Nationwide decline in bankruptcy filings unlikely to impact hard-hit California consumers
The Wall Street Journal reported that the number of consumer bankruptcies nationwide fell for the second straight month in May. However, those numbers are unlikely to signal the start of a permanent decline, particularly in hard hit areas like California and Florida.
As our Orange County bankruptcy lawyers and San Bernardino bankruptcy attorneys recently reported, Orange County bankruptcies increased by 50 percent in April. In the Los Angeles area, 1 in 6 consumers filed for bankruptcy protection last year.
Nationwide, consumer bankruptcy filings fell to 136,142 in May, down nearly 6 percent from April. However, personal bankruptcy filings are up 9 percent from a year ago and up 15 percent when compared to the first five months of last year. In some areas of California, bankruptcy filings have increased more than 300 percent since the start of the economic downturn.
For struggling consumers, Chapter 7 bankruptcy allows for the forgiveness of most debt while a Chapter 13 bankruptcy can establish a repayment plan. Either filing will stop creditors from hassling you at home or work, and can also stop the garnishment of wages, foreclosure proceedings and other debt collection measures.
Bankruptcy filings could top 1.6 million this year, compared to the 1.4 million bankruptcy cases filed in 2009. California could account for nearly 10 percent of all bankruptcies filed nationwide this year, with an estimated 120,000 consumers expected to seek protection in bankruptcy court.
California ranks 8th nationwide in the number of filings based on population, with 6.26 bankruptcy cases for every 1,000 residents. Nevada, Tennessee, Georgia, Indiana, Alabama, Michigan and Ohio have higher rates. However, California has by far the highest number of bankruptcy cases of any state in the nation.
Consulting an experienced Riverside bankruptcy lawyer can help determine the best course of action to deal with consumer debt and restore your financial independence. The Shakoori Law Group, a law firm dedicated to bankruptcy, debt collection defense and consumer protection, can be reached at (877) 529-2188.
