Times may be tough for many Americans, but the 2012 Report of Statistics Required by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 indicated fewer people filed for bankruptcy in 2012 than in 2011. While 1.1 million bankruptcy filings were reported in 2012, this is a 14 percent decrease from the previous year. Filings were down in 2011 as well, with an 11 percent decrease from 2010.
Chapter 7 Bankruptcy Filings
Another interesting fact is fewer chapter 7 bankruptcies were filed in 2012 than in 2011. About 69 percent of the bankruptcies filed in 2012 were chapter 7, which refers to the liquidation of assets and all non-exempt proceeds paid to creditors. Instead, more people filed in 2012 due to consumer debt. However, it took an average of 205 days, or seven to eight months, to settle chapter 7 bankruptcy cases in 2012. This is compared to the “normal” amount of time such cases are said to be settled, which is about three months. It is important to note that how long an individual case takes to settle depends on a variety of factors, including the amount of debt owed, whether creditors file complaints and so on.
About 70 percent of the 2011 bankruptcy filings were chapter 7 cases.
Chapter 13 Bankruptcy Filings
Some 31 percent of 2012 bankruptcy filings were chapter 13, compared to 30 percent in 2011. Chapter 13 bankruptcy is filed when an individual has a steady income but needs time to pay off debts. The person usually has about three years to pay all or most of debts to creditors. It is also interesting to note that 30 percent of chapter 13 filers in 2012 had filed for bankruptcy before, specifically in the previous eight years.
What do you think about this dramatic decrease in bankruptcy filings within the past two years? Leave a comment and share your thoughts! For more information or for a bankruptcy attorney in Las Vegas, contact DeLuca and Associates today.