Georgia Consumer Bankruptcy Filings Slow in November
In Georgia and across the country, the steady increase in Chapter 13 and Chapter 7 bankruptcy filings finally slowed in November for the first time in several months. However, consumer analysts are hesitant to be optimistic about the decrease, as the United States is on track to reach a record high 1.6 million consumer bankruptcy filings in 2010.
According to the American Bankruptcy Institute’s analysis of data from the National Bankruptcy Research Center, there were almost 115,000 fewer consumer bankruptcy filings in November than in October, representing a nationwide drop of 13 percent. However, November’s filings were still over two percent higher than the same month last year, and there have already been more filings in 2010 than there were in all of 2009.
Analysts expect that 2010 will have seen approximately 1.6 million consumer bankruptcy filings by the time the year ends in a few weeks, which is the highest number since the federal bankruptcy process was overhauled by Congress in 2005. Before that legislation, which made it more difficult to receive bankruptcy protection, there was a rush of filings by people who would not be able to file under the new laws, causing the record surge.
Despite this year’s overall increase in filings, analysts say that the November drop could represent a slowdown caused by financially wary consumers spending and using credit less. Analysts say that this may contribute to a dismal economy in the short term, but will be better in the end. “When consumers pull back, two things happen,” said American Bankruptcy Institute Executive Director Samuel Gerdano. “The economy stalls, but in the longer term we do see a leveling off and then perhaps even a dip in consumer bankruptcy filings.”
Source: Wall Street Journal, “Personal Bankruptcy Filings Slowing but High“, Sara Murray, 1 December 2010