The latest numbers for bankruptcy filings show a decline in the number of people taking advantage of the protection under bankruptcy laws to reorganize and liquidate debt. Bankruptcy filings are down 12 percent in Fiscal Year 2013 from Fiscal Year 2012 figures, according to statistics available from the Administrative Office of the U.S. Courts. Nationwide, FY 2012 bankruptcy cases came in at 1,261,140 while FY 2013 bankruptcy filings came in at 1,107,699. In Maryland, the drop in foreclosures is even larger, coming in at 15 percent, according to Belsky, Weinberg & Horowitz bankruptcy attorney, Tony Aquia.
The fiscal year ended September 30, 2013.
But, the downward trend in bankruptcy filings could soon see a reversal. The robo-signing crisis caused many lenders to stop foreclosing. “We believe that bankruptcies will increase as lenders are beginning to ramp up foreclosures,” Aquia said.
2010 and 2011 were peak years for the filing of consumer bankruptcies.
A breakdown for Maryland’s counties can be gleaned from the report. Prince George’s County, Maryland saw the highest number of total bankruptcies – 4561 – followed by Baltimore County, Baltimore City, Montgomery and Anne Arundel counties for FY 2013. Total bankruptcies include both consumer and business debtors.
In Prince George’s County, out of 4,220 total bankruptcies filed, 3,341 were Chapter 7, 30 were Chapter 11 and 849 were Chapter 13. In Baltimore City, FY 2013 filing numbers for total bankruptcies were 2753 Chapter 7 bankruptcies, 22 Chapter 11 bankruptcies and 629 Chapter 13 bankruptcies. In Baltimore County, out of 4,220 total bankruptcy filings, 3,341 were Chapter 7, 30 were Chapter 11 and 849 were Chapter 13.
Calendar year figures for 2012 provide a snapshot of consumer debtors, according to figures provided by the 2012 annual report required under the Bankruptcy Abuse Prevention and Consumer Protection Act . During calendar year 2012, 1.1 million bankruptcy petitions were filed by individuals with primarily consumer debt. Filers had a median average monthly income of $2,743. Most filed under Chapter 7. Approximately 69 percent of consumer bankruptcy petitions filed in 2012 were filed under Chapter 7, down from 70 percent in 2011. Repeat filers are up slightly. In 30 percent of the Chapter 13 cases filed during 2012, debors reported that they had filed for bankruptcy protectin during the previous eight years – 2 percent more than in 2011. Median monthly average income reported by all debtors was $2,743 – one percent lower than in 2011. Filers in the Northern District of California had the highest median average monthly income of $3,673. Median average monthly expenses was $2769. Filers in the U.S. Virgin Islands had the highest median average expenses with $4715.
Bankruptcy can stop a foreclosure in some, but not all instances. In a Chapter 13 bankruptcy filing, the foreclosure, repossession, garnishment, seizure or legal action is “stayed” or placed on hold and a court-approved payment reorganization plan is put into place to satisfy creditors.
Bankruptcy laws help people who can no longer pay their creditors to get a fresh start by liquidating assets under a Chapter 7 so as to eliminate debt or by restructuring payments under a Chapter 13 to amounts that the debtor can afford. Bankruptcy laws also protect troubled businesses and provide for payments to business creditors through reorganization or liquidation.
Belsky, Weinberg & Horowitz has represented consumers in mortgage, bankruptcy and debt collection cases for many years. Call our bankruptcy attorneys at 410-234-0100 or email us for a free consultation.