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Bankruptcy Filings in First Half of 2010 Reach Highest Point Since 2005

July 13, 2010

Our Upland personal bankruptcy lawyers have been tracking bankruptcy filings throughout the recession. Experts in those articles have consistently predicted filing rates that meet or exceed the record spike in filings seen in 2005, just before the bankruptcy reform laws took effect. So we weren't surprised to see a report that bankruptcy filings are at their highest point since that 2005 peak, as the Wall Street Journal's Real Time Economics blog reported July 2. Through the first six months of 2010, there were 770,117 filings in the United States, an increase of 14 percent over the numbers for the first half of 2009. The American Bankruptcy Institute, the source of those numbers, predicted a total of 1.6 million filings in 2010.

According to the blog post, June actually saw a decrease in filings from the month before. In fact, it was the third consecutive month that saw a decrease. However, the Journal noted, filings in June were still 8 percent higher than they were in June of 2009. The highest filing rates were in the southeast and southwest of the United States, with Nevada seeing 15,000 filings per million households -- more than double the national average of 6,800 filings per million households. That information comes from a study by Columbia Law School professor Ronald Mann. The lowest filing rates come from South Carolina, Alaska and Washington, D.C. In fact, while the southeast generally has a high amount of filings, some Southern states, including Alabama and Tennessee, have actually seen reductions in their filings.

No information specific to California was reported in this piece, but as Fountain Valley consumer bankruptcy attorneys, we suspect that California remains relatively high. Unfortunately, our state has one of the highest unemployment rates in the nation, and many regions -- including the Inland Empire here in southern California -- have also been hit hard by the foreclosure crisis. Both of these drive bankruptcy filings and are likely to be factors in Nevada's high filing rate. In fact, the San Francisco Chronicle recently reported that bankruptcy filings have hit record levels in California, and a spokesman for the ABI noted that the states with high filing rates tend to be the same as those with severe housing crises. That article examined whether the 2005 reform law has failed to stop bankruptcy filings. It came to no conclusion on that question, but did conclude that the law increased the cost of filing by about 50 percent.

At Howard Law PC, we help people of all backgrounds and income levels prepare and file for bankruptcy protection to fight out-of-control debts. In addition to joblessness and the housing crisis, we see many clients who are considering bankruptcy because of unsustainable credit card debt, medical bills and other debts not secured with physical property. Many of these clients put off contacting our Oceanside individual bankruptcy lawyers as long as possible because they feel ashamed of needing help or that filing for bankruptcy is a failure. In fact, filing for bankruptcy can be a very smart financial move in the right circumstances, because it allows you to shed debt you can never realistically repay and make a fresh start. In fact, the sooner you come to us, the better the chance you have of preserving assets that might be exempt from bankruptcy, such as retirement savings.

If you're feeling overwhelmed by your debt and constant calls from creditors, you should call Howard Law to learn more about how we can help. To set up a free, confidential case evaluation, please contact us online or call 1-800-872-5925 today.