The executive director of the prestigious American Bankruptcy Institute predicts that consumer bankruptcy filings will increase during 2011. In a press release issued on January 3, the executive director of ABI, Samuel J. Gerdano, states: “The steady climb of consumer filings notwithstanding the 2005 bankruptcy law restrictions demonstrate that families continue to turn to bankruptcy as a result of high debt burdens and stagnant income growth…We expect that consumer filings will continue to rise in 2011.”
The figures are now in for 2010. They show the highest number of filings in five years, since Congress amended the bankruptcy code to make it more difficult for consumers to seek bankruptcy protection. During 2010, 1,530,078 consumers sought protection under the bankruptcy laws. This was a 9% increase from the number of filings in 2009.
Despite the more stringent standards for filing that were enacted in 2005, more individuals and families have sought legal protection from excessive debt every year since Congress passed these new requirements. This is a sign that individuals and families have a sincere and urgent need to restructure their finances to create a better financial future. That is certainly the case for Orlando residents, who are struggling in one of the most challenging economies in the country. The December issue of the Orlando Business Journal reported double-digit growth in business and personal bankruptcy filings in the Orlando area, compared to the number of filings in 2009.
The number of filings for Chapter 7 bankruptcy in the Orlando area increased by 12 percent during 2010. During the period of September 2009 to October 2010, the Middle District of Florida had the second highest number of bankruptcy filings in the nation, second only to the Los Angeles area. The Middle District court handles bankruptcies for Orlando, but also includes Jacksonville, Tampa and Fort Myers. According to the statistics from the Middle District, 55,600 Orlando residents have filed for bankruptcy since 2007 when the recession took hold of the economy.
Certainly, consumers in Orlando have on their list of new year resolutions avoiding new debt, seeking employment, and keeping their homes out of foreclosure. We can only hope that the economy improves and that these goals will be reached by many Orlando residents.
However, many Orlando residents will also find that Chapter 7 or Chapter 13 bankruptcy will be part of their plan to create a better financial future by eliminating or restructuring excessive debt that can not realistically be repaid to creditors.
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