According to a report released by the Administrative Office of the U.S. Courts a total of 1,074,225 consumer bankruptcy petitions were filed during 2008. That’s a 31 percent increase from the 822,590 bankruptcy cases filed in 2007. Experts expect bankruptcy filings to reach 1.4 million in 2009 because of increased financial pressures, job losses and foreclosures . The bankruptcy filings during 2008 are the most bankruptcy filings since 2005 when major changes were made to the bankruptcy code.
As more and more Americans find themselves facing foreclosure, job losses and an uncertain financial future many are opting to file bankruptcy in an effort to get a fresh financial start. The high number of bankruptcy filings is a sign that Americans are over-leveraged and unable to repay the large amount of debt accrued within the past ten years during the credit and housing boom. There are even more homeowners who have unwisely decided to forego bankruptcy despite the fact that they are losing their homes to foreclosure, facing tax liens and/or wage and bank garnishments. Bankruptcy is designed to save Americans who are drowning in debt; but unfortunately there is still a stigma attached to filing for bankruptcy. This type of mentality is causing a huge loss in American wealth. This administration needs to make Americans aware of their bankruptcy options and encourage them to file bankruptcy if they discover they are unable to pay their debts.