When Congress significantly re-wrote the bankruptcy code in 2005 it was believed, (or at least claimed), that the changes would prevent “abuses” of the bankruptcy system.  As often happens with massive legislation the horror stories used to gin up the support for the “overhaul” often prove to be untrue.  In this case, and in part due to the severe economic times, the revised bankruptcy code (known as BAPCPA) did not halt the filings of bankruptcies in Knoxville or elsewhere.

In fact, the number of consumer bankruptcy cases has now reached pre-BAPCPA levels.  During the first three quarters of 2010 the National Bankruptcy Research Center reports that there have been 1.2 million individual bankruptcies filed.  This total exceeds the 2009 filings for the same period by over 11%.

It is expected that total individual bankruptcy cases in 2010 will reach 2010.  If you visit the bankruptcy court in Knoxville where all bankruptcy cases are filed for individuals who live in Knoxville, Sevierville, Maryville or Jefferson City, you’d easily see the constant parade of folks going into court.   It is my expectation that the number will rise again in 2011.  The much ballyhooed recovery is evident only in the press.  What most folks are seeing is more of the same.  The near term outlook is still bleak

Photo Credit:  Esther Gibbons