A recent news report that appeared in the Jacksonville Business Journal may provide some welcome news to Florida residents. According to the article, filings with the U.S. Bankruptcy Court for the Middle District of Florida declined by 19.7 percent in 2011. This district covers many of Florida's most populated areas to our north.

In 2010, there were nearly 67,000 bankruptcy filings in the district, but this declined to a little more than 53,500 filings in 2011. The number includes 2,389 business filings and 51,166 non-business filings. Moreover, the 19.7 percent decline is significantly greater than the national average decline of 11.5 percent.

Interestingly, Chapter 7 bankruptcy filings far outnumbered other types of filings, accounting for nearly 40,000 of the petitions filed in 2011. This may be because Chapter 7 allows for the total elimination of debt, which can be attractive to some business owners and to many individuals. However, it does so by liquidating many of the assets owned by the debtor.

Chapter 13 bankruptcy, on the other hand, allows self-employed business owners and individuals to reach a repayment agreement with their creditors. For companies that are able to file under Chapter 13, this can be helpful as it allows the company to stay in business and continue operations even as it goes through the bankruptcy process. Likewise, the law typically allows individuals to keep their property in a Chapter 13 bankruptcy.

Despite the improving economic picture, though, it is no doubt true that many continue to experience tremendous financial hardship. After all, the economic recession hit Florida hard. To gain control over one's finances, it may be worth considering filing for bankruptcy.

Source: Jacksonville Business Journal, "Bankruptcy filings drop in Florida's middle district," Feb. 8, 2012