Consumer Bankruptcies Hit Two Million In 2005

Law360, New York (January 11, 2006, 12:00 AM EST) -- More than two million consumers filed for bankruptcy last year, rushing to gain protection from creditors before new, stricter bankruptcy laws took effect last October.

Bankruptcy filings reached 2.04 million in 2005, up 31.6% from 2004, in which 1.55 million consumers filed for bankruptcy. In 2005, 1 in every 53 households sought court protection from creditors under federal bankruptcy chapters.

Chapter 7 filings jumped 47.2%, while Chapter 13 filings dropped 7.9%.

Experts attribute the spike in filings to the Bankruptcy Abuse Prevention and Consumer Protection Act,...
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