Consumer Bankruptcy Filings at Highest Level Since 2005

Consumer bankruptcy filings reached their highest point since 2005 in the first half of this year.

Through the first six months of 2010, consumer bankruptcy filings increased to 770,117 — 14% more than filings made over the same period last year, the American Bankruptcy Institute said. This marks the largest number of filings since the Bankruptcy Abuse Prevention and Consumer Protection Act was enacted to curb the increase in filings five years ago.

Month-to-month, June figures indicate a decline for the third consecutive month. Bankruptcy filings totaled 127,000 last month, down more than 7% from May. The number of June 2010 filings, however, was more than 8% higher than last year, based on data compiled by the National Bankruptcy Research Center.

ABI expects another 1.6 million bankruptcy filings by the end of the year, Executive Director Samuel J. Gerdano said in a statement Friday.

The southwestern and southeastern regions of the country saw the highest filing rates. Adjusting for households located in the state, Nevada, which has the highest unemployment rate in the country, had more than double the national filing rate — 15,000 filings per million households, compared to the national average of 6,800 filings per million households, according to a report by Ronald Mann, a professor at Columbia Law School. Alaska, Washington, D.C. and South Carolina had the lowest filing rates — less than 40% of the national average.

Changes in filing rates varied state to state. While most states are seeing increased filings, some southern states like Tennessee and Alabama have lower filing rates.