Bankruptcy Article of the Week
1st Quarter Bankruptcy Statistics Show 79% Increase in Chapter 7 Filings
When at long last the first quarter bankruptcy filing statistics were released, the mainstream media once again made a quick comparison and reported that filings were down more than 60%.
That's true, of course, when you compare the year ending March 2006 with the year ending March 2007 — the first time period takes in the pre-law-change rush to file, and the second takes in the dearth of filings in the immediate wake of the law change. Those numbers don't mean much.
But the 1st quarter statistics are significant because they provide the first opportunity to compare "same period last year" statistics entirely post-BAPCPA. That comparison shows a dramatic increase in consumer bankruptcy filings, particularly Chapter 7 filings.
| Total Non-Business Bankruptcy Filings | Percent Change | |
|---|---|---|
| Q1, 2006 | Q1, 2007 | |
| 112,685 | 187,361 | + 66.26% |
| Non-Business Chapter 7 Bankruptcy Filings | Percent Change | |
|---|---|---|
| Q1, 2006 | Q1, 2007 | |
| 63,250 | 113,659 | + 79.69% |
| Non-Business Chapter 13 Bankruptcy Filings | Percent Change | |
|---|---|---|
| Q1, 2006 | Q1, 2007 | |
| 49,314 | 73,579 | + 49.2% |
The increase comes as no surprise to consumer bankruptcy attorneys. Not only are we seeing the increase in our own practices, but most of us predicted long before BAPCPA took effect that it wouldn't work out the way the credit industry had hoped. Quarter by quarter, the trend is clear.
| Chapter 7 Filings | ||||
|---|---|---|---|---|
| Q1, 2006 | Q2, 2006 | Q3, 2006 | Q4, 2006 | Q1, 2007 |
| 63,250 | 91,674 | 96,442 | 98,824 | 113,659 |
How soon we'll reach pre-BAPCPA filing rates remains to be seen, but it seems more a question of "when" than "whether" at this point. It's unfortunate that some of that decade of lobbying and the millions of dollars involved couldn't have gone toward providing real solutions for the people who are no less in financial crisis today than they were before BAPCPA set up additional obstacles for them.
Start Fresh Today Team Update
Due to the exciting growth of SFT, we have moved into new offices at 25 E. Washington St. in Chicago, IL. With the additional space, we will be soon hiring more enthusiastic SFT team members to assist with our growing Attorney Client Base. If you are ever visiting the area, please let us know!
Kevin's Corner
Practice Management Tip of the Week:
"Connecting with consumers while they're accessible and while they're motivated is one of the keys to converting prospects into clients."
- Kevin Chern
President, Start Fresh Today
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