Bankruptcy has been the saving grace for millions of Americans since the bottom fell out of the economy in late 2007. Entering 2012, the economy has seen a small recovery with unemployment numbers finally inching down and consumer spending over the holiday season giving the retail sector a much needed breath of relief.

These welcome indications have also been reflected in the last quarter bankruptcy numbers in Washington. It seems that many Washington State families are able to not only avoid bankruptcy, but also find enough employment (many families have two, three, sometimes four jobs to make ends meet) to avoid foreclosure.

Though foreclosure numbers in Washington State and around the country are predicted to rise rather than fall in 2012 (they topped the 1 million record set in 2010 this year) there has been word of relief around D.C., plus some foreclosure crusaders hailing from our own state. That’s right, Senator Maria Cantwell vowed this week that she would do everything in her power to block any attempts to relieve banks of the burden of foreclosure until a full investigation into whether they are actually the cause is conducted.

Though foreclosures (along with student loans) are generally not covered in bankruptcies, the numbers are not divorced from each other and in fact, a bankruptcy can prevent a foreclosure from happening if the person files sooner than later. Unfortunately, on a local and national level, the stigma against bankruptcy protection established by the lending elite over decades keeps Americans from reviewing their options until it’s too late.

National Bankruptcy Numbers

Bankruptcy filings fell in November from October, continuing a nationwide trend and expected to follow into December. National bankruptcies in were 101,000 in November, down from 106,000 in October.

“The apparent decrease is slightly misleading, however, when we look at seasonal trends. Because November filings typically are quite low, this month’s filings actually increased 7% from October on a seasonally adjusted basis,” wrote the National Bankruptcy Research Center in their report, which tracks and reports the national numbers.

However, these numbers indicate an 11% drop from the same time last year. Nationwide, 2011 filings to date amount to about 5400 filings per million adults, or one in every 200. Per usual, national disparities show that this really is an average – reflecting starkly higher and lower filing rates across the country.

Despite a fall of almost 20% from last year’s filing rate, Nevada still stands alone at the top with more than twice the national average (about 11,250 filings per million adults). After Nevada, the highest rates are in Georgia, Tennessee, and Utah, all with about 9000 filings per million adults. A regular sighting, California fills in the top 5 with 7800 filings per million adults.

Last Quarter Bankruptcies In Washington State

The number of bankruptcies are considerably lower over most of Washington through the last quarter, which is fantastic news, because it means that the overall state economy is rebounding slightly. This news comes on the heels of some positive news regarding Boeing’s extended and robust manufacturing future