Bankruptcies Hit 1.44 Million in 2009 to End Financially Unstable Decade

Online, January 19, 2010 (Newswire.com) - Chicago - Jan. 19, 2010 - Bankruptcy filings reach 1.4 million in 2009 as unemployment, foreclosure, medical bills and credit cards created the perfect storm for consumer debt.

The 2009 numbers also underscored a decade of financial turmoil that saw more than 13 million consumers seeking bankruptcy protection to liquidate or restructure their debts, including over 113,000 filings in the last month of the decade.

Business owners were equally as susceptible to struggle, with nearly 90,000 businesses filing bankruptcy in 2009, and Chapter 11 reorganizations up a whopping 50 percent from the previous year.

Consumers and businesses were equally affected by the ongoing recession in 2009, with banks reluctant to lend, consumers to spend and firms to hire.

Unemployment was at 10 percent in the third quarter of 2009, which many experts predict will keep bankruptcy rates high for the next year or two.

Consumers were also affected by a new law designed to protect them from credit card companies. The Credit CARD Act of 2009, which introduces new consumer protections, led to many credit card companies creating new money making schemes to inflate profits before the provisions took full effect.

Elsewhere, the year-long debate over health care reform did little to protect consumers against mounting medical debt.

According to the survey Medical Bankruptcy in the United States, released in 2009, over 60 percent of all consumer bankruptcies are related to medical debt, including lost wages during recovery or to care for a sick relative.

The past decade saw more consumers filing bankruptcy than any other, including a record 2 million in 2005. That year saw a new law enacted with stricter qualifications for filing a Chapter 7 bankruptcy, and consumers rushed to file before the deadline.

However, while the intent of the law was to make it more difficult for some to file, filings have actually continued to increase each year following 2006.

Total Bankruptcy (www.totalbankruptcy.com), a consumer web site offering information on bankruptcy as well as the chance to connect with a local bankruptcy attorney, has created a new section compiling topical statistics and information at the following URL: http://www.totalbankruptcy.com/blog/category/year-in-bankruptcy/