Unlike the rest of the country, Utah has seen an increase in bankruptcy filings the first nine months of this year. Overall, the nation has had a 10% decrease in bankruptcy filings but in Utah, the number has increased by 7%. According to Samuel Gerdano, executive director of the American Bankruptcy Institute, “The trend of declining filings [nationally] has been consistent with consumers continuing to rein in their spending, household debt, and an overall pullback in consumer credit.”
On the other hand, the bankruptcy court revealed that in Utah, the state’s 7% increase continues the trend in the state over the last 5 years. Ironically, this may have something to do with the state’s own economic success.
Utah’s unemployment rate is about 7.6%, significantly less than the above 9% nationwide. This may have let to less than frugal ways among the Utahans compared to consumers in other states who have been tightening their belts. According to US Bankruptcy Court in Utah 14,552 Utahans filed for bankruptcy protection during the first nine months of this year, an increase of 981 applicants from the 13,571 who filed for bankruptcy during the same period last year.
In offering an explanation for the disparate bankruptcy trends nationally and that of Utah’s, visiting professor at the American Bankruptcy Institute, John Kilborn said, “What you’ll often see is that more people will file for bankruptcy if they think the economy is improving. And it could be that some consumers in Utah see the economy a little different than elsewhere.” Kilborn stated that the reason for the bankruptcy increase during a perceived upturn in the economy is that people want to take advantage of the turnaround by eliminating their debts.
Another contributing factor could be the rate of foreclosure in the state. In other states there has been such a huge backlog of foreclosure cases in the courts that the debtors are still allowed to stay in their homes even while their cases are in court. But in Utah, the backlog is minimal, which tends to contribute towards the higher rate of bankruptcy.
33% of the 14,552 bankruptcy filings in Utah through the first nine months of this year were for Chapter 13 bankruptcy which allows debtors to repay their debts following a court-approved payment plan. The remaining 67% of the filings were for Chapter 7 bankruptcy, commonly called liquidation bankruptcy.
If you are going through financial distress, bankruptcy may be the answer to your financial problems. Bankruptcy can mean a fresh start for you and your family financially. If you wish to have a discussion with a licensed bankruptcy attorney, give us a call at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Oct 19th, 2011. Comment. 
The number of bankruptcy filings in Buffalo and Rochester, New York fell by 20% year on year in August, marking the 15th straight month and 19th out of the last 20 months that bankruptcy figures fell. The number of new cases fell by 19.8% from 749 to 601, according to new figures from the US Bankruptcy Court for the Western District of New York, which includes courts in both Buffalo and Rochester.
Both cities recorded new 10-year lows in the number of bankruptcies in August year-on-year. Bankruptcy filings fell in Buffalo by 16.6% to 388 cases while in Rochester it dropped 25% to 213. From January 1 till August 31, there have been 3,165 new bankruptcy cases in Buffalo and 1,754 in Rochester bringing the total to 4,919 for the two cities. This number is lower than in the corresponding period last year when Buffalo recorded 3,957 cases and Rochester had 2,196 cases, totaling 6,153 bankruptcies.
The drop in the number of bankruptcies in these New York cities follows the trend nationwide. According to the American Bankruptcy Institute, the number of bankruptcies across the nation fell by 11% in August.
Experts believe a few factors have contributed to the decline in numbers of bankruptcies. Although the economy is still sluggish, the local economy has not suffered too badly. Furthermore, due to the economic crisis, lenders have tightened credit, meaning consumers have less chances of defaulting.
However, the declining numbers might also indicate another worrying factor – consumers may be so financially distressed they cannot afford the cost of filing for bankruptcy. This is particularly the case for those who have been laid off from their jobs or those who are depleting their unemployment benefits. The unemployment rate of Western New York is still 7.7%, which is on the high side. Nevertheless, it is lower than the national average that now stands at 9.3%.
