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Dip in personal bankruptcies; still many filing in Massachusetts

The current economy poses difficulties for people across the country. Readers in Salem and across Massachusetts may have read about the recent decline in personal bankruptcy filings in the Commonwealth and nationwide. Whether or not they are considering bankruptcy, few are immune to current financial challenges and most would do well to be informed about the possibility of debt relief available through bankruptcy.

According to a recent report, during the first six months of this year, personal bankruptcy filings throughout the country dropped to 627,000. During the same period in 2011, there were 725,000 bankruptcies. In Massachusetts, from January to June 2012, 9,118 people filed for personal bankruptcy for an average rate of 2.79 bankruptcies for every 1,000 people. This is compared to three filings per 1,000 people for the same period last year and 3.52 per 1,000 in 2010.

Compared to the national average, however, the number of personal bankruptcy filings in Massachusetts remains considerably higher than in other states. Data indicates that many people continue to have difficulty managing their personal debts.

Given the mounting debts faced by many, bankruptcy may be the most effective way to secure debt relief. In Massachusetts, by filing for personal bankruptcy, individuals can prevent the loss of their home in foreclosure. In filing for Chapter 7 bankruptcy, they can set aside a primary residence valued at up to $500,000 and other personal property from being part of the bankruptcy judgment. Filing for personal bankruptcy can also stop repossession and collection proceedings for a time, allowing individuals to get their finances in order.

Since personal bankruptcy rates in the Bay State remain relatively high, residents who are in serious need of debt management should be aware of the debt relief that may be obtainable by filing for bankruptcy. While economic stability is important to all Massachusetts residents, different means can be used to address individual's unique financial challenges.

Source: Boston Herald, "Personal bankruptcy filings drop nationwide and in Mass.," Ira Kantor, Aug. 13, 2012

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