U.S. consumers filed 136,142 bankruptcies in May, a 9% increase over the 124,838 filings in May 2009 but down 6% from April, according to the American Bankruptcy Institute.

Consumer bankruptcies for Q1 totaled 388,148, up from 330,477 in the same period of 2009. The first two months of the second quarter saw a total of 260,980 filings. Filings in June will need to reach an estimated 120,000 to fall below last year’s second quarter mark but the monthly trend indicates the total will settle near 390,000 - which would be an all-time high for quarterly filings.

Filings under Chapter 13 equaled 26% of May's filings, up slightly from April. Nearly all the remaining filings, 74%, were under Chapter 7.

The rate of growth for Chapter 7 filings was steady in 2009, at an estimated 71% in every quarter. That rate jumped to nearly 73% in the first quarter, and appears to be headed higher for this quarter as well. Under Chapter 7 liquidation unsecured debts may be discharged, where a Chapter 13 filing enables the debtor to restructure payments on all debts, including unsecured debts, provided that the debtor has a source of income.

More consumers are liquidating because they cannot make the monthly mortgage or because they cannot make the balloon payment that is due. One reason could be high unemployment numbers. If a debtor does not have a job or other source of income, Chapter 13 bankruptcy is not an option.

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