Bankruptcy filings have increased by 14 percent in 2010

It has been reported that the number of bankruptcy filings in 2010 increased by around 14% compared to the previous year.

The total number of bankruptcy cases filed in federal courts from October 1, 2009 to September 30, 2010 reached 1,596,355. This figure is 13.8% higher than total bankruptcy filings in fiscal year 2009, which stood at 1,402,816.

Administrative officials at U.S. courts confirmed that non-business bankruptcy filings during the 12-month period from October 1, 2009 to September 30, 2010 increased from 1,344,095 to 1,538,033—a 14.4% increase.

This represented the highest annual number of non-business consumer bankruptcy filings since 2005, prior to the implementation of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) in October 2005.

In contrast to personal filings, business bankruptcy cases dropped slightly by 0.7% compared to the prior year. Business bankruptcies are typically filed by commercial entities seeking reorganization or liquidation under federal bankruptcy codes.

While 58,721 business bankruptcy cases were filed in 2009, that number decreased to 58,322 in 2010. This modest drop suggested early signs of stabilization in corporate sectors following the 2008 financial crisis.

Here is a breakdown of 2010 bankruptcy filings organized by federal court chapter:

During the final quarter of fiscal year 2010 (July 1 to September 30), total bankruptcy filings reached 412,380.

This quarterly figure represented a 6.2% increase compared to the 388,485 cases filed during the fourth quarter of fiscal year 2009.

While bankruptcy offers a legal path toward debt relief, it also carries long-term consequences for your credit profile, remaining on credit reports for up to 7 to 10 years.

Before making a final decision to file for bankruptcy, consumers are strongly encouraged to explore non-bankruptcy alternatives—such as debt consolidation programs, debt settlement negotiations, or non-profit credit counseling.