Chapter 13 Attorney for Bankruptcy Can Help Texas Consumers Start Anew

For a Chapter 13 Attorney in Texas, 2010 has been a busy year. According to the Bankruptcy Data Project at Harvard and the USCourts.Gov statistics, over the last 12 months, the number of Chapter 13 bankruptcy filings has increased by 27 percent nationwide. In August alone, bankruptcy cases were up 8 percent over last year. In Texas, in 2009 there were 24,575 bankruptcy cases, and most of these were Chapter 13 filings. In just the first quarter of 2010 alone, there were 14,099 bankruptcy filings in the state of Texas, almost double last year. Most likely this results from Texas having he 11th highest foreclosure rate in the nation where 1 in 819 mortgages result in foreclosure.

Another interesting statistic about bankruptcy involves the types of bankruptcy cases, which have been changing in the last few years. First, more and more baby boomers are filing for Chapter 13 bankruptcy in Texas. In a recent American Bankruptcy Institute study, in 2008 people who were between 45 and 64 years old made almost half of all US bankruptcy filings. The reason for this may be that baby boomers tend to have more healthcare expenses, higher credit card debt, and have to finance care for both children and elderly parents.

Why are more baby boomers choosing Chapter 13 bankruptcy filing to clear their debts? Chapter 13 bankruptcy filings allow consumers to keep more of their assets. The way the plan works, the consumer has to form a budget that will allow them to pay off their creditors over a five-year period. Another popular way to file bankruptcy, Chapter 7 filing, requires the liquidation of more assets.

The seriousness of this problem is that three years ago Congress made it more difficult to file bankruptcy when they passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, yet the number of bankruptcy filings has more than doubled in these past three years. The law increased the filing fees, incorporated a test for eligibility, mandatory financial counseling, and installed an eight-year wait time before the consumer could file bankruptcy again. According to "The Fragile Middle Class" by Elizabeth Warren, Harvard Law School, the people filing for bankruptcy now are generally couples, slightly better educated than the general population. Two out of three of them have lost a job, and half of them have a serious health problem.

In most cases, these people have also waited too long to get help from credit counselors, because they were hoping for more federal mortgage. Many consumers who do attend credit counseling don't want to file for bankruptcy. They usually find that they have no other option left because they're so far in debt. The problem seems to be getting worse, but filing for Chapter 13 Bankruptcy gives them the option of finally getting out from under their massive debt.