Bankruptcies Soar -- But Not For Businesses

WILMINGTON, Delaware - Bankruptcies rose 13.8 percent in the year to September 30 but business filings fell for the first time since the start of the most recent recession, according to government data on Monday.

Business filings fell 0.7 percent as the economy strengthened and lending picked up, according to a report from the Administrative Office of the U.S. Courts.

However, at 58,322 the number of business filings is still double the level in 2007 just as the U.S. was sliding into its deepest recession since the Great Depression of the 1930s.

Personal bankruptcies continued to climb during the government's fiscal year, rising 14.4 percent to 1.54 million, which is the highest since a change in the laws led to a rush by individuals to file for bankruptcy in 2005.

(Reporting by Tom Hals; Editing by Phil Berlowitz)

Copyright 2010 Thomson Reuters. Click for Restrictions.

Comments

[Ross Schuman]

01:05 PM on 11/10/2010

Federal Bankruptcy courts have to determine who the real creditor on a mortgage is, providing you have prepared your well. The state courts are still letting the financial institutions and trusts play games with the derivatives. The mortgage ownership to the financial institutions is breaking down in federal Bk court. This is awful, but suggests why with Attorney Generals are having some problems with the classes action suits for mortgage lenders.

[USNDC]

08:59 AM on 11/10/2010

Welcome to Barack Obama's America !

Unemployment ... foreclosure ... and bankruptcy.

Smartest President ever ... so they say.

[thepill]

10:27 AM on 11/10/2010

Where is the "Facile, snarky, and utterly unfounded" flag?

[thepill]

11:04 AM on 11/10/2010

Never mind, I found it ... right next to the "Bitter, small-minded, and dumb." flag.

[Yam716]

12:42 PM on 11/10/2010

Don't forget, when eh got elected, America was already dealing with "
Unemployment ... foreclosure ... and bankruptcy"...

[themuse]

10:46 PM on 11/09/2010

If money is the life-blood of the economy, we could say that the general population, small businesses, and the workforce represent the limbs and certain organs. Government represents the vital organs and brain, while Wall Street makes up the pleasure centers, such as the male erectile organ.

Thus, we can analyze the current economic system in terms of a living organism. Currently, the male erectile organ, Wall Street, has a raging hard-on that won't quit. Our life-blood is flowing into the organ, but there is little flowing back into the system. Thus, the rest of the body is dying from lack of nutrients.

The conservative solution is to cut off the blood flow to the limbs because there is not enough remaining in the general body to supply both limbs and organs. In addition, they feel that we also need to reduce the functionality of vital organs and reduce the size of the brain (reduce government employment and services) so as to leave more life-blood for the erectile organ. And because the raging hard-on is so important to the wealthy elite, any talk of changing the flow so as to redistribute it throughout the body is off the table. In fact, conservatives seem to think that the best solution to the economy is a shot of viagra (tax breaks for the wealthy).

[Kevin Atlanta]

07:14 PM on 11/09/2010

Life's a peach and then you stick the Banksters with the $104,200.00 piece of the national debt that they put on you in the socialize the loss and privatize the profits Heist of History.

[texadonkey]

06:07 PM on 11/09/2010

Dan Patrick from Texas, filed for bankruptcy. Now he's a radio host, and a poltician. How wonderful for some to bounce back. The rest of us are screwed.

[mcmutter]

04:41 PM on 11/09/2010

Consumers have zero power in a GOP world .... so just bend over and lube up if you're declaring bankruptcy ....

[rory talbot]

04:31 PM on 11/09/2010

The GOP made it so difficult to file BK. They dramatically changed the rules. Now, the federal government is in the "churning" business, where debtors are put on endless treadmills, never having any realistic chance of getting caught up.

[PCMartin]

09:03 PM on 11/09/2010

Yup -- "fresh starts" are now only for big corporations looking to break collective bargaining agreements and dump pension obligations. I'm sad to say that both of my "liberal" Democratic senators voted for the 2005 Bankruptcy Reform Act and won't give me a straight answer as to why. In the absence of a policy explanation, I have to look at their campaign finance records and simply follow the money. Then the answer becomes clear. Well, at least they're both "liberal" when big money isn't involved...

[USNDC]

09:06 AM on 11/10/2010

... "forgive us our debts as we forgive our debtors."

What ? ... are you crazy ? ... now change those words right now.

... "forgive us our trespasses as we forgive those who trespass against us."

Better than that forgiving debt business ... are you crazy !?

[MrJoyboy]

04:22 PM on 11/09/2010

Republicans are hazardous to your bank account.

[GregHooper]

07:27 AM on 11/10/2010

Just for the record there are plenty of Dems who voted for the Bankruptcy Reform Act When I saw it pass I looked at a friend of mine and said

Now watch this they are going to ease up on credit so anyone can get a card or loan because the idea is to lock you in as a sharecropper for life

I hate it when I'm right

[Jennifer Mead]

04:18 PM on 11/09/2010

We the businesses, for the businesses by the businesses. Need I say more?

