The number of bankruptcy filings continues to rise. The surge is primarily because of job losses, and the fact that people are flat out not able to keep up with their mortgage payments.
Rising bankruptcy filings
The primary purpose of the amendments to the bankruptcy code back in 2005 was to try to push people into a Chapter 13 bankruptcy rather than a Chapter 7 bankruptcy by virtue of the Means Test. Once we fell into the “Great Recession,” the Means Test no longer stood in the way of most debtors because many households experienced a reduction in income, or one spouse lost their job.
Many are anticipating that the number of bankruptcies filed will continue to rise in 2011 and 2012 due to the terrible state of the economy.