Bankruptcies are on the rise as Americans adjust to dealing with record-high consumer debt, reduced credit and job losses. Generally through tight economic times, the American homeowner was able to tap home equity to manage finances. However, declining home values and the decreased ability to borrow money has many homeowners struggling to simply hold unto their homes. Many Americans, under financial stress, have managed their daily finances with high-interest and penalty-laden credit cards. This behavior, coupled with the historic financial times, has created an economic environment prone to increased bankruptcy filings.

The bankruptcy filing rate has increased on average 8 percent per month over the last two years. These filing statistics are split between chapter 7 and chapter 13 filing petitions and have grown by 34 percent over the last 12 months. The Chapter 7 bankruptcy provides the petitioner the ability to clear all consumer debts. Although the assets of the petitioner will be sold to pay any outstanding debt, the petitioner is able to receive a “fresh start” with their financial lives. The Chapter 13 bankruptcy will re-organize consumer debts to be repaid by the debtor and allow a homeowner to keep their home while repaying defaulted and delinquent debts. As the economy continues its downward spiral, the number of foreclosure notices continue to grow and more restrictive borrowing guidelines surface, the Americans consumer will be left with few choices outside of filing for bankruptcy.

Neighboring states, Pennsylvania and New Jersey, tell a different tale of the current national economic crisis. Although both states are dealing with their share of financial woes, New Jersey more than triples the monthly foreclosures of the Keystone state.

The national average of foreclosures is more than 250,000 notices per month resulting in an average 1 in every 452 homes receiving a foreclosure notice. New Jersey residents averages 1 in 700 homes in a defaulting loan crisis. Although New Jersey ranks eighth in the nation on monthly foreclosure notices, Nevada ranks number one with 1 out of every 74 home being affected by a defaulting mortgage loan. Pennsylvania is 30th on the state foreclosure rankings.

Over the last 12 months, the national foreclosure rate has increased by 25 percent, but the national month-to-month increase of foreclosures is 5 percent. New Jersey’s foreclosure rate is rising by 10 percent each month, but Pennsylvania has seen a drop in troubled homeowners by 4%. Many states have implemented legislative-backed freezes on foreclosures. This intervention by the government has brought a significant decrease to the foreclosure for the states enacting such legislation.

The online bankruptcy filing system in Delaware has come to a halt. Delaware is the premiere state in which to register corporations but corporate bankruptcies are at historic levels. An otherwise insignificant technical issue with the system has caused a real problem for the legal system in Delaware. The 24 hour online system is used to file proceedings in order to stop foreclosures and lawsuits. For 3 days the system was down, and officers of the court had to resort to the antiquated and time- inefficient paper filing system.

Delaware has experienced the most corporate filings in the last 18 months of the 50 states. Delaware claims 60% of all bankruptcy filings in the last year with the second highest bankruptcy filing coming from New York with 17%. Delaware has the largest amount of corporate Chapter 11 bankruptcy filings in the US and has worked feverishly to correct the online systems malfunctions.

The US economic crisis has reached the pockets of the world’s billionaires. The Yellowstone Club, based in Montana, is the exclusive vacation home to many of the world’s billionaires, including Bill Gates of Microsoft. However, being a favorite site of traveling billionaires couldn’t prevent the international resort from filing for Chapter 11 Bankruptcy. The resort has a nearly a half of billion dollars in debt and has found that spending cuts have struck even the financially fit.

Partly setting the stage for the financial woes of Yellowstone was a costly and drawn out divorce between the husband and wife owners in 2006. The suffering economy has garnered negative growth on Wall Street’s performance, reduced the net worth of many individuals and caused even the wealthy to restrict personal luxury expenditures.

As the economy continues to spiral downward, another retail store is closing it’s doors due to filing bankruptcy. Tweeter, a high end retail electronics store, filed bankruptcy on November 5th.

Initially the bankruptcy court granted Tweeter permission to accept gift cards that have already been purchased by consumers through November 15th, but that deadline has been extended until the stores close, which is expected to happen by December 31st. If you have received a gift card, you need to take your last chance to use the card now.

Keep your eye on other retail outlets that are considering filing for bankruptcy protection as gift cards are considered unsecured debt and may not be honored once bankruptcy papers are filed.