Personal bankruptcy filings in Massachusetts jumped almost 9 percent in 2010, compared to 2009, according to a new report from The Warren Group, publisher of Banker & Tradesman.
There were 17,496 Chapter 7 bankruptcies filed in Massachusetts last year, an 8.5 percent bump from the 16,118 filed in 2009, and a 45 percent hike from 12,034 in 2008. Chapter 7 of the U.S. bankruptcy code is the most common option for individuals seeking debt relief, and accounted for 75 percent of Massachusetts’ bankruptcy filings last year.
The fourth quarter saw the slowest quarterly bankruptcy pace of 2010, with 5,423 filers statewide seeking some kind of bankruptcy protection under Chapters 7, 11 and/or 13, compared to 5,350 in the fourth quarter of 2009. The second quarter experienced the most bankruptcy volume, with a combined 6,193 filings.
"Bankruptcy filings reflect the economy as a whole – and it’s clear we are not on a fast path toward recovery. Consumers are clearly struggling to pay off the debt they’ve accrued over the years, and are turning to bankruptcy as a last resort," said The Warren Group CEO Timothy M. Warren Jr.
Chapter 7 bankruptcy filings also accounted for almost 75 percent of all filings tracked by The Warren Group in the fourth quarter. Chapter 7 bankruptcy filings totaled 4,008 in the fourth quarter, a 4.8 percent decrease from 4,212 during the same period in 2009.
People filing under Chapter 7 bankruptcy can eliminate most debt after non-exempt assets are used to pay off creditors. In contrast, Chapter 13 requires debtors to arrange for a three- or five-year debt-repayment plan.
Filings under Chapter 13 of the U.S. bankruptcy code surged 52 percent to 5,392 in 2010, from 3,547 in 2009. The number of Chapter 13 filings rose 26.5 percent to 1,359 in the fourth quarter of 2010, up from 1,074 filings during the same period in 2009.
Chapter 11 filings, which are used for business bankruptcies and restructuring, also rose in 2010. Filings increased 10.2 percent to 237, up from 215 in 2009. Filings decreased in the fourth quarter, however. A total of 56 Chapter 11 bankruptcies were filed in the fourth quarter, down from 64 during the same period in 2009.
A total of 23,125 filers statewide sought protection under Chapter 7, Chapter 13 and Chapter 11 of the U.S. bankruptcy code in 2010, up from 19,880 in 2009.
