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.”
Example:
(the Real Housewives of New Jersey)
Six Reasons Why Teresa Giudice’s Bankruptcy Situation Is Appalling
4) There are real people, real businesses getting screwed here in the process — because they won’t get paid. The Giudice’s are being let off the hook and won’t have to pay for products purchased and services rendered from legitimate business people who had faith they’d be paid. The couple owes more than $33,000 on various store credit cards, $85,000 for home repairs and $91,000 for materials used to build their new home. What about the hard workers who performed the repairs?
Hope and change again.
"Together we can't"
But. Just yesterday V.P. Biden was saying that the economy has recovered! Certainly must be the fault of the bloggers.
Bump for reference.
Hope we change Presidents..soon.
But...but...but......democrats are for the working man!
Dave Ramsey bump.
So people voted for hope and change and they either had to file bankrupcty or they were screwed out of money in their business because somebody else had to. If that doesn’t motivate people to vote for a real change I don’t know what will!
And the Sen from Taxatusist dodges paying his fair share of taxes.
Well they did replace drunk ted with a Republican. Even a moderate to slightly lib one like Brown is a massive improvement over ted or kerry.
Perfect example of why small businesses are ‘pulling in their horns’. There is a serious problem with ‘loss of trust’ in this society. Right now the anger is directed toward the government. But quite a few are mad at the exact people that voted expecting ‘benefits and entitlements’. And they wonder where the jobs are!
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.Aw, 9 percent, he's breakin' my heart. You know what creates jobs?!? When thousands of people living in overpriced homes in and around Boston refuse to pay their bills, declare bankruptcy, and cause banks to fail and be taken over by US taxpayers. Thanks Son House.
Relax folks according to Steny Hoyer Number two To Pelosi Yesterday speaking Before the Center for American Progress ,this is just the price we have to Pay to Build a New FOUNDATION of Great Humanitarian PROGRESSIVE policices which have Been so sucessful For Decades.
Oh yeah he also thanked John Podesta for doing a Great Job
Where’s the “unexpected” in the headline.
In many situations, the Giudice’s being a prime example, the bankruptcy is merely a legal formality, as based on what I’ve seen, the creditors won’t get paid regardless...I mean, on a 70k income with millions in debt what do you think is going to happen?
The real question is how the hell did they manage to rack up that much in the first place?
Wishful thinking, I think. Bad economic times do not a Republican victory make. From what solutions the GOP has put on the table, a change would be hope replacing hope.
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