Creditnet News Story
March bankruptcy filings up 35 percent
Tuesday, April 6, 2010
By Thomas Astery
The number of bankruptcy filings made in March represented a 35 percent increase over February.
Declaring bankruptcy can seriously damage a person's credit score, though that didn't stop filings from increasing in March.
Automated Access to Court Electronic Records, which tracks federal court filings, reported that bankruptcies increased 35 percent in March when compared to February. In all, more than 158,000 filings were made during the third month of this year.
Having issues with debt can be a problem that compounds itself, as the amount that is owed accrues interest over time. After a while, some consumers may feel as though bankruptcy is the only option because their amount of debt has grown far beyond their means.
However, consumers should keep in mind that filing for bankruptcy is not a panacea for their financial troubles. Though certain debts may end up being forgiven, the filing will stay on a person's credit report for 10 years.
Filing for bankruptcy also lowers a person's credit score by a significant amount. For example, FICO has said a consumer with a credit score of 680 can expect it to drop between 130 and 150 points when they file for bankruptcy protection.
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