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Consumer bankruptcy filings surge in 2007

U.S. consumer bankruptcy filings surged nearly 40 percent in 2007 compared to the previous year, according to the latest data from the American Bankruptcy Institute, or ABI.

More than 800,000 consumers sought relief of their debts through bankruptcy compared to 573,203 filers in 2006, according to the ABI report.

Jessica Cecere, president of Consumer Credit Counseling Service of Palm Beach County/Treasure Coast of Florida Inc., says 21 percent of those 801,840 filers seeking bankruptcy counseling were seen through a network of Consumer Credit Counseling Service offices in Florida, Georgia, Mississippi and Tennessee.

Debtors are required to participate in bankruptcy counseling at a government-approved counseling agency before they can file. They receive a certificate upon completion, which is to be included in the papers that must be filed in bankruptcy court.

Cecere says the network of CCCS agencies have seen between 25,000 and 30,000 debtors per month for bankruptcy counseling.

"A lot of people coming in for bankruptcy counseling have medical debts, or are facing medical issues," she says.

Consumer bankruptcy filings decreased in December by 7.5 percent, compared to November. Bankruptcy insiders predicted that this slowdown would occur during the holiday season since many law offices and court systems close.

Bankruptcy filings are expected to increase even more this year because of consumer spending and the housing mortgage crisis.

Share your thoughts at bankruptcyblog@bankrate.com.

-- Posted: Jan. 4, 2008

 
 
 
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