According to data from U.S. bankruptcy courts and compiled by bankruptcy data firm Automated Access to Court Electronic Records there were more than 1 million filings in the United States in 2008 -- the most since a rewrite of bankruptcy laws went into effect in 2005.
Chapter 7 allows people to discharge all of their debts, while Chapter 13 allows you to repay your debts with a e to 5 year plan.
The greatest increases in per capita bankruptcy filings were found in Nevada (7.15 filings per 1,000 residents), Delaware (4.02), California (3.57), Florida (3.63) and Rhode Island (3.99). Even thought it was spread unevenly not one jurisdiction showed a decrease in filings, whether measured on a per capita basis or by the raw numbers of filings. Tennessee had the dubious distinction of having the overall highest per capita rate of filings for the second straigt year. While Alaska retained its title as the land of the fewest personal bankruptcies.
Businesses were not left out. Chapter 11 bankruptcies, under which businesses file for court-supervised reorganization or liquidation, also soared. A total of 10,084 companies filed under Chapter 11 in 2008. That represented an increase of 62% and was more than double the number of such filings in 2006.
If the economy continues to worsen then we will see this number continue to increase.
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