May 11, 2011
BOSTON — Bankruptcy filings in Massachusetts are up -- way up. There were 23,000 filings last year, up 16 percent from 2009. The national rate, meanwhile, rose just 9 percent.
"We've been tracking the number of people filing since 1990, and we have had the highest number of filings per month than have ever been recorded during that timeframe," said Carolyn Bankowski, the Chapter 13 trustee for Eastern Massachusetts, during an interview with WGBH's Bob Seay.
Bankowski cited the struggling economy and a slow real-estate market as possible causes for the increase.
"Due to the economy, more and more people have had to rely on the bankruptcy system, so the numbers have been increasing each year," Bankowski said.
Individuals who file for Chapter 13 bankruptcy get to put together a kind of repayment plan, stopping a foreclosure process and allowing people the chance to reorganize their finaces.
"For Chapter 13, especially, people are filing as a way to save the family home," Bankowski said. "The typical cases that we see are people who have fallen behind on their mortgage, and need time to cure that arrears or try to reach a loan modification with the lender."
Bankowski said the elderly are disproportionately represented in the uptick. "Part of the reason is the homes have so much debt on them at this time and the values aren't supporting that debt," Bankowski said.