Bankruptcy data is kind of the preemptive strike before foreclosure. Although not everyone who files for bankruptcy has their home foreclosed, and not every foreclosure wen thru bankruptcy, it's a signal nonetheless. The bankruptcy data from quarter 2 2011 is good and bad. The good news we'll start with first.
Chapter 7 bankruptcy filings for LA were actually down. This is significant because it's the first period we've seen a decline in filings the end of 2006.
Chapter 7 bankruptcy, the individual is allowed to keep certain exempt property. Most liens, however (such as real estate mortgages and security interests for car loans), survive.The bad news is Chapter 13 filings were up, and up more than the past two quarter increases. (The rate of increase from quarter to quarter was up.) Quarter 2 2011 Chapter 13 filings for LA actually hit an all time high at 20597. Chapter 13 filings,
allows individuals to undergo a financial reorganization supervised by a federal bankruptcy court. The Bankruptcy Code anticipates the goal of Chapter 13 as enabling income-receiving debtors a debtor rehabilitation provided they fulfill a court-approved plan.If this is an indication of economic health then LA is in some tough times. Things are getting worse, not better. Remember, although the increase quarter by quarter is around 5% on average, it's still INCREASING which means, date I remind you, that more and more new people are in dire straits. What's next? Here's where we're at, the need for jobs.
The solution? I wish I knew, but it seems clear we're not only stuck in the woods, but will have another few years of belt tightening.
Alas, thanks again to San Diego Bankruptcy Attorney Cecilia for the stats.