Ever since the bankruptcy laws have been revamped in 2005, the cost of filing for bankruptcy has also risen.
There were 460 Chapter 7 bankruptcy filings in Buffalo (294) and Rochester (166). All these were filed by individuals, except for 14 that were filed by businesses. There were 136 Chapter 13 bankruptcy cases in the two cities, with Buffalo accounting for 90 of them and Rochester the other 46. There were 5 Chapter 11 cases, 4 in Buffalo and 1 in Rochester.
So far this year in the Western New York district, there have been 3,705 Chapter 7 cases, 1,190 Chapter 13 cases and 21 Chapter 11 cases of bankruptcy.
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Filed under Chapter 7 (Tampa) by on Sep 14th, 2011. Comment.
The city of Central Falls in Rhode Island has filed for bankruptcy on August 1. This has led to severe cuts in workers’ benefits and disruption to city services.
About 18,000 people live in Central Falls, a city located north of Providence, which is the state’s poorest municipality. For the current fiscal year that began July 1, the city is already projecting a deficit of $5.6 million. On top of that, the city also has $80 million in unfunded pension obligations it owes to 141 retired firefighters, police officers and their next of kin.
Central Falls went under receivership about 14 months ago and since then has had to pay about $800,000 in concessions it negotiated with the union and non-union workers. In recent times, many job vacancies have not been filled and city-owned buildings have been closed. The city lacks some basic services and infrastructure and this situation will only worsen as more federal cuts in funding are imposed.
One example is the library which was ordered closed by the city’s receivers July 1. The library staff lost their jobs and the community lost a vital resource center. A month later, the library reopened manned by volunteers but only on certain days – Mondays, Wednesdays and Fridays to be exact, between 12 to 5 p.m. Because the Central Falls has not kept up its payments to the statewide library system, city residents are not permitted to borrow books from the libraries of neighboring cities.
Likewise the city’s community center has been closed with no sign of reopening. Market talk has it that the Progresso Latino group may buy up the facility but nothing has been confirmed. Firefighters and other city workers face the prospect of further cuts in their salaries and benefits. The city’s receiver has proposed a 50% cut in their pensions and that they bear 20% of their health costs.
The official unemployment rate in the city is a staggering 15% but the actual figure may be even higher. About a hundred years ago, many immigrants from as far as the Middle East came to Central Falls and the surrounding regions seeking jobs in the manufacturing industry. Many found jobs in the textile mills but today these jobs have all but disappeared. According to the statistics, the median family income is $26,844 and more than 40% of those under the age of 18 live below the official poverty line.
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Filed under Chapter 7 (Tampa) by on Aug 16th, 2011. Comment.
The number of bankruptcies in South-Central Idaho still remains high for this year as the unemployment rate showed little improvement. The sector most hard hit is construction, as many contractors, plumbers, builders and others working in the construction industry have lost their jobs.
Even though the South-Central region has posted a lower jobless rate for the third consecutive month in May, the rate did not change very much from previous months. The Twin-Falls micropolitan area and its surrounding regions experienced a one-tenth percentage point rise in its unemployment rate to 7.8% whereas in the Burley micropolitan area, the rate was 7.2% after a rise of three-tenth of a percentage point.
The state-wide unemployment rate stood at around 9%, the highest since 1983 according to the Idaho Department of Labor. Among the sectors that have shown improvements in unemployment rates year-on-year are the professional and business services, healthcare and private education. The construction and manufacturing industries have not yet recovered to pre-recession levels.
Nationwide, the high-tech manufacturing industries suffered a drastic decline in job growth from 2008 to 2009. In 2008, high-tech jobs declined by 2% while in 2009, it plunged 11% largely due to layoffs in big corporations like Dell, Hewlett-Packard and Micron Technology. This has had a spin off effect in Idaho where 7,000 people lost their jobs in this sector from a high of 17,300 in November 2006.
This year, the increase in the number of bankruptcies was not as drastic as it was from 2008 to 2009, although the 2010 level is still high.
