Decline in Bankruptcy Filings in Southwest Florida

Written by CFB Blogger. Posted in Blog

Although bankruptcy filings by consumers and businesses in Southwest Florida have declined considerably over the past three years, some 2,600 residents and companies in Sarasota, Manatee and Charlotte counties filed bankruptcy in 2013, a decrease of about 50% from the peak of the Great Recession in 2010. However, that is 500 more bankruptcies than in 2007, a worrisome sign that Americans are still struggling with debt and unemployment. One bankruptcy attorney in Sarasota said that his office only sees half as many bankruptcy clients as it did five years ago. “One big factor is that the credit market is still fairly limited, and people are not being issued credit cards or home equity loans at the same rate they were prior to the Great Recession. There is less credit out there for people, so not as many people are filing,” he said. Another factor is that many consumers who needed to file for bankruptcy protection already have done so. Under Chapter 7 bankruptcy, one is normally not allowed to file another bankruptcy for at least eight years. A second Sarasota-based attorney states that she sees about the same number of clients who need to file bankruptcy; this, she avers, may be because their financial lives have actually improved. She states, “’A lot of times people hit bottom and decide not to file. If you have nothing to lose, there is no reason to file bankruptcy. But when they get employed again and creditors start garnishing their wages, they have a reason to file now.’” Writing for www.heraldtribune.com, John Hielscher avers that since bankruptcy is a lagging indicator of an economic downturn and recovery, bankruptcy filings may peak after this recession has ended and may not see a significant decrease until consumers have gone through their entire savings. He added that “Many Florida homeowners used bankruptcy to stave off foreclosure during the downturn, particularly those who were snared in the robo-signing mess and wanted to keep fighting for their property”. In the same news report, Mekael Teshome, an economist with the PNC Financial Services Group, opines that “Bankruptcy filings are an important barometer of the economy, and the decline in Southwest Florida means households are in better shape”. “’When you have a higher number of bankruptcies, people are losing money. Declining bankruptcies signal to us that the economy is rebalancing, that there is a better alignment between debt out there and people’s ability to service that debt’”, he stated. Chapter 7 bankruptcy was the most common type of filing, accounting for more than 70% of the cases filed in the Middle District of Florida in 2013. For experienced and knowledgeable Chapter 7 or Chapter 13 personal bankruptcy assistance, you can rely on the attorneys from Client First Bankruptcy who have helped thousands of satisfied clients discharge their overwhelming debt. For your free initial consultation, please call our knowledgeable and compassionate lawyers toll-free at 800-383-6004.  We answer our phones Monday-Friday from 8:30 a.m. – 6:00 p.m. Central Time. And log onto www.clientfirstbankruptcy.com for vital and timely bankruptcy information 24/7 so you can get the information you need at your convenience.