California, Nevada see Higher Rates of Those Filing Bankruptcy


Bloomberg News reported recently that California and Nevada are facing a large share of people filing for bankruptcy.

Bloomberg News reported recently that California and Nevada are facing a large share of people filing for bankruptcy.

According to the news organization, which relied on information from data-tracking company Automated Access to Court Electronic Records, California was one of the states that faced the highest increase in bankruptcy filings in April. Meanwhile, Nevada had one of the top per-capita rate for filings.

While bankruptcy numbers continued to be high for these two states, nationwide figures from AACER show that business and individual filings dropped 4 percent on a day-to-day basis during the month. In all there were nearly 146,000 filings during the fourth month of the year, down from March's number of about 158,000. Bloomberg said this is the second-highest level seen since new laws were enacted in 2005.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made it more difficult for people to file for Chapter 7 bankruptcy. Rather, many will have to file for Chapter 13 bankruptcy, which requires a five-year repayment plan that will allow creditors to get back some of what they are owed.

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