In a very telling example of how Americans fared throughout 2009 as many sought to consolidate debt amid the Great Recession, consumers’ bankruptcies soared to their highest rate since 2005.
According to data filed by both the American Bankruptcy Institute, consumer bankruptcies totaled 1.4 million by the end of 2009. The figure was noticeably higher than the 1.06 million bankruptcies counted by the institute in 2008.
The rise in bankruptcies also marked the fourth consecutive year that the figure has increased since the Abuse Prevention and Consumer Protection Act was enacted in 2005.
“A combination of economic stress, including high debt loads, rising unemployment and unsustainable mortgage burdens, left many consumers with little choice but to seek the financial relief of bankruptcy,” said ABI Executive Director Samuel J. Gerdano. “As these strains continue for U.S. households, we expect that consumer filings will rise still higher in 2010.”
According to CrediCards.com, the state with the highest per-capita rate of bankruptcy filings in 2009 was Nevada, which had more than 11 filings out of every 1,000 residents. Tennessee came in a distant second with more than 8 filings per 1,000.
Arizona saw the greatest increase in bankruptcy filings from year-to-year, as their figure spiked up by 77 percent from 2008 to 2009.