These tough economic times have seen an increase in the numbers of individuals, families, consumers and businesses filing for bankruptcy. Bankruptcy can relieve individuals and those with business debts from liability for most unsecured debts and prevent the creditors owed those debts from taking collection actions against the debtor. While the level of protection varies, businesses are also eligible to file for bankruptcy protection. During the current recession, the amount of debt for many has become unmanageable. Those who have contacted The Sader Law Firm, a Kansas City bankruptcy attorney firm, and filed for bankruptcy in the past year include medical professionals, lawyers, teachers, business owners and a wide range of professionals and active community members.
According to a July 2, 2009 Bloomberg report, there were 675,351 consumer bankruptcy filings in the first half of 2009, a 36.5 percent increase over 2008 numbers. More than 30,000 businesses filed for bankruptcy protection in the first half of 2009, up 64 percent from the nearly 18,500 in the same period last year, the American Bankruptcy Institute said. In addition, the number of Chapter 11 business reorganizations in the period was 7,396, up 113 percent from 3,470 last year. Chapter 7 business liquidations jumped by 57 percent, to 20,375, up from 13,002 last year. Filings by individuals or households with consumer debt increased 35 percent to 681,217, up from 503,749 last year.
“The U.S. economy relies primarily on consumer spending, but rising levels of household debt can put a heavy burden on families,” Samuel Gerdano, Executive Director of American Bankruptcy Institute, said in a recent release. “When families sustain an unexpected financial setback on top of this burden, they often resort to bankruptcy as a way out.”
“The increase in filings through the first half of this year is a product of continued financial stresses weighing on both consumers and businesses,” Gerdano said. “In this challenging economic environment, we expect bankruptcies to surge past 1.4 million by year end.”
The Institute reported that Missouri ranks nineteenth and Kansas ranks twentieth among the states for the number of households per bankruptcy filing for the year that ended March 31. Kansas had 70.4 households per bankruptcy filing. Nationally, one bankruptcy was filed for every 72.8 households for the period, up 49 percent from 1993.
The statistics are not surprising. Higher consumer and business debt during the recession has caused many professionals and businesses to contact The Sader Law Firm, a Kansas City business bankruptcy attorney firm and consumer bankruptcy attorney firm, to seek appropriate relief.