[grlbhvingbadly]

04:03 PM on 11/09/2010

Pretty soon some lobbyist for some corporation will amend the bankruptcy laws to make it more difficult for the common person to file. And by that time we will probably have debtor's prisons as well.

[johnmleczko]

04:25 PM on 11/09/2010

The Banks and Lobbyists had their way already with the Bankruptcy Law revision of 2005 especially in the Chapter 13 revisions. It can only get worse now with the Republican wins in the Mid Term election. What we really need is Mortgage Mod Cram-Downs in Chapter 13.
Do you think the politicians of both parties will bite the hand that feeds their election campaign coffers????? A pox on both their Houses!

[Mat Biscan]

03:44 PM on 11/09/2010

I've been unemployed twice in my life. Getting a job is easier said than done, now more than ever. I've almost gone into bankruptcy once due to the overwhelming debt I racked up being unemployed. I wasn't going out and buying cars or mortgages... I was buying canned food so I could continue to live.

Let me tell you this, $800 a month from unemployment is not much to pay all your bills and eat canned food. Rent is at least half that. The last thing I thought about was how cushy my life was living on the dole. Republicans voted against extending unemployment benefits because... I don't know, they believe that welfare queens exist? There might be a few lazy people out there living off welfare, but they're throwing the baby out with the bathwater.

[Pamela Grundy]

04:26 PM on 11/09/2010

Hnag in there. It took me two years to get another job after I left my bank job in 2008. (I had a heart attack at my desk, but the bank failed anyway three months later.) The job I just found is minimum wage, at the mall, for Christmas.

I think that more jobs are cropping up now but they're very low paid. I'm making about a quarter of what I made eight years ago, and it's not like I was getting rich even then... but it's better than nothing. I think most of us will be living on much, much less. Good thing I know how to cook starch.

[Mat Biscan]

04:32 PM on 11/09/2010

Sorry, I didn't mean to make it sound like I am unemployed that the moment. It's been about eight years since I was unemployed. I now enjoy being a small business owner. I have not felt the pain of the recent financial crisis, but I definitely felt similar pain in 1999 and 2003 and have not forgotten what it's like to be unemployed.

[Larry Motuz]

05:16 PM on 11/09/2010

They do not believe in protecting the 'baby' unless it's a fetus.

[barkrudedog69]

03:31 PM on 11/09/2010

Bankruptcy when done properly is a great thing....the Dems and Republicans should have worked together to allow Judges to cram home loans...and this whole foreclosure mess would have been just about over....

[USNDC]

03:49 PM on 11/09/2010

Agreed ... but Barack Obama wouldn't support Senator Dick Durbin's (D-Illinois) Bankruptcy Cramdown Bill ... so I blame Obama.

[Villagesviewpoint]

04:11 PM on 11/09/2010

Sen. Durbins bill was crap, and didn't deserve the light of day.

And who was expecting the bi-partisan co-operation to happen & when?

They have all known that this was coming down the pike, and they sat on their hands while looking for some to blame, like our buddy USNDC.

[Jennifer Mead]

04:19 PM on 11/09/2010

That would not succeed in bilking the middle class. Get with the program!

[kewps]

02:56 PM on 11/09/2010

Yep-I'm about ready to file chapter 7 myself after 3+ years of unemployment.

[piper26]

02:43 PM on 11/09/2010

No doubt Congress will resolve the problem by making it even MORE difficult for an individual to file. That'll teach us a lesson for being unemployed, broke, and unable to pay our bills :(

[houston we have aproblem]

03:54 PM on 11/09/2010

meanwhile large corporations and business can erase their monstrous debts through restructuring easily, and do it regularly

[disgustedwithall]

02:21 PM on 11/09/2010

Want to read of the mass destruction of small business, read CH11 p547c that rapes small business. Works this way, Company contacts, contracts you for services, etc, do NOT tell you they are in "Federal Restructuring" or planning CH11. They are run by Fed Ct appointed "Trustee". They pay you for serivces, goods, and then file CH11 within 90 days of payment. Up to TWO years later, they now have "Creditors" (huge billion dollar investment firms) that got into it, closed all plants, fired workers, canceled retirements, etc AND of course set up lawyers, CEO's etc in very cushy stock options-salaries. Then TWO years later do "Batch file" 500- 1000 small companies are ORDERED by Bankruptcy CT, via 547c to pay back ALL they were paid for their services, plus costs. www types most vulnerable as can be 1000's of miles away from "CT", but are hammered by legions of "Debtor Lawyers" sucking the thing dry.

We know of med sized furniture company in ST Louis that went 11, closed all plants, laid off all workers, set up China imports, then "batch filed" on 600+ firms via 547C. The smaller business had zero chance, shame is the firm hired "expert on CH11 CFO" prior to filing, set up the small business's as KNEW that any money paid out would come back.
Horror not one media will look into such things, congress paid off to pass it. Small business rolled over by the hundreds as cannot afford $10-30K lawyers.