According to data from the U.S. Court System, Chapter 13 bankruptcy filings rose 8% in 2010, going from 407,000 in 2009 to 438,913 last year.

This is the fifth consecutive year in which Chapter 13 bankruptcies have increased nationally. Among all bankruptcy filings, Chapter 13 filings are the second largest sector, behind Chapter 7 filings. In 2010, there were 1.1 million Chapter 7 filings, 257,668 having been filed in the fourth quarter alone.

In Chapter 13 bankruptcy, debtors are allowed to restructure their finances under the supervision of a federal bankruptcy court. Chapter 13 bankruptcy may also allow homeowners how have been foreclosed on to remain in their home until finances are back in order. Chapter 7, on the other hand, focuses on liquidation.

Chapter 7 bankruptcy is a process in which individuals may discharge most of their debt and get a "fresh start." Individuals who file for Chapter 7 bankruptcy are able, in many cases, to keep their home, vehicles, and retirement savings.

Bankruptcy filings have been on the increase since 2006. In that year, a total of 617,660 bankruptcies were filed.

As noted by sources, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 caused a large spike in bankruptcy filings prior to its passage and then a large drop in filings afterward. The BAPCPA was meant to decrease the amount of Bankruptcy filings, but long-term charts show that since its passage filings have slowly crept back up to nearly the same level of filings. No doubt, one factor affecting the increasing number of filings is the current economic recession.

Source: Thompson Reuters, "Bankruptcy charts of the day," Felix Salmon, 15 Feb 2011.