According to a new report, many people have turned to bankruptcy in order to deal with their debt problems.
Bankruptcy filings for the month of July hit 126,434 according to the American Bankruptcy Institute (ABI), which utilized numbers from the National Bankruptcy Research Center. That number represents the highest total for a month since new rules for bankruptcy were instituted in 2005.
Compared to the same time in 2008, bankruptcy filings jumped 34.3 percent. The number of filings in July represents an 8.7 percent increase to June of this year, when bankruptcy filings totaled 116,365.
“Rising unemployment on top of high pre-existing debt burdens is a formula for higher bankruptcies through the end of this year,” Samuel J. Gerdano, executive director of the ABI, said.
Gerdano’s prediction seems to be supported by a recent story from Reuters, which used data from Equifax. The report, which showed that bankruptcies climbed 31 percent in June, states that because mortgage delinquencies are on the rise, bankruptcy filings could also see an increase in the future.