Personal bankruptcies increased 88 percent in the Sacramento region in the first half of the year, and few debtors are showing up in court to plead for their houses.
Most owe more than their home is worth and have nothing to argue about.
This means large numbers of uncontested bankruptcies are packing court calendars. Business bankruptcies are up 50 percent from a year ago; total bankruptcies are up 68.5 percent.
The players range from small ice-cream dispenser Avasoft Inc. to John Reynen, co-owner of Reynen & Bardis Communities Inc. Avasoft owed $6.1 million; Reynen listed debts approaching $1 billion.
Still others seek help too late.
“They’re out of cash. They’re out of assets. There’s nowhere to go,” said Dale Ginter, a bankruptcy attorney at Downey Brand LLP, Sacramento’s largest law firm. “They may not file at all, just let the business die and blow away.”
Lawyers turning down work
Consumer bankruptcy filings are increasing twice as fast locally as nationwide. They rose 62 percent in the four-county area from January through June, compared to a national increase of 30 percent.
The trend reflects the growing financial strain felt by U.S. households burdened by high debt, rising mortgage costs and falling home values, bankruptcy experts say. The wild housing boom here brought inflated prices that precipitated an even greater fall.
A new survey of major metropolitan areas in the United States shows home values fell in most markets this spring, but the Sacramento region saw the largest drop. Home prices fell 31.7 percent in April, compared to a year ago, according to the RPX Monthly Housing Market Report.
BUSINESS JOURNAL:
http://sacramento.bizjournals.com/sacramento/stories/2008/07/21/story2.html?b=1216612800^1670995
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