Posted on 07/24/2010 5:04:40 AM PDT by Son House
The number of bankruptcy filings in Massachusetts surged by 25 percent in the first six months of the year, as many consumers struggled with job losses, changing credit card terms and foreclosures.
The Warren Group reported Thursday that through June 30, 11,847 filers statewide sought protection through Chapter 7, Chapter 11 or Chapter 13 of the federal bankruptcy code.
That figure, which includes businesses and individuals, represents a 25.2 percent increase from the same January-June period in 2009. The sharp rise could put the state on track to surpass the rush of bankruptcies in 2005, before strict limits took effect.
“It’s telling the story that people are absolutely at their wit’s end,” said Vincent Valvo, group publisher for the Boston-based Warren Group’s real estate and financial publications. “It also tells the story of how overextended folks got.”
The most common bankruptcy filing is Chapter 7, which can completely erase many kinds of loans. The number of Chapter 7 filings in the state rose to 9,142 in the first six months of 2010, up 17.6 percent from the same period in 2009.
But the use of Chapter 13 rose dramatically, with 2,586 Chapter 13 filings in the first half of the year, up 62 percent from the same time in 2009. Chapter 13 filings can be used to work out payment plans to prevent foreclosures.
Winchester lawyer Nina Parker said many of her clients come to her office after lenders fail to offer permanent loan modifications to keep borrowers in their homes.
“People are feeling defeated,” said Parker, co-chairwoman of the Boston Bar Association’s bankruptcy section. “They do everything they can to comply with the (loan modification) programs, but the lenders don’t follow through.”
Richard Gottlieb, a bankruptcy lawyer in Boston, said high unemployment – the state’s jobless rate has been at 9 percent or above since September – has made it tough for many people to make ends meet. Many dual-income households struggle when one of the wage-earners lose a job unexpectedly.
“I’ve never seen it this bad,” Gottlieb said. “I’ve never seen this level of misery. ... It’s an incredibly small distance (for many people) between being able to make your bills and get on in life and becoming operationally insolvent.”
Kara O’Donnell, a lawyer with offices in Quincy and Hingham, said some of her bankruptcy clients pursue Chapter 13 filings as a way to keep their homes after lenders stymied loan modification efforts. But she said the vast majority pursue Chapter 7 filings, partly because they can be used to discharge credit card debts. She said Chapter 7 can’t be used to wipe out secured debt, such as a home loan.
Many consumers were caught off guard when credit card companies changed their policies during the past year. In some cases, O’Donnell said, a minimum monthly payment would jump from $200 to $400 or $500. Interest rate hikes for missing payments also skyrocketed, she said.
For most of her clients, bankruptcy is a last resort.
“They don’t just lose their jobs and go out the next day and file for bankruptcy,” O’Donnell said. “Most people will exhaust every last resource they have. ... Some of them will totally empty out their IRAs and borrow money from their families because they think it’s a temporary situation. But for most people, it’s not a temporary situation.”
They better articulate a focused message pretty soon. Most "average al's" don't have any idea what the heck they are running on yet.
...Bush’s fault... ask lamearse idiot-ridden JackSquatPOTUS...=.=
Well yes. In financial terms, that means credit is tight, and can be expensive when you get it. Bankruptcy laws were grossly abused up until 2005 when rules were tightened, but the beat still goes on.
And there are voices in the culture saying it's OK to walk away from duly negotiated obligations, if they become inconvenient at a later date. All you have to do to justify it to yourself is to play the class-warfare card and blame your troubles on the eeevil banksters. Then, your welching is just payback, not personal irresponsibility.
Boy is that a fact. Listening to my usual Saturday morning local liberal talk show, it is appalling how ignorant the average Al really is. I found out today that Ronald Reagan "created a 1.4 trillion dollar deficit, and no jobs. None." GW Bush created no jobs either. So it's obvious tax cuts don't work except to increase the deficit.(This from a guy who sells boats and has reduced his business from 18 employees to two. "Just a downstroke in the economy!")
With talent like this out there voting, we're so screwed as a nation. The NEA has achieved its goal--waste 100 billion a year and turn out a nation of idiots in the process.
What scares me is the old saying people get the government they deserve.
Wow that is a scary image...
Like you stated, such bad behavior is detrimental. There’s no solution possible from our elected officials until society as a whole rejects corruption as a whole. I don’t so much blame the ‘Prince of Fools’ as much as I blame the dumb masses that voted him and his minions the power to loot and pillage their fellow citizens.
Taxes are going sky high. Somebody’s got to pay for this eventually. What if they ultimately kill the golden goose? I thought a major mistake the ‘progressives’ make is to really disparage this nation to the point where no one will see it fit to save any longer.
It's about rampant spending by consumers for a generation. It's about withdrawing equity from their homes at a rate of 8% per year.
The same people were telling us for a generation that they were "just trying to make ends meet" while living in mansions. Yes, in mansions: the average house built in 2007 was 40% bigger than its 1950s counterpart. Couple this with the fact that a family is now twice smaller, and you arrive at the fact that people have 3 times more housing than their parents/grandparents. They also saved nothing -- 1% on average since early 1990s and even negative savings in some years.
With the government and the Fed inflating the money at will, saving money just lets them drain its value right from under you.
Saving is not practical if you don't have sound money to save.
You also conflate the growth of money supply with price inflation.
What kind of credit was he extending?
WHAT?
How could that be?
After all many believe we have the anti-American Muslim in office focused on destroying America from within.
Where is your optimism anyway, geez!
Not sure on the details(nor will I pretend to ‘know-it-all’(remind you of some one?)), maybe some construction/retail business folks could better explain what goes on
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