Both consumer and corporate bankruptcy filings are at their lowest point in 10 years, according to a new report by Supreme Court Chief Justice John Roberts. The number of new filings has been cut by more than half since 2010, reports Marketwatch. The numbers show there were nearly 1.6 million filings as of September 2010, with 1.53 million of those consumer bankruptcies. In September 2018, there were more than 770,000 bankruptcy filings, with 97% of those on behalf of consumers. Roberts’ report shows that bankruptcy filings haven’t been this low since 2007. Marketwatch has more on why the falling number of bankruptcy filings might not be the good news you might expect.
There are many roads that lead to bankruptcy, but ProPublica has been exploring how unpaid parking tickets and automated traffic camera tickets can quickly spiral out of control for the working poor in Chicago. Eager to file bankruptcy to be rid of the burden of unpaid tickets, doing so isn’t always the best solution, because it can lead to some being in worse financial shape. Read some of the personal stories of those who have struggled with mounting debt and bankruptcy at ProPublica.
Do blacks who file bankruptcy fare as well as whites who do? Not necessarily, according to a report by The Atlantic and ProPublica. Black Americans are “far less likely” than white Americans to have their debts successfully erased — to the benefit of a network of attorneys. The Atlantic has a podcast on the issue, and ProPublica has reporting, as well.
When deciding to file personal bankruptcy, choosing the right chapter is critically important. Is a chapter 7 better for you, or a chapter 13? ProPublica takes a look at the differences between the two types and offers advice for those trying to decide.
If Congress repeals Obamacare without a replacement, leaving millions without healthcare, some expect a rise in the number of bankruptcies. The number of uninsured is predicted to rise between 10 and 30 million people, depending on whether repeal or repeal and replace passes. For those struggling with medical bills already, losing insurance coverage would drive more people into bankruptcy, experts believe. Read more about the dilemma at The Atlantic.
Truck drivers in New Jersey won a Supreme Court victory Wednesday after the justices ruled that bankruptcy courts can’t allow certain creditors to jump ahead in the repayment line while leaving others empty handed. The trucking company, Jevic Holding Corp., used a technique called “structured dismissal” to make sure lawyers who worked on its Chapter 11 case were paid when truck drivers with the same priority didn’t. Kevin Lessmiller has details in this story from Courthouse News.
Last week, Judge Dennis Montali, presiding over the United States Bankruptcy Court for the Northern District of California, ruled that Bitcoin should be classified as “intangible personal property.”
In a decision made on Monday by the nation’s highest court, chapter 7 bankruptcy rules have been clarified regarding the inclusion of second mortgages in a debtor’s petition. The Supreme Court ruling (Docket number 13-1421), brought by Bank of America against two Florida homeowners, states that a second mortgage cannot be cancelled in a chapter 7 bankruptcy. The homeowners’ cases argued that since a second mortgage is paid off before the primary mortgage, and that their properties are not worth the value of the primary mortgage amount, that the second mortgage is then valueless.
The two homeowners at the center of the case had each had their second mortgages from Bank of America cancelled in the 11th United States Circuit Court of Appeals. Bank of America appealed the decision and the case found its way to the Supreme Court where the determination was made.
The effects from Monday’s ruling will certainly be seen all over the country as homeowners, looking for financial relief, turn toward chapter 7 as a way to get them back on their financial feet.
Last year, more than 700,000 individuals and couples filed for chapter 7 bankruptcy, the most popular type of consumer bankruptcy, which enables a court-appointed trustee to sell a person’s property to repay debts and then cancel the rest.
Monday’s ruling further clarifies a 1992 ruling from the Supreme Court regarding first mortgages that are “underwater”. The 1992 determination stated that bankrupt homeowners cannot have the lien cancelled under chapter 7 bankruptcy but did not address second mortgages. The last major bankruptcy code overhaul took place in 1978 when second mortgages were much less common.
Source: The Wall Street Journal