With the ongoing economic struggles across the country, it perhaps comes as no surprise that bankruptcy rates across the country remain high. According to a report by the American Bankruptcy Institute and the National Bankruptcy Research Center, nationwide approximately 1.53 million people filed for bankruptcy protection, up from about 1.41 million people in 2009. This is the highest number of filings since major reforms to the bankruptcy laws in 2005.
In Arizona the statewide trends mimic the national trends. According to The Arizona Republic, 41,579 people in Arizona filed for bankruptcy in 2010. The first 11 months of 2010 nearly matched the total filings in 2009, 39,204. The 2010 Arizona bankruptcy filings set an all-time state record.
Why the Record Numbers?
The causes are numerous. According to the U.S. Bureau of Labor Statistics, 9.3 percent of people in Arizona are unemployed. Long-term unemployment can cause unanticipated financial hardship, and many become unable to meet their outstanding financial obligations. The credit markets have tightened, which can lead to an increase in bankruptcy filings when people are unable to rely on credit through difficult times. The housing market in Arizona remains soft, and many people owe more on their mortgages than their homes are worth.
An Improved Outlook for 2011
Hopefully, the new year will bring an improved economy, which in turn may lead to fewer bankruptcy filings. For those who continue to struggle financially, though, it is important to remember that the bankruptcy process may be the best option. Filing for bankruptcy is not a sign of irresponsibility; it is a tool the U.S. government offers to protect those who are overwhelmed with financial difficulties.
If you have questions about bankruptcy and live in the Tucson area, contact a knowledgeable Pima County bankruptcy attorney to discuss your options.
