Bankruptcy Filings Rise 38% in 2007: What Does That Mean For 2008
By Carmen Dellutri, Attorney at Law on Apr 16, 2008 in Benefits of Bankruptcy, Florida, General Bankruptcy Information, Life After Bankruptcy
Recently, the Administrative Office of the United States Courts released the bankruptcy filing information for 2007. Personal bankruptcy filings reached 822,590 and business bankruptcy filings reached 28,322, for a total of 850, 912. The number of bankruptcy filings rose approximately 38% over the 2006 number of 617,660 filings. I would like to say that I am shocked by this revelation, but I am not. As a matter of fact, I would like to compare the first three months of 2008 to the first three months of 2007 because I believe that the numbers will be even higher. If Southwest Florida can be used as a measuring stick, the numbers for 2008 will be much higher.
According to all of the talking heads who would like you to believe that they know what is going on in the United States economy, the reason for the increase in the number of bankruptcy filings is the slowdown in the housing sector. If that were the case, then a quick fix to the housing sector would stem the tsunami of foreclosures and reduce the number of bankruptcy filings. Those of us who practice bankruptcy law and routinely represent debtors in the bankruptcy courts know that the housing sector is only part of the problem.
A second reason that consumer and business bankruptcies continue to rise is a sluggish economy that the stock market keeps forgetting about. If you follow the stock market, and still have your wits about you, you can honestly state that it has been a roller coaster ride of epidemic proportions to say the least. My predictions is that the economy will continue to struggle, despite what the Federal Government throws at it. This correction is absolutely necessary. Sometimes you have to take a step back to go forward. Don’t get me wrong, without the Government’s swift actions and policy changes, the economy would be in an even bigger mess than it is right now.
A third reason that consumer bankruptcies will continue to rise in the future is that the ongoing credit problems and mortgage problems are far from over. 2008 will continue to see higher gas prices, stagnant wages, more foreclosures, crdit card delinquencies and higher bankruptcy filings. Many of those bankruptcy filings will include homes that are going back to the lenders because individuals will not be able to keep them
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