Personal Bankruptcy Filings Decrease in Connecticut

Overall personal bankruptcy filings in Connecticut decreased in 2012 as consumers become more confident about their ability to handle debt, according to a report from the ""Warren Group"":http://www.thewarrengroup.com.

[IMAGE]

In Connecticut, personal bankruptcy filings numbered 7,242 in 2012, down from 8,518 in 2011, representing a 15 percent decrease.

""The drop in bankruptcy filings is an encouraging sign; it indicates that consumers are more optimistic about their ability to pay off debt and clean up their financial situations,"" said Timothy M. Warren Jr, CEO of the Warren Group. ""If the housing market - and overall economy - continues to improve, we are sure to see even better results in 2013.""

[COLUMN_BREAK]

Among the different forms of bankruptcy, Chapter 7 filings decreased, falling to 1,628 in the fourth quarter of this year from 1,795 in the same quarter a year ago. Chapter 7 is the most common form of bankruptcy, with Chapter 7 filings accounting for 86 percent of filings in Connecticut in 2012.

The type of bankruptcy involves a liquidation proceeding where the debtor turns over all non-exempt property to the bankruptcy trustee, who then converts it to cash to be distributed to creditors.

On the other hand, Chapter 13 bankruptcy filings saw a more than 9 percent increase to 1,022 in 2012 compared to 934 in 2011. Chapter 13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years and is only an option for individuals with predictable income.

Chapter 11 filings increased and rose 9.2 percent to 130, up from 119 in 2011. Chapter 11 bankruptcy allows businesses to reorganize themselves and restructure their debt. Generally, a business that has filed a Chapter 11 is allowed to continue operating.

Overall, the total number of bankruptcy filers decreased, with 8,394 individuals in Connecticut filing for Chapter 7, Chapter 13, and Chapter 11, down from 9,571 in 2011.