Bankruptcies: The No. 1 Growth Area For 2008

[Joanne98]

The St. Louis Post Dispatch is writing Bankruptcy filings expected to soar as economy slides


The law that drastically changed the Bankruptcy Code in October 2005 was supposed make it tougher to escape debts and reduce the number of filings. It worked, for a time.

Although the law made filing for bankruptcy more complex and expensive, the number of cases locally and nationally is rising again. Experts predict a big hike later this year, triggered by the nation's wobbling economy and heavy levels of consumer debt.
My Comment: Actually the law never worked. There was a mad rush of filings in 2005 to beat the law changes. That reduced filings in 2006 and perhaps for a bit in 2007. Now nature has reasserted itself. The spike that came immediately following and the subsequent slowdown is not a sign that anything "worked". There is also an unseen effect that we will see in just a bit.

National statistics indicate the trend is well under way, with bankruptcy filings by individuals up 27 percent nationwide in the first quarter of 2008 compared to the year-ago period, according to new figures from the American Bankruptcy Institute, a research and education group.

Individuals' bankruptcies nationwide rose 40 percent in the 2007 calendar year compared to 2006. The ABI, which bases its figures on data from the National Bankruptcy Research Center, said the increase is due to rising household debt and growing mortgage problems.
My Comment: Bankruptcies in 2005 were unusually high, and bankruptcies in 2006 were unusually low. Also Katrina hit in 2005 so the data is distorted by natural disasters (hurricanes) and manmade disasters (the bankruptcy reform act of 2005).

The full impact of the nation's sliding economy is not reflected in the most-recent figures — that may take a few more months — and many lawyers believe there will be a lot of bankruptcy-related business up for grabs this year.

"Nationally, people think that the No. 1 area of growth this year will be bankruptcy," said Carrie Titus, division director of Robert Half Legal, which provides legal staffing to law firms and corporate legal departments.

http://globaleconomicanalysis.blogspot.com/2008/04/bankruptcies-no-1-growth-area-for-2008.html

[glowing]

1. Add me to the list. I'm not going down trying to pay their enormous fees they

added to my cards.. I have my little home and garden growing already..

[flamin lib]

2. I was one of those who raced to file in 2005. I'm one of 30% who

will actually pay the plan out. October this year!

BK was the best thing I ever did for myself--after quitting smoking.

There is no shame in it.

[glowing]

4. I'm trying to tell my SIL who's about to do the same thing.. she divorced

and the house they need to sell won't.. its been listed now for a year.. no takers yet. So, she's forced to do this.. and prob., like myself, will be picking up a part-time bartending gig.. Even in bad times, people still drink.

[NMDemDist2]

5. I didn't 'race to file' but I will finish out my chap. 13 plan too

lucky you to be done in Oct, I have until 6/2009 to go.

but no mortgage now since I was able to sell my house before the bubble burst and buy cash in a rural area

I spoke with my attorney's secretary last week though, and she said they were busier than ever but the cases were just nightmares and took 3 times as long to get settled.

[kestrel91316]

3. I had a client for years who was a bankruptcy attorney.

The Clinton years were pretty rough on him, lol.

He hasn't been in for a few years, since his cat bit the snot out of me right in front of him without warning, lol, but I imagine he's pretty flush these days.......

(I think he didn't come back because he and his wife both knew the cat was a serious no-warning biter, but they forgot to warn ME before asking me to clip his claws.........OOPS. Don't do that to your vets, people.)