Is a recovery on the cards? Analysts say it’s hard to tell just by the results of one quarter. Come the end of 2010, the picture will become clearer. By then, most people in financial distress would have worked through the bankruptcy process already.
Some analysts feel that the economy is not the only factor causing bankruptcies. Other pertinent causes are the slow job creation process and the fact that legislators are not renewing the unemployment extension. The rising cost of medical care has contributed to another form of bankruptcy – medical bankruptcy. When people lose their jobs, they forfeit their employment medical insurance and this further exacerbates the situation where they cannot afford proper medical care when an emergency takes place.
Nationally, the number of job vacancies rose in April to its highest in 16 months, which is a good sign indicating private employers may hire more people in the coming months. The number of jobs advertised in the country rose by 2.8 million to 3.1 million from the end of April last year to March 2010.
Times are certainly bad. You deserve some respite from your debt problems. Bankruptcy can give you that respite. Call us at (813) 200 4133 for a free consultation or visit http://tampabankruptcy.pro.
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Filed under Chapter 7 (Tampa) by on Sep 3rd, 2010. Comment.
The city of Antioch in California is considering filing for bankruptcy protection. Already another California city, Vallejo has filed for bankruptcy and now Antioch city officials are bracing themselves to be the next on the list. With weak revenue earnings and low property taxes, the prospect of bankruptcy seems increasingly likely.
The city has undertaken various measures to reduce expenditure and costs from spending cuts to layoffs to furloughs but they have proven to be inadequate. In fact, Orange County treasurer, Chriss Street expects more local governments in California to have similar experiences. A case in point is Sacramento County where one of its top finance officers predicted a worse-than-expected shortfall of $181 million for the county, which could trigger more than 1,000 layoffs among the county’s workers.
Back in 1994, Orange County, the third most populous county in California filed for bankruptcy protection after they experienced $1.7 billion in losses due to bad investments. It took 2 painful years before the county emerged from bankruptcy in 1996 and had its credit rating restored from its pre-bankruptcy ‘junk’ status. Earlier this month, Fitch Ratings affirmed its ‘AA’ rating on the number of the county’s long-term obligations.
On the other hand, municipal officials are not rushing to the bankruptcy courts because they recognize the very real consequences of bankruptcy. It is not all about getting rid of debts. Filing Chapter 9 bankruptcy, which is the part of the bankruptcy code that applies to municipalities, has dire consequences on the counties such as lower credit ratings which in turn affect borrowing costs. Another consequence municipalities want to avoid is being locked out of the municipal debt market, which would worsen fiscal problems. In addition, bankruptcy could frighten potential investors and thereby dispel the job opportunities that come along with them. This would only serve to exacerbate the unemployment rate, which for California stands at 12.6% in April. For these reasons, most states limit the number of Chapter 9 bankruptcy filings among their counties.
But despite all the gloomy prospects of bankruptcy for other cities, Vallejo has its bankruptcy filing to thank for some positive developments. The move to file bankruptcy has forced public employee unions to negotiate with city officials thus providing city leaders an opportunity to limit compensation, which makes up more than three-quarters of Vallejo’s general fund spending.
Los Angeles, like Vallejo, sees bankruptcy as a viable option for it between now and 2014. Mayor Richard Riordan is of the opinion that bankruptcy would draw the city’s public employee unions back to the negotiating table. Also, it could pave the way for adopting 401(k) retirement accounts for new city workers instead of pension benefit plans with escalating costs.
But the influential public employee unions are not in favor of bankruptcy. Some of these unions are demanding for the state legislature to pass a bill that would require local governments to get the approval of a state board before filing for bankruptcy. Since the board could comprise of many members considered union-friendly, moves toward bankruptcy could be easily rejected or delayed.
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Filed under Chapter 7 (Tampa) by on Aug 10th, 2010. 1 Comment.
