US bankruptcies approach 1 million

Scary stats from the US Court office out today: In the 12-month period ending June 30, 2008, there were nearly 1 million new bankruptcy cases filed.

Some experts predict that by year's end there could be well over 1 million bankruptcies and that's being conservative.  Specifically, there were 967,831 bankruptcy cases filed, an almost 30% increase from 2007. In the business world filings were up almost 42% to 33,822 from the 23,889 reported in June 30, 2007.

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 37% to 615,748 from the 450,332 Chapter 7 filings in the 12-month period ending June 30, 2007.

Chapter 11 and 13 filings, where business or debtors' assets are typically reorganized with the plan to repay debts were up almost 31% and 17% respectively.

The court office said that third quarter filings, the 3-month period ended June 30, 2008, totaled 276,510, the highest quarterly filings since the Judiciary's first fiscal year quarter in 2006 (December 31, 2005). So far, filings for the June quarter are the highest of any quarter in fiscal year 2008 (October 1, 2007 - September 30, 2008). First quarter filings totaled 226,413 and second quarter filings totaled 245,695, according to the court.

The US Bankruptcy Court's highest number of filings was its 6th District, which includes Kentucky, Michigan, Ohio and Tennessee.  The 9th District, which includes California, Arizona and Nevada had the largest percentage increase - almost 61%.

What's behind all the negativity? Experts say the reasons are many but oil prices, the housing meltdown and credit crunch are the chief problems.

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