Businessweek is reporting that U.S. consumer bankruptcies could top 1.6 million this year, after a reported increase of 9 percent in June.
As our Santa Ana bankruptcy attorneys reported last month on our Orange County Bankruptcy Lawyer Blog, the number of consumers filing bankruptcy in Orange County increased 40 percent during the first six month of the year.
Nationwide, the 137,798 bankruptcies in June represent a 9 percent increase from last year, according to the American Bankruptcy Institute.
“Debt burdens, unemployment and an uncertain economic climate continue to weigh on consumers,” Samuel J. Gerdano, the institute’s executive director, said in the statement. “The pace of consumer filings this year remains on track to top 1.6 million filings.”
The most common reasons for filing Chapter 7 bankruptcy in the Los Angeles area include bad mortgage debt, credit card debt, medical bills and divorce.
Last year’s 1.4 million consumer bankruptcy filings represented an increase of 32 percent over 2008. In fact, bankruptcies have increased steadily since the implementation of the Bankruptcy Abuse Prevention Act. That law, which was pushed through by the banking industry, sought to make it more difficult to file Chapter 7, or liquidation, bankruptcies. It establishes an income to debt ratio and can require a repayment plan in certain instances.
But the reality is that insurmountable levels of consumer debt is what drives bankruptcy filings. Bankruptcy offers consumers the most powerful tool available to stop debt collectors, foreclosure, or other harassment while a consumer regains control of their financial life.
Consulting an experienced Riverside bankruptcy lawyer can help determine the best course of action to deal with consumer debt and restore your financial independence. The Shakoori Law Group, a law firm dedicated to bankruptcy, debt collection defense and consumer protection throughout the Los Angeles area, can be reached at (877) 529-2188.