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Personal bankruptcy filings rose 60 percent in Connecticut last year, but the 2008 total was still less than half the number in 2005 on the eve of Congress stiffening bankruptcy rules.
Nearly 5,700 personal bankruptcies were filed in Connecticut last year, according to the Boston-based Warren Group, up from more than 3,400 in 2007 and 2,600 in 2006.
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“In the past, many desperate homeowners used to rely on home-equity loans to pay off bills,” said Timothy Warren Jr., CEO of the Warren Group, in a written statement. “As home values have plummeted and owners are left without home equity, a growing number are resorting to bankruptcy.”
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By comparison, bankruptcy filings were up 41 percent last year in Massachusetts.
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Since 2006, a person filing for bankruptcy protection is prohibited from filing under Chapter 7 rules that wipe out most debts if that person makes at least the median income in their state. Instead they must file under Chapter 13 rules that arrange for three- or five-year repayment plans.
