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Bankruptcy Filings Topped $1.5 Million in 2010, Breaking Record Set by Reform Law

January 5, 2011

As San Bernardino consumer bankruptcy lawyers, we were disappointed but not surprised to see the final tally of bankruptcy filing numbers for all of 2010. According to the American Bankruptcy Institute, consumer bankruptcy filings met predictions last year, with a total of 1.53 million filings. That's up nine percent from 2009, and it sets a new record for highest number of filings per year since the 2005 bankruptcy law changes took effect. The past several years have broken that record repeatedly, but one expert told the Wall Street Journal Jan. 4 that this may be the last such year, since borrowing has decreased. This year's numbers were attributed to the same causes as previous years: high unemployment, tight credit and the housing downturn. But surveys suggest that a growing number of filers have middle-class incomes and college degrees.

Western states were among the hardest hit, with California second only to Hawaii in increased number of filings, trailed by Utah, Arizona and Colorado. The article spotlighted a southern California bankruptcy filer, Ed Soapes of Corona. Soapes, 53, lost his job last February as an estimator for a construction company. His household includes three children -- one with disability benefits, one in school and one unemployed -- as well as his mother. All of them depend on the disability benefits and the income Soapes can bring in. He said with so many dependents, it was a "losing battle" to fight off 15 to 18 calls a day from creditors. He listed more than $150,000 in debts in his filing, including a mortgage that he'd like to continue paying. Another filer interviewed for the article said he's had to turn down job offers in other states because he can't refinance or sell his home.

These are stories we hear over and over in our work as Whittier individual bankruptcy attorneys. The economic downturn has forced many people to make uncomfortable choices or compromises, especially involving real estate. Here in southern California, we've met many people who are tied to mortgages they can't afford because they are unable to get a loan modification or, unless the real estate market improves, refinance. We hope the bankruptcy expert quoted in this article is right that bankruptcies will ease as people stop borrowing and the economy improves. In the meantime, however, bankruptcy is one option for people who have more debt than they believe they can realistically pay off, or people who have gotten farther and farther behind on their mortgage payments. Eliminating that debt, or making a plan to repay it, can help such people free up money to meet other obligations and make a new start for the new year.

Howard Law PC represents Californians of all incomes and backgrounds who are considering bankruptcy as a way to deal with overwhelming debts. For many of our clients, bankruptcy is a last resort that they come to only after months of trying alternatives or waiting for a new financial opportunity. Some people even feel that bankruptcy is a dishonorable attempt to dodge their commitments, or a sign of failure. Our Yorba Linda personal bankruptcy lawyers believe that bankruptcy is actually a very responsible choice for people in the right position, because it allows them to escape their debts only through the hard work and sacrifice of liquidating their assets or following a payment plan for years. We help clients set up those plans and ensure that they discharge their debts as fully as possible.

If you're tired of fighting off calls from obnoxious and harassing creditors, you should call Howard Law for a free, confidential case evaluation. To learn more or set up a meeting, you can call us toll-free at 1-800-872-5925 or send us a message through the Internet today.