The number of consumer bankruptcies rose to their highest levels since October 2005 in July with many households across the United States struggling to deal with past debt and higher unemployment rates.
The total filings for July reached 126,434, which amounts to a 34.3% increase from the previous period last year and an 8.7% increase over June’s numbers. These are figures that were released by the American Bankruptcy Institute.
As mentioned before, the amount of bankruptcy filings reached the highest monthly total since October 2005 when the Bankruptcy Abuse Prevention and Consumer Protection Act was signed into law. This bankruptcy filing amount actually reflects the sustained and growing financial burden currently carried by American households.
The equation remains unfortunately simple: the fewer jobs, the less income is available and when consumers don’t have jobs, they obviously cannot keep current on their bills.
The scope of debt has been broadened in an economic environment where unemployment is becoming a bigger factor combined with pre-existing debt that is creating a string of higher bankruptcy figures for the remainder of 2009.
At present, the nation’s unemployment rate is running at about 9.5%. This figure is a 26-year high. Any prospects for a revival of the flagging employment markets are not expected to materialize in the near future. Analysts are expecting a further increase in the percentage of unemployment in the coming months.
For those who have been fortunate enough to keep their jobs in the recession, there are no signs that this group will receive any increases in income. Recent figures provided by government reports showed a 0.1% ease of income rates for June, with May pretty much at a standstill, minus any influence that the government stimulus may have had. Another figure puts overall spending up by 0.4%.
Tags: Bankruptcy Abuse Prevention and Consumer Protection Act, bankruptcy, consumer bankruptcy
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