FOR IMMEDIATE RELEASE
Editorial Contact:
Aglaia Pikounis
The Warren Group
(617) 896-5370
apikounis@thewarrengroup.com
Bay State’s Chapter 7 Bankruptcy Filings Climb In First Quarter;
But Fewer Consumers Seek Chapter 13 Protection
BOSTON, April 16, 2009 –Chapter 7 bankruptcy filings in Massachusetts jumped 16 percent in the first quarter compared to the same period last year, according to The Warren Group, publisher of Banker & Tradesman.
There were 3,285 filings under Chapter 7 of the U.S. bankruptcy code in the first three months of 2009, up from 2,833 during the first quarter of 2008. The filings were also 7 percent higher than the fourth quarter of 2008, when 3,072 filers sought Chapter 7 protection.
“The recession is taking a toll on consumers who have had their incomes slashed but still face piles of unpaid bills. Sadly, more and more people are attempting to wipe away their debt through bankruptcy,” said Timothy M. Warren Jr., CEO of The Warren Group.
Chapter 7 filings fell dramatically in 2006 after a federal law went into effect that tightened the requirements for filing for Chapter 7 bankruptcy protection. But filings have started to escalate again, steadily increasing for the past three quarters.
Chapter 7 bankruptcy, the most common option for individuals who want relief from their debts, accounted for 82 percent of bankruptcy filings in Massachusetts in the first quarter, according to The Warren Group. People filing under Chapter 7 bankruptcy can eliminate most debt after non-exempt assets are used to pay off creditors.
Meanwhile, filings under Chapter 13 of the U.S. bankruptcy code have declined. A total of 675 filers sought protection under Chapter 13 in the first quarter, down 39 percent from 1,106 in during the same months in 2008 and 14 percent lower than the 788 filings in the fourth quarter.
Chapter 13 requires debtors to arrange for a three- or five-year debt-repayment plan. Unlike Chapter 7 filings, Chapter 13 filings have decreased in the last four quarters.
Data for every county in the state is available to members of the media by request.
About The Warren Group
The Warren Group, based in Boston, is the publisher of Banker & Tradesman, The Commercial Record and a series of association publications. As the premier provider of real estate data in New England, The Warren Group offers a range of real estate products and services for professionals and consumers searching for real estate and financial information. For more information about The Warren Group, please visit www.thewarrengroup.com or call 617-428-5100.