The number of bankruptcies in New Jersey surged 35 percent in 2009, with businesses filing at an even faster rate, as the recession battered the economy and unemployment shot up.
Personal bankruptcies, which account for 96 percent of all state bankruptcies, were 35 percent higher last year than in 2008, according to figures released by the U.S. District Bankruptcy Court for New Jersey.
Business bankruptcies rose by 46 percent to 1,550, or about 30 a week, figures show.
In North Jersey, personal bankruptcies rose even faster than at the state level, with a jump of 56 percent in Bergen County over 2008 and a 39 percent leap in Passaic County.
Business bankruptcies in Bergen soared 46 percent over 2008, and the number in Passaic remained flat.
Eric R. Perkins, a Ridgewood bankruptcy attorney, said the struggle to pay off health care bills was a key driver in the rise of personal filings in 2009, as it was before the recession. But unemployment worsened the situation, as many people found themselves unable to pay their bills, and even employed people struggled to pay their mortgages.
"What people do is they lose their job, or they are unable to pay their mortgage, they use their credit card to pay daily expenses" and deplete their savings and cash paying the mortgage or health care costs, he said. "At some point, they run out of cash and can't do it anymore."
The figures were in line with national numbers reported by the Alexandria, Va.-based American Bankruptcy Institute. They showed personal bankruptcies rising by 32 percent to about 1.4 million.
Michael Sirota, a Hackensack corporate bankruptcy specialist, said the financial shocks in the fall of 2008, the slowing economy and the lack of credit forced many companies into bankruptcy. And some were pushed over the edge by lenders losing patience as they waited for payment, he said.
But the actual number of New Jersey business bankruptcies was likely far higher than reported, because many companies file in New York, where they do business, or in Delaware, where they are incorporated, he said. There also has been a rise in companies avoiding bankruptcy in order to cut time and expense and negotiating a restructuring with creditors, he said.
Both attorneys said they expect the numbers to go up this year, even if the economy improves, because it will happen too late to help many people and companies.
"There is always a lag," Perkins said. "There are people right now holding on for dear life, thinking that tomorrow is going to get better. But it doesn't."
The number of bankruptcies in New Jersey surged 35 percent in 2009, with businesses filing at an even faster rate, as the recession battered the economy and unemployment shot up.
Personal bankruptcies, which account for 96 percent of all state bankruptcies, were 35 percent higher last year than in 2008, according to figures released by the U.S. District Bankruptcy Court for New Jersey.
Business bankruptcies rose by 46 percent to 1,550, or about 30 a week, figures show.
In North Jersey, personal bankruptcies rose even faster than at the state level, with a jump of 56 percent in Bergen County over 2008 and a 39 percent leap in Passaic County.
Business bankruptcies in Bergen soared 46 percent over 2008, and the number in Passaic remained flat.
Eric R. Perkins, a Ridgewood bankruptcy attorney, said the struggle to pay off health care bills was a key driver in the rise of personal filings in 2009, as it was before the recession. But unemployment worsened the situation, as many people found themselves unable to pay their bills, and even employed people struggled to pay their mortgages.
"What people do is they lose their job, or they are unable to pay their mortgage, they use their credit card to pay daily expenses" and deplete their savings and cash paying the mortgage or health care costs, he said. "At some point, they run out of cash and can't do it anymore."
The figures were in line with national numbers reported by the Alexandria, Va.-based American Bankruptcy Institute. They showed personal bankruptcies rising by 32 percent to about 1.4 million.
Michael Sirota, a Hackensack corporate bankruptcy specialist, said the financial shocks in the fall of 2008, the slowing economy and the lack of credit forced many companies into bankruptcy. And some were pushed over the edge by lenders losing patience as they waited for payment, he said.
But the actual number of New Jersey business bankruptcies was likely far higher than reported, because many companies file in New York, where they do business, or in Delaware, where they are incorporated, he said. There also has been a rise in companies avoiding bankruptcy in order to cut time and expense and negotiating a restructuring with creditors, he said.
Both attorneys said they expect the numbers to go up this year, even if the economy improves, because it will happen too late to help many people and companies.
"There is always a lag," Perkins said. "There are people right now holding on for dear life, thinking that tomorrow is going to get better. But it doesn't."
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