recent trends show that more businesses are entering bankruptcy, especially Chapter 11 debt reorganization. While there is much to be gained from a Chapter 11 case the biggest benefit is that it allows companies the chance at debt resolution while remaining in operation. These days, large industry leaders could have a serious impact on consumerism and local economies if they weren’t afforded the chance to restructure under the Chapter 11 umbrella. In such a case, business bankruptcy filings increasing could simply mean that more companies are taking financial management more seriously and looking to change the way they do business.