News agencies continue to report that we are no longer in a recession period, but rather a recovery stage for our economy. If this is in fact the case, the improvements in the economy should eventually trickle down to reflect fewer bankruptcy filings throughout the United States. As people are able to obtain jobs, and unemployment decreases these numbers should eventually be reflected in the number of bankruptcy cases being filed. Current statistics from U.S. Bankruptcy Courts, reflect significant increases in the number of Chapter 7 and Chapter 13 bankruptcy cases being filed in 2010 in comparison to 2009. As a comparison the number of bankruptcy cases filed from 2009 to 2010 for the Central District of California has shown tremendous increases.
Information on bankruptcy filings for the Central District of California indicate significant increases in the number of Chapter 7 and Chapter 13 bankruptcy cases filed in 2010. The Central District of California reflects bankruptcy filings for the areas of Los Angeles , Orange County, Riverside, San Bernardino, San Fernando Valley. Ventura, Santa Barbara and San Luis Obispo. Based on data obtained from the Administrative Office of the U.S. Bankruptcy Courts, the number of Chapter 7 bankruptcy cases filed in the Central District in 2010 was 109, 415. This is a significant increase from 2009 where the number of Chapter 7 bankruptcy filings totaled 83,656. An increase of 25,759 from 2009 to 2010 reflects a 31% increase in the number of Chapter 7 bankruptcy cases filed from 2009 to 2010 for the Central District of California.
Chapter 13 bankruptcy cases had even higher increases from 2009 to 2010. In 2010, the number of Chapter 13 bankruptcy cases filed was recorded as 32,174. In 2009 the number of Chapter 13 bankruptcy cases filed was significantly less with a total of 23,853. An increase of 8,321 cases were recorded from 2009 to 2010, which reflected a 35% increase in the number of Chapter 13 bankruptcy cases from 2009 to 2010. The higher percentage increases in Chapter 13 bankruptcy cases filed in comparison to Chapter 7 cases may be reflective of more homeowners seeking bankruptcy relief to stop home foreclosure, and repay arrears that are past due on their homes.
Although these numbers are reflective of the increases in bankruptcy cases filed in Orange County , Riverside, Los Angeles, and surrounding counties, most other districts have also experienced increases in bankruptcy cases. Any economy recovery is likely to eventually be reflected in the number of bankruptcy cases being filed. The current rates do not indicate that bankruptcy filings are likely to decrease any time soon. Although there is hope that eventually the “economy recovery” will be reflected in unemployment numbers and other rates including bankruptcy filings, the question remains when it will start to show.