Personal Bankruptcy Filings up 41 Percent Compared to Sept 2008

[Bill Hicks]

http://www.calculatedriskblog.com/2009/10/abi-personal-bankruptcy-filings-up-41.html

Let's keep that financial doom coming today.   


Consumer bankruptcies totaled 1,046,449 filings through the first nine months of 2009 (Jan. 1-Sept. 30), the first time since the 2005 bankruptcy overhaul that filings have surged past the 1 million mark during the first three calendar quarters of a year, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center (NBKRC). The filings for the first three-quarters of 2009 were the highest total since the 1,350,360 consumer filings through the first nine months of 2005.



I got your bankruptcy "overhaul" right HERE!   

[picasso moon]

Bankruptcies were made much harder after 2005, something the article doesn't mention.

[Bill Hicks]

Bankruptcies were made much harder after 2005, something the article doesn't mention.

That's really the point, but you're right it wasn't stated explicitly.  I think CR just assumes its readership already knows that.

[perdition79]

Expect bankruptcies to spike even more. Or at the very least, expect CPA's to be busier over the next couple years.

This year, the banks will be sending many more 1099-C forms to U.S. debtors whose debts were written down or discharged than they have in the past. The amount "forgiven" is considered taxable income.  I learned the details in my tax preparer class last night; it's detailed in IRS Publication 4681. A bankruptcy filing or the defensible completion of an insolvency worksheet in that publication can be used to keep such amounts from being considered taxable income. Should be fun; the debtor or the Federal government, not the bank, will be left holding the bag. Only way this news could be worse is if money were real. 

[Doomerific]

Bankruptcies were made much harder after 2005, something the article doesn't mention.

It's right there in the graph!   

[cz]

Expect bankruptcies to spike even more. Or at the very least, expect CPA's to be busier over the next couple years.

This year, the banks will be sending many more 1099-C forms to U.S. debtors whose debts were written down or discharged than they have in the past. The amount "forgiven" is considered taxable income.  I learned the details in my tax preparer class last night; it's detailed in IRS Publication 4681. A bankruptcy filing or the defensible completion of an insolvency worksheet in that publication can be used to keep such amounts from being considered taxable income. Should be fun; the debtor or the Federal government, not the bank, will be left holding the bag. Only way this news could be worse is if money were real. 

Yeah I'd really like to see what the IRS does with that - because unemployed people who's written down debt is considered taxable will then have IRS bills they can't pay...  and well, then they can "negotiate" with the IRS to settle it, but then - if you have no money not many options there either other than bankruptcy?  And the IRS then would be the "creditor" being screwed.

[Involuntary Simplicity]

I imagine there are a lot of Americans who were forced into a Chapter 13 bankruptcy that are no longer able to make payments, due to job losses....

[cz]

I imagine there are a lot of Americans who were forced into a Chapter 13 bankruptcy that are no longer able to make payments, due to job losses....

But don't worry, everything will be fine - we're in "recovery" dont'cha know, the government and media economists say so, it must be so!