The American Bankruptcy Institute (ABI) issued their report yesterday detailing statistics in the bankruptcy industry for the first half of this year.  The data shows close to record numbers of personal bankruptcy cases, 14% more than the same period last year.

According to ABI Executive Director Samuel J. Gerdano’s statement, this is directly attributable to “years of rising consumer debt and low savings rates”.   Coupled with the current high unemployment rate, the bottoming out of the housing market and continued low consumer confidence, bankruptcies are approaching the level they were when the laws changed in 2005.  At that time, there was a massive rush to file before new laws closed loopholes and raised fees.

This new rise in consumer bankruptcy filings is stirring the pot on the old debate about what caused the situations – spend happy consumers or predatory lenders.

A law professor with the University of Maine, Lois Lupica, is currently researching the costs related to filing bankruptcy and the effects of law changes through the years.  Her concern, she says, is whether there are “people for whom bankruptcy has become too expensive”.  With the current costs of filing Chapter 7 at roughly $1500, this would seem a valid concern.