The good news is that Alabama had nearly 2,500 fewer bankruptcy filings in 2012 than in 2011. When filings under Chapter 7 and the rest of the bankruptcy code were tabulated, statewide personal and business bankruptcy filings dropped from 30,000 to 27,500. Furthermore, there were over 200,000 fewer filings nationwide in 2012 than over the previous year.
The statistics released by the American Bankruptcy Institute generally reflect positive news across the country. Unfortunately, however, there were still some discouraging reports regarding the overall financial picture for Alabama. While the number of people filing for bankruptcy dipped under four per 1,000 in the United States, in our state the figure was nearly six per 1,000. That is the fourth worst of all 50 states and may reflect continuing problems for many Alabama families.
Nevertheless, estimates suggest that filings will continue to drop in 2013. This positive news is attributed to continued low interest rates, paired with reductions in credit card debt and home mortgage balances. The fact that consumers appear to be spending less is likely connected to the numbers showing that fewer families have felt the need to seek the protection of a bankruptcy court.
Despite the encouraging reports, there are still individuals and families struggling to make ends meet in Alabama. As such, financially distressed individuals and families can seek the protections offered by Chapter 7 liquidation and Chapter 13 debt reorganization. It is discomforting to constantly worry about the roof over one's head or whether there is enough money to put food on the table. Fortunately, our laws offer relief to those that need it so they can confront their debts in a responsible fashion and begin to plan for a return to financial stability.
Source: Birmingham Business Journal, "Alabama bankruptcies down in 2012, but state has fourth highest per capita filing rate nationwide," Antrenise Cole, Jan. 29, 2013
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