Connecticut bankruptcy filings rose 19.7 percent in the first six months of this year, more evidence of the struggle individuals and business are having in this economy, according to a Boston data analyst.
A total of 5,593 filers statewide sought protection under Chapter 7, Chapter 13 and Chapter 11 of the U.S. bankruptcy code in the first two quarters, up from 4,673 a year earlier, according to The Warren Group. Filings also climbed 6.5 percent from the previous two quarters, when there were 5,250.
“Bankruptcy filings are considered a lagging indicator, and these bankruptcy filings really reflect earlier economic conditions,” said CEO Timothy Warren Jr. “Many people struggle to hold on for as long as they can before seeking bankruptcy protection, but even though the economy is recovering, consumers are still hurting and struggling to pay off the debt they’ve accrued over the years.”
Chapter 7 filings are most common avenue for debt relief sought by individuals and businesses, accounting for 89 percent of all bankruptcy filings tracked by The Warren Group from January through June. Chapter 7 bankruptcy filings totaled 4,968 in the first six months of 2010, a 23.8 percent increase from 4,014 during the same months last year.
People filing under Chapter 7 bankruptcy can eliminate most debt after non-exempt assets are used to pay off creditors. In contrast, Chapter 13 requires debtors to arrange for a three- or five-year debt-repayment plan.
Chapter 13 filings fell 7.2 percent to 551 in the first half of the year from 594 last year and were unchanged from the previous two quarters.
