Bankruptcy Filings Surge to 1 Million, Up 29%

NEW YORK -- Bankruptcy filings surged 29 percent in the 12 months that ended June 30, according to government figures released Wednesday, according to CNN.com.

Total filings rose to 967,831 from 751,056 a year earlier, CNN.com reported.

Business filings jumped more than 41 percent to 33,822 from 23,889 in the year-ago period. Personal filings totaled 934,009, up 28 percent from last year.

The data also showed that filings for Chapter 7 rose 36 percent to 615,748 in the 12 months that ended June 30, CNN.com said.

Chapter 7 bankruptcy is designed to give individual debtors a "fresh start" by discharging many of their debts, CNN.com reported. Under Chapter 7 a filer's assets minus those exempted by his home state are liquidated and given to creditors first in line for repayment, while the rest of his debts are cancelled.

Another type of individual bankruptcy, Chapter 13, requires debtors to pay back their debts over time, CNN.com said. Total Chapter 13 filings rose 17 percent to 344,421 from 294,693 a year earlier.

Filings for Chapter 11 bankruptcy, which is aimed at assisting struggling corporations or partnerships, rose more than 30 percent to 7,293, CNN.com said.

-- NYSSCPA.org News Staff

Posted on 8/28/08