According to an article in Bloomberg, consumer bankruptcies are on the rise and show no sign or decreasing. Experts predict that consumer bankruptcies will hit a high of 1.4 million by December 31st as more people face job losses and find it difficult to refinance debt. Last month along 126,000 consumers filed bankruptcy, a 34 percent increase from July 2008. And in the first six months of 2009, 675,351 consumers filed bankruptcy.
The article said:
“Rising unemployment on top of high pre-exiting debt burdens is a formula for higher bankruptcies through the end of this year,” ABI Executive Director Samuel Gerdano said in a statement. The group, composed of lawyers, accountants, bankers and judges, is based in Alexandria, Virginia.
Over the past ten years, homeowners have had the availability of home equity loans and lines of credit to cushion financially difficult times caused by job losses or emergencies such as medical debt. But since the credit contraction and foreclosure crisis, credit availability especially via the home has dried up. Many homeowners have no other viable option other than bankruptcy to weather the financial storm caused by a job loss, foreclosure or other financial emergencies. The rise in bankruptcy among Americans is expected to continue through 2010.