National Bankruptcy Filings Shift More to Chapter 13

Bankruptcy Law Blog from Ventura Bankruptcy Attorney Andrew S. Mansfield

The American Bankruptcy Institute reports today that Chapter 13 filings constituted 31.5 percent of all consumer cases in October, a slight increase from September.  While the mix between Chapter 7 and Chapter 13 bankruptcies has shifted, overall consumer bankruptcies are declining around the nation.  

“The trend of declining filings has been consistent with consumers continuing to reign in their spending, household debt, and an overall pull back in consumer credit,” said ABI Executive Director Samuel J. Gerdano. “Total consumer filings for 2011 will be less than 2010.”

But why? Some commentators attribute the decline to negative factors.  The lull in foreclosures (soon to pick up again) freed up some cash consumers were committing to mortgages.  Many unemployed are at the tail end of extended unemployment.  Other commentators note that consumers are so discouraged some are simply letting their debts go into default and collection.