Bankruptcy filings in Fresno are down significantly. There were 732 Chapter 7 filings for the first six months of 2006, compared with 4704 for the same period in 2005, a drop of 84.4%. Chapter 13 filings were also down, although not as much. There were 222 filings in the first six months of 2006, compared with 539 a year ago, a drop of “only” 58.8%. Click here for the detailed statistics.
Of course, the main reason for the precipitous drop in filings is that most people who were thinking about bankruptcy filed before the new law went into effect on October 17, 2005. The other reasons for lower filing numbers are: (1) misinformation regarding the availability of bankruptcy after the new law went into effect, (2) higher attorney fees necessitated by the increased work for attorneys under the new law means that people have a harder time affording a bankruptcy filing, and (3) the new law has made it harder for some people to file.
It appears that the new law may have succeeded in accomplishing exactly what the credit card industry hoped for. If they can get debtors to pay for even a few more months than they would have under the old law, the credit card industry could reap billions in additional profits. And it looks like that is coming to pass.
It is important to remember that bankruptcy is still an option and most people will still be able to file under the new law, although everyone has to jump through a few more hoops to do so now. Click here to see other common bankruptcy myths debunked.