Many reports have showed that bankruptcy filings have surged in great heights during the first half of the year. This was generated by the continued unemployment rate, foreclosures, credit card debts, mortgages, student loans and health related expenses that consumers and businesses had to face.
Some states that were reported to have high bankruptcy filings this year compared to the previous year include, but not limited to, New York, Nevada, Colorado and Alabama according to data from American Bankruptcy Institute and Automated Access to Court Electronic Records (AACER). Chapter 7 and Chapter 13 were filed in these cases wherein petitioners seek to be completely discharged of all debts or given a provision of a 3-5 year plan of reorganization, respectively.
Personal bankruptcy filings resulted as an effect of the more serious state of major businesses around the US. Many large companies have sought the protection of bankruptcy law in the midst of this global financial crisis. A chain reaction was ignited when small businesses soon followed from filing bankruptcy as well. Jobs started to decrease while commodities and daily cost of living continue to increase which affected many consumers in the process.
