The U.S. Bankruptcy Court has released numbers for the first half of 2009 and Chapter 7 bankruptcy filings are up 102% in Maricopa County when compared with the same time period last year. Likewise, Chapter 13 filings are up 52% in the Valley when compared to 2008. Overall statewide bankruptcy filings in Arizona are up 88%.
While most consumers file either a Chapter 7 or Chapter 13 bankruptcy case, reports show that Chapter 11 filings have almost doubled since the beginning of last year. Traditionally Chapter 11 filings were for businesses that were seeking to reorganize, while Chapter 13 was an option for individuals seeking to reorganize. However, the Bankruptcy Code limits Chapter 13 filings to those debtors who have less than $1,010,650 in secured debts (like mortgages, car, loans, etc.) and less than $336,900 in unsecured debts (credit cards, medical bills, most judgments). See 11 U.S.C. § 109(e). Because of the Code limitations on a Chapter 13 filing as well as the fact that individuals are carrying heavy debt loads in the form of mortgage loans, investment loans, and deficiency judgments after a foreclosure, individuals are now seeking bankruptcy relief by filing a Chapter 11 case.
If you are facing financial difficulties or are carrying a high debt load and want to evaluate your options, JacksonWhite offers a free bankruptcy consultation to discuss your situation and help you determine if bankruptcy is an appropriate option.