For 2009 so far, bankruptcy filings are skyrocketing. In August, filings were up 22% year-over-year, and Nevada has become taken the dubious honor of leading the nation in bankruptcies (Tennessee is #2).
More than 950,000 bankruptcy filings have occurred this year, compared to slightly over 700,000 last year. By December, it could come close to 1.5 million.
This year's surge in bankruptcy filings comes after a slowdown following a 2005 bankruptcy reform law that made the process tougher on filers and providing creditors with some protection. Yet, the plunge in home values and increase in underwater mortgages has triggered the new trend.
With unemployment continuing to rise, it seems that more bankruptcy filings will follow. Put simply: losing your job exacerbates any financial challenge. So, with the unemployment rate already at 9.7% -- and expected to reach 10.3% next year -- this situation is far from over. This is yet another way in which the current financial crisis will find ways to stick around for a very long time.
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