January 6, 2009
Bankruptcy Filings Up Again? I Don't Think So
The business section of the LA Times today had a little article entitled, "Bankruptcy filings by consumers soar." The sub-title is "More than 1 million, a 33% rise, sought court protection in 2008." There was of course a 33% increase from 2007 to 2008 - 1.06 million compared to about 801,000 - but filings in December, 2008 went down compared to November on a daily basis which was down compared to October, 2008. Total filings in 2008 are still significantly less than any pre-BAPCPA year going back to 1994. What is especially galling to me is the statement in the article that total filings in 2006 was 573,000 "the lowest level since 1998." That is flat out wrong. Filings in 1998 were almost 1.4 million - the 4th quarter of 1998 was 353,000 alone. 1997 was 1.4 million; 1996 was 1.25 million. But bankruptcy filings soar? I don't think so.
Total filings in December, 2008 were 95,403 compared to November of 91,355 (for only 18 business days) and 108,595 in October. I am certain that the fall off is due to the number of people waiting to see if there is a new law in 2009 which will permit homeowners to re-write their home mortgage. It appears that that will happen and the proposed bill that I saw applied only to cases filed after the law is enacted. I have personally told several persons to wait since they will accomplish more by filing in February or March than today. Of course it is only speculation that Congress will pass anything and heaven only knows what it will say but that appears to be the direction. So persons who have the luxury of waiting are waiting.
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