Orange County Bankruptcy Lawyer Blog

U.S. bankruptcy filings, for both individuals and businesses, fell 4 percent in April, Bloomberg Businessweek reported.

While it is the first small sign of stabilization, consumer bankruptcies in hard hit areas like California, Nevada and Florida are likely to remain elevated for the foreseeable future. As our Orange County bankruptcy attorneys reported last week, California bankruptcies handled by the Central District Court could reach a record 120,000 filings this year -- four times the annual bankruptcy filings reported in 2007 before the economic downturn. The Central District handles bankruptcy filings in Riverside, Los Angeles, Orange County, Santa Barbara, San Bernardino, Ventura and San Luis Obispo.

States that continue to report the largest increases in monthly bankruptcy filings include California, Hawaii, Virginia and Vermont. The states with the most filings per resident were Nevada, Tennessee, Georgia and Michigan.

Despite the decline in filings nationwide, Businessweek reported April filings remained at the second-highest level since bankruptcy laws were tightened in 2005 in an effort to make filing for bankruptcy more difficult for consumers. The primary change involves consumers filing for Chapter 7 Bankruptcy, which eliminates most debt. The new rules can require repayment of certain debts for consumers who do not meet a certain income-debt ratio. Speaking with an experienced Los Angeles bankruptcy attorney can help determine the solution that will best address your financial situation.

The record for bankruptcies was 2.1 million in 2005, a figure inflated by an estimated 630,000 consumers who filed in the two weeks before the new rules went into effect.

Nationwide, bankruptcy filings totaled 146,000 in April. March filings were about 158,000. Those figures represent a 4 percent daily decline in bankruptcy filings. There is some question about whether the majority of the decline involved commercial bankruptcies; some experts suspect consumer bankruptcies continue to increase as families battle high credit card debt, underwater mortgages and high levels of unemployment.