Bankruptcy filings surge to 1 million - up 29%
Number of bankruptcy filings in recent 12-month period rises to nearly 1 million.
By Ben Rooney, CNNMoney.com staff writer
Last Updated: August 27, 2008: 3:19 PM EDT
NEW YORK (CNNMoney.com) -- As things in the economy have gotten worse, the number of people and businesses heading to bankruptcy court has spiked.
Bankruptcy filings surged 29% in the 12 months that ended June 30, according to government figures released Wednesday.
Total filings rose to 967,831 from 751,056 a year earlier.
Business filings jumped more than 41% to 33,822 from 23,889 in the year-ago period. Personal filings totaled 934,009, up 28% from last year.
The data also showed that filings for Chapter 7 rose 36% to 615,748 in the 12 months that ended June 30.
Chapter 7 bankruptcy is designed to give individual debtors a "fresh start" by discharging many of their debts. 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. Total Chapter 13 filings rose 17% 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% to 7,293.
2005 law cracked down on filers
Filings for the three months ended June 30, meanwhile, saw the biggest jump since the last quarter of 2005, rising 31% over the same period last year.
money.cnn.com
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