According to a recent New York Times Article, the country’s recent economic downturn is leading to a growing number of bankruptcies. The big issue, however, is that many of the consumers filing bankruptcy today have much larger debt than those in previous years. The number of bankruptcy filings jumped nearly 8 percent in October from the month before.

As the New York Times reported from interviews with various bankruptcy lawyers, “not only are the filings up, but recent filers have much more credit card debt, often run

up in an attempt to keep paying a mortgage that now exceeds the value of their home.”

As for the legal implications of this trend, I expect we may see an increase of debtors to opt into Chapter 13 as opposed to Chapter 7 bankruptcy in an attempt for debtors to keep their homes. While Chapter 7 filings stop foreclosure proceedings, the break is usually only temporary. As a practical matter, many homeowners who file under Chapter 7 lose their homes. In contrast, Chapter 13 stays foreclosure proceedings for up to 3 to 5 years while homeowners try to work out a repayment plan with his or her creditors.

If you or anyone you know is considering filing for Chapter 7 Bankruptcy, please call us at (512) 343-2572 so that we can inform you of your options and send you a free report about Chapter 7 Bankruptcy.

Economic Downturn Leading to More Bankruptcy Filings is a post from: Austin Bankruptcy Lawyer