In a bit of mixed news that may not surprise many of our readers here in Memphis, Shelby County, Tennessee, had more bankruptcy filings in 2012 than in 2011. According to an analysis done by a local news organization, there were 12,471 filings in 2012, 50 more than there were in 2011.
Chapter 13 bankruptcy filings accounted for the largest increase in types of filings, with a 2.8 percent increase from 2011 to 2012. There were 9,534 Chapter 13 filings in total. A Chapter 13 filing gives the person in debt the ability to formulate a repayment plan over a period of several years, which then sees the remaining debt discharged at the end of the repayment period.
There were 2,908 Chapter 7 bankruptcy filings, and only 29 Chapter 11 filings, which was lower than in 2011. Chapter 7 filings were down by 3.5 percent.
This could be a mixed blessing because the higher number of Chapter 13 filings could mean that people at least have income coming in, but they are having trouble escaping old debts from when times were tougher a few years ago. But one local official, who heads a community development group, warned that too many people are filing for Chapter 13 when they should be seeking a different type of protection.
He said that too many people come out of Chapter 13 only to end up in trouble again. This is why it's important to make sure you are getting good advice from an experienced professional who is familiar with the bankruptcy code. The official said that one of the biggest hurdles for getting more people back on track is that people don't know what advice to seek or who to get it from. This is where experienced bankruptcy attorneys can come in handy.
Source: The Daily News, "2012 Bankruptcies Steady in Shelby County," Bill Dries, Jan. 18, 2013