Bankruptcies hit 1 million for 2008

Can the steaming pile of bad economic news continue to grow? You betcha. The stench today: Federal bankruptcy filings hit 1,042,993 for the 12-month period ending September 30, 2008, up more than 30% over 2007. Not only that, but September 2008 filings are the highest of any 12-month period since the 2006 implementation of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, when there were 1,112,542 filings in the year ending September 30, 2006, according to a report issued today by the Administrative Office of the US Courts. The federal Judiciary's fiscal year is the 12-month period ending September 30. The bankruptcies reported today are for October 1, 2007 through September 30, 2008.

Business bankruptcies were worse. For the 12-month period ending September 30 filings totaled 38,651, up 49% from the 25,925 business filings in September 2007. There were 27,333 business bankruptcy filings in September 2006.

Even more telling perhaps is that Chapter 7 filings - where typically the business or debtor's assets are shut down and sold off - were up almost 40% to 679,982, from the from the 484,162, Chapter 7 filings in FY 2007.

Chapter 11 and 13 filings, where business or debtors' assets are typically reorganized with the plan to repay debts were up almost 49% and 14% respectively.

Tennessee, Alabama and Georgia are ranked 1-3 in terms of per capita bankruptcy filings.

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