By Ryan C. Wood
After the passage of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act and the rush to file bankruptcy before the law change, many attorneys believed bankruptcy filings would decrease. Well, the mortgage crisis and bad economy changed all of that. The following is a comparison of bankruptcy filings under Chapter 7, Chapter 13 and Chapter 11 for the United States Bankruptcy Court Northern District of California.
In 2007 there were a total of 127,359 bankruptcy cases filed in the Northern District of California. Each month and each quarter of the year filings increased month after month. 2007 really was the start of increases in bankruptcy filings. The 2nd quarter of 2007 realized a 16% increase in bankruptcy filings, the 3rd quarter of 2007 increased 7% more and the 4th quarter of 2007 increased another 14% for a total of 21,758 filings for the last three months of 2007. 2008 realized an even larger increase in cases filed. The 1st Quarter increased 18% from the last quarter of 2007, the 2nd quarter of 2008 increased 26%, the 3rd quarter of 2008 increased 14% and the 4th quarter increased by 3% for a total of 38,011 filings for the last three months of 2008.
Increase in Filings For the United States Bankruptcy Court Northern District of California from 2007 – 2008
Quarter. . . . . . .Year . . Cases Filed . . Quarter . . . . . . .Year . . . Cases Filed . . . . 2007 – 2008 Increase
1st Quarter 2007 15,041 1st Quarter 2008 25,727 71% more than 2007
2nd Quarter 2007 17,505 2nd Quarter 2008 32,387 85% more than 2007
3rd Quarter 2007 18,778 3rd Quarter 2008 37,083 97% more than 2007
4th Quarter 2007 21,758 4th Quarter 2008 38,011 75% more than 2007
Increase in Bankruptcy Filings For the Whole 9th Circuit from 2007 – 2008
Quarter . . . . . . Year . . .Cases Filed . . . . Quarter . . . . . .Year . . Cases Filed . . . 2007 – 2008 Increase
1st Quarter 2007 26,960 1st Quarter 2008 42,165 56% more than 2007
2nd Quarter 2007 31,124 2nd Quarter 2008 52,874 69% more than 2007
3rd Quarter 2007 32,808 3rd Quarter 2008 60,026 82% more than 2007
4th Quarter 2007 36,467 4th Quarter 2008 61,395 68% more than 2007
As shown above, bankruptcy filings increased by approximately 70% from 2007 to 2008. The number of foreclosures and adjusting interest only or negative amortization mortgages contributed significantly to the increase in bankruptcy cases. Also layoffs and the general sluggishness of the economy contributed as well. As 2009 approached the number of filings continued to increase at an even larger percentage. Bookmark Bay Area Bankruptcy Buzz for more information about the increase in bankruptcy filings during 2009. We will also be providing comparisons of the increase and number of filings in various states throughout the United States.
Contact us today for information from our bankruptcy lawyer or bankruptcy attorney to find out if bankruptcy is right for you and your family. You may reach us toll free at 1-877-963-9543 or submit your information with our on-line submission form.