Florida’s Middle District which covers Tampa, Orlando, Fort Myers and Jacksonville was second only to the Los Angeles district in bankruptcy filings from October 2009 to September 2010. The Florida Middle District recorded 66,861 bankruptcy filings including all chapters.
That translates to approximately one person out of 100 in these two districts declared bankruptcy last year, based upon a 2009 U.S. Census.
The downturn that began in 2007 has led to an increased number of bankruptcies. The decrease in home equity made people feel less wealthy and they are more apt to file bankruptcy when the credit card debt seems overwhelming. No longer is equity available in homes to tap in an effort to pay down unsecured debt such as credit cards. Realizing this, many people have come to the conclusion that bankruptcy is their way out. Also Americans are coming to realize that the social stigma of filing bankruptcy has nearly disappeared.
While filing a bankruptcy hurts one’s credit especially for the first 1-2 years, in many situations, consumers are maxed out and need to jettison the debt in order to begin to rebuild their credit. Sometimes the deficiency or unpaid balance from a home loan that may remain on a credit report following a foreclosure or short sale will cause someone to be turned down for a vehicle loan. A bankruptcy filing is necessary to clear that debt from the surrendered home from the consumer’s credit report. Finally wide acceptance of debit cards is replacing credit cards and the use of credit to some degree. Filing bankruptcy on the older credit card balances that litter the credit reports and using debit cards until one’s credit is rebuilt is another option.