business is able to walk away from debts much easier, which shows how
business is treated differently than consumers in the economic downturn.
economy, the light hasn’t shown enough on business bankruptcies according to a
statisticianconnected with the bankruptcy courts.Business bankruptcies are increasing at a faster pace than consumer
bankruptcies according to statistical data. Golmat, a statistician in
the Statistics Division of the Administrative Offices, took a look at
the numbers and assessed the increase in bankruptcy filings since the
Bankruptcy Abuse Prevention and Abuse Act of 2005 (BAPCPA) was passed.What Golmat found was an increase in business debts of 52 percent with a
total of 1,782,643 filings in 2009. By contrast, there were1,344,095,
an increase of 34% over 2008. In 2009 consumer filings were 23 percent
below 2005 levels despite the recession reports but the number of
business filings were 72 percent above 2005 levels.
The assessment involving the high rate of business bankruptcies is
reported due to continuing economic weaknesses. It also reflects,
however, how bankruptcy has changed for individual filings. The 2005 Act
was primarily aimed at individual debtors, making it more difficult to
file under Chapter 7 which allows individuals to erase bad debts when
they have been found unable to pay them.
This same act is not in place for businesses, making it easier for
businesses to file bankruptcies than individuals. The court examination
of this information brings up the question whether the current higher
ratio of business filings will persist when the economy improves. The
statistics also show, according to the report of the court, how the
little guy has more trouble getting rid of debts than businesses.
