The number of bankruptcy cases filed in Massachusetts increased by 18% in the last year, and by a stunning 72% over the past two years. The vast majority of the cases are personal bankruptcies as opposed to business bankruptcies. While some businesses are going under, the spike in cases is largely the result of people losing their jobs in the recession.

Other common causes of bankruptcy include divorce, sudden large medical bills, and an inability to meet rising mortgage payments. Personal bankruptcies can be filed under Chapter 7 or Chapter 13. Under Chapter 7, the debtor’s assets are liquidated, creditors receive some percentage of what they’re owed, and the debtor gets to start over. Under Chapter 13, the debtor’s assets aren’t liquidated, but the debtor agrees to a payment plan under which creditors will be paid off over a period of time.

The last two years have seen many more Chapter 7 bankruptcies – they’re up 100% over that period – and a relative drop in Chapter 13 cases. In the past, many people filed under Chapter 13 in an effort to save their homes from foreclosure, but a growing number of debtors are finding that their homes can’t be saved and Chapter 7 offers a better option.