Bankruptcy and Foreclosure In The News

Bankruptcy Filings Jump to New High

The rush of indebted consumers to file bankruptcy before a tough new law took effect pushed personal filings for 2005 to their highest annual level on record – more than 2 million.

Significant increases in consumer bankruptcy filings occurred in every region, up 31.6 percent from 2004 – meaning that one in every 53 households filed bankruptcy petitions, according to Lundquist Consulting Inc., a financial research outfit based in Burlingame, CA.

The new law took effect October 17, 2005 and brings the most sweeping overhaul of the U.S. Bankruptcy Code in a generation and makes it harder to erase debts in bankruptcy.

Foreclosure Activity Up

California sees 27% increase, Texas 61% increase.

Residential foreclosure activity across the nation reached its’ highest level during December 2005, an indication that rising interest rates were having an impact. 81,290 properties nationwide entered some stage of foreclosure, up 13.5% from November, said RealtyTrac. That’s one new incident for every 1,422 U.S. households, the highest foreclosure rate reported last year.

Texas accounted for more than 15% of the nation’s new foreclosures, with 12,753 properties entering some stage of foreclosure, one for every 631 households. California reported 7,674 properties entering some stage of foreclosure, one for every 1,592 households.

With prices at record levels in many areas and interest rates expected to move up, foreclosure activity will like increase this year, said an analyst fro DataQuick Information Systems.