In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) became law in response to the rapid spike in individual consumer bankruptcies. The difficult economy of the early 2000s pushed many people into serious debt, and filing for bankruptcy was the best option available to them for long-term debt relief. However, it also created a situation in which bankruptcy fraud became more prevalent. To counteract this, the BAPCPA was passed, but since then, a lot has changed in the U.S. economy. If you’re considering filing for bankruptcy relief in Marshall, MN, Behm Law Group Ltd. can help you navigate the BAPCPA and other bankruptcy laws to build a strong, successful Chapter 7, Chapter 12, or Chapter 13 case.
After the BAPCPA was passed in 2005, the bankruptcy numbers changed dramatically. There was a decline in the number of Chapter 7 cases filed because the act created more strict requirements to qualify for Chapter 7 bankruptcy relief. From 2005 to 2017, 12.8 million consumer bankruptcies were filed, with an average of 68% Chapter 7 cases and 32% Chapter 13 cases. Even with the passage of the BAPCPA, the ratio of Chapter 7 to Chapter 13 is still high.
In 2008, the crashed economy sent more people into bankruptcy, and by 2010, the United States saw the highest filing of bankruptcy cases since before the passage of the BAPCPA. The total number of consumer bankruptcies filed in 2010 was 1,538,033 with 1,105,534 Chapter 7 cases and 430,583 Chapter 13 cases. By 2017, as the economy stabilized, the total of consumer bankruptcies was 767,721 with 61.50% Chapter 7 cases and 38.36% Chapter 13 cases. In comparison, the 2005 total of consumer bankruptcies was more than 2 million nationwide.
Georgia, Alabama, and Louisiana filed the highest percentage of consumer bankruptcies from 2006 to 2017, likely due in part to the devastation caused by Hurricane Katrina in 2005. Between 2006 and 2017, 92% of the 25 states contributing the most to the total of national consumer bankruptcies were southern states.
In 2011, however, California filers made up 17% of the national consumer bankruptcy filings. In contrast, Alaska had less than 1,000 filings that same year. In 2016, Alabama had as many as 1 in 112 households filing for Chapter 13 bankruptcy.
The most common causes of consumer bankruptcy reported in 2005 included medical bills and credit card debt as significant factors. Since then, the causes of bankruptcy have expanded in variety, including job loss, income reduction, unexpected expenses, and divorce. The average filer today is middle-aged, married, and making less than $30,000 a year.
The changes in bankruptcy statistics since the establishment of the BAPCPA in 2005 have manifested in many different ways, including rates of bankruptcy, types of bankruptcy, and circumstances of the filer.
To learn more about bankruptcy in Marshall, MN, contact Behm Law Group Ltd. at (507) 387-7200 or at stephen@mankatobankruptcy.com today.
