Law Office of Judith A. Descalso Law Office of Judith A. Descalso

How many people file for bankruptcy, and why?

Our Escondido readers know that filing for bankruptcy is one of the most efficient ways to address overwhelming debts of all kinds. Each year thousands of California residents file for personal bankruptcy and most of them are able to get out from under a crushing debt burden. But how common is filing for bankruptcy nationwide?

Well, according to statistics kept by the United States Bankruptcy Courts, in the year 2013 - the most recent year statistics are available for - approximately 1 million bankruptcy petitions were filed by Americans who were attempting to deal with consumer debt. Despite the high rate, this number actually represented a decrease in the number of filings from 2012 - down about 12 percent.

The vast majority of these filings were under Chapter 7 bankruptcy - about 68 percent. As many of our readers already know, Chapter 7 bankruptcy is known as "liquidation" bankruptcy, in that the filer's non-exempt assets are listed and sold, with the proceeds applied toward satisfying debts.

Of course, in most cases there are no non-exempt assets to be sold. Lastly, on average, in 2013 a Chapter 7 bankruptcy case took about 212 days to wrap up from the date of filing to the date of final disposition.

Although the annual statistics for bankruptcy filings change each year, the fact remains that millions of Americans have taken advantage of the protection and financial finality that bankruptcy can provide. For an Escondido resident dealing with thousands of dollars in credit card or other types of debts, a bankruptcy filing could be the right approach.

Source: www.uscourts.gov, "2013 BAPCPA Report," Accessed March 8, 2015

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