Bankruptcy Trends

Bankruptcy Trends

Bankruptcy Trends

An observant Indianapolis bankruptcy attorney keeps a close eye on things that are going on in and around the area that he or she practices in. Doing so will help the Indianapolis bankruptcy attorney predict what types of bankruptcy law will be more prominent at a given period of time and to subsequently prepare accordingly. For example, an Indianapolis bankruptcy attorney who closely follows the bankruptcy trends of the state would find that the residents of the state of Indiana rely primarily on chapter 7 bankruptcy protection. Chapter 7 is more lenient than a chapter 13 because of the flexibility it offers to escape the obligation to repay one's debt. Chapter 13 requires repayment of one's debt usually over the course of a three to five year time period. Over the last three years, chapter 7 filings have become increasingly more popular than chapter 13s. In 2007, when there were approximately 30,000 bankruptcy filings in Indiana, about 68% where chapter 7 while the other 32% were chapter 13. In 2008, there were almost 38,000 total bankruptcy filings and 71% were chapter 7 filings while the other 29% accounted for the chapter 13 filings. So far in 2009 though, with almost 36,000 bankruptcy filings, 74% of those filers elected a chapter 7 while only 26% went for a chapter 13 instead. These are not even the final compiled numbers for 2009 so these numbers are likely to grow and continue climbing in the same direction that they have been growing. The fact that such a large percentage of people are able to qualify for a chapter 7 personal bankruptcy filing is astounding in and of itself. This is because the new federal bankruptcy guidelines of 2005 entitled the Bankruptcy Abuse Prevention Consumer Protection Act theoretically made it harder for individuals to qualify for chapter 7.

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