How many people filed for bankruptcy in 2010?

As an increasing amount of working families fell victim to job losses, plunging home values, and unforgiving creditors, the number of people in the US filing for bankruptcy rose by 9 percent last year. The total number of bankruptcy filings in 2010 was 1.53 million.

The figure was the highest since 2005 when changes in the bankruptcy laws, making it more difficult and costly to file, led to a sharp decline in the number of Americans seeking court protection. The recent spike in cases is indicative of just how desperate large segments of the American population are, despite the official claims of an economic recovery.

Over the last three years, as the economic recession and 2008 crash took hold, 4 million consumers filed for bankruptcy, with last year’s numbers matching the record levels reached before 2005. While most filers earn less than $30,000 and lack a college degree, a growing percentage of families with incomes above $60,000 and college degrees are being forced into bankruptcy.

The growth in personal insolvency last year was seen in virtually every part of the country, according to the American Bankruptcy Institute. The sharpest rise was in the Southwest and Southeast, with Nevada recording 15,000 filings per million, more than double the 6,600 filings per million recorded nationwide. The state has the nation’s highest unemployment rate and credit card and mortgage delinquency, and, according to realtytrac.com, one in every 99 homes is in foreclosure.

After Nevada, Georgia and Tennessee had the highest filing rates, each with more than 10,000 filings per million, according to the report. The states with the highest year-to-year increase were Hawaii (22 percent), California (19 percent), Utah (19 percent) and Arizona (18 percent).

In South Florida personal bankruptcy filings rose by a staggering 40 percent, the Sun-Sentinel reported, with the number of cases in Palm Beach, Broward and Dade counties rising from 24,681 in 2009 to 34,579 in 2010. Local reports attribute the sharp rise to the pace of home foreclosures, joblessness in the state—where the unemployment rate is 12 percent—and a wave of business closures.

Medical expenses are one of the biggest causes of personal bankruptcy, with a Harvard University study carried out before the economic downturn attributing 62 percent of all filings to health care debts. The study noted that 78 percent of those filing bankruptcy had medical insurance.

However, according to the Economic Policy Institute, family health insurance premiums more than doubled between 1999 and 2009, far outpacing workers’ earnings and overall inflation, as employers increasingly dumped the costs of medical care on their workforces.

The sharp increase in long-term joblessness—the direst since the Great Depression—has worsened the situation. More and more families are forced to rely on credit cards to pay for food, utilities and other basic necessities, in addition to picking up the cost of their health insurance.

Increasingly those who still have a job are facing wage cuts and being forced into part-time and temporary positions. In the past, home equity loans—based on the rising value of their homes—could be gotten to offset the decline in income. These are no longer an option as homeowners owe far more than the dwindling value of their homes. The tightening of consumer credit has also pushed people over the edge, after they borrowed in an effort to prevent bankruptcy.

The crisis is affecting every demographic group. A 2010 study from the University of Michigan Law School, “The Rise in Elder Bankruptcy Filings,” found that those 65 and older are the fastest-growing segment of the US population seeking bankruptcy protection, owing a median $22,562 to credit card companies.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at staff1. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.