Bankruptcy: is it just due to the struggling Economy?

Even with the amendments to the Bankruptcy code, making the requirements to file for bankruptcy more difficult, almost a million bankruptcies have been filed in the 12 months preceding the end of June, 2008.  Most of those have been the most severe, Chapter 7 total liquidation.  While it seems clear the defaults in mortgage lending led to a vast majority of the recent bankruptcies the general reasons for filing bankruptcies continues to increase; loss of jobs, uninsured illness and/or divorce.  What seems interesting in the almost 30% increase in bankruptcies is that almost 97% are nonbusiness filings and almost 20% of the total bankruptcies are from Michigan, Kentucky, Ohio & Tennessee. Given the number of mortgage defaults, what is not surprising is that the states with the highest percentage increase in bankruptcy filings are those most heavily involved with recent housing construction: California, Nevada & Arizona.  It does not take a rocket scientist to figure out that between litigation & bankruptcy most are looking for a way out of this downtrend in the market.  Toughing it out for some does not seem an option.  Uncle Sam, although already bearing a heavy backpack, may have to come thru again: although that may just shift the risk to others!   http://knowledge.wharton.upenn.edu/article.cfm?articleid=1912