Improving Economy?

Bankruptcy courts may be one of the better economic indicators of both the local and national economy.  A recent article dated July 4, 2011, of an interview with a bankruptcy judge in Florida gives some insight on why this is so.  Judge Glenn of the Middle District of Florida said, "Filings slowed dramatically after the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, but have since risen annually."

Judge Glenn also described one reason why individuals file for bankruptcy protection.  He said:

When you talk to the lawyers at the Bar meetings, you hear how the foreclosures in the state courts have slowed a little because of all the foreclosure problems. There is speculation that when the foreclosures pick back up in the state courts, that the bankruptcy filings will pick up.

That’s because 30 percent of our filings in Jacksonville are the kind of filings to save homes, Chapter 7 is liquidation, Chapter 13 is to save a home, Chapter 11 is business reorganization. About 25 to 30 percent of our filings, districtwide and in Jacksonville, are Chapter 13s, so when foreclosures pick up, this will probably pick up.

Judge Glenn also predicted that bankruptcies should flatten out, but could increase as the population in his District increases.  He also said that, "From all I can tell, [the economy] is getting better. I base that on the fact that the job markets, although they’re increasing slowly, are increasing.  From what I see, for the last 12 months, our filings are only up 1 percent as opposed to how much they increased before that. For the first five months of this year, they are down. I think the economy is getting better. Slowly."

Let's compare the Middle District with the Northern District of California.  From March 2010 to March 2011, 38,405 cases were filed in the Northern District.  This compares to 35,401 during the previous year.  This is over an 8% increase from 2010 to 2011.  Similarly, in the San Jose Division, the total number of bankruptcies filed increase over 5% (13,117 in 2011 compared to 12,476 to 2010).


The hope is that we will all recover in the near future.  


For more questions on consumer or small business bankruptcy protection, call the Henshaw Law Office at (408) 533-1075.  


www.HenshawLaw.com
www.Bankruptcy-SanJose.com


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