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Chapter 7, Chapter 13 consumer bankruptcies up again in 2010

On Behalf of | Feb 15, 2011 | Bankruptcy, Firm News

According to bankruptcy statistics compiled by the Administrative Office of the U.S. Courts, the number of Chapter 7 and Chapter 13 personal bankruptcy filings rose again in 2010. This marks the fifth straight year that bankruptcy filings by individuals have increased, a trend that continues to throw into question the effectiveness of the 2005 bankruptcy law intended to make filing bankruptcy more difficult for consumers.

The total number of bankruptcy cases filed with the courts rose to 1.59 million for the period ending December 31, 2010, an increase of more than 8 percent over the 2009 total. However, the source of the continuing increases was clearly consumer bankruptcy. Total filings by individuals rose by almost 9 percent in calendar year 2010, while business bankruptcies actually declined.

Continued unemployment blamed for rise in personal bankruptcy filings

According to the government’s data, there were 1,536,799 consumer bankruptcies filed last year. During that period, the average nationwide unemployment rate stayed above 9 percent.

Meanwhile, as the mild economic recovery began, credit became more available to businesses. This is the likely reason for the drop in business bankruptcies, as the rate of business bankruptcies peaked around 2006, when credit was tightest. A total of 56,282 business bankruptcies were filed in calendar year 2010, a decline of 7 percent over 2009.

Chapter 7 (business and individual) filings increased by slightly more than 8 percent in 2010. Chapter 13 filings, which are mostly for consumers, went up by a little less than 8 percent. Chapter 11 business reorganization plans were down by nearly 10 percent.

While it is certainly troubling that personal bankruptcy continues to skyrocket, the pace of year-over-year increases slowed down a bit in 2010. For example, Chapter 7 filings rose 41 percent between 2008 and 2009, but only 8.4 percent between 2009 and 2010.


  • Administrative Office of the U.S. Courts news release, “Growth in Bankruptcy Filings Slows In Calendar Year 2010,” February 15, 2011
  • Westlaw News & Insight, “Bankruptcies by individuals in U.S. up 9 percent in 2010,” Tom Hals, February 15, 2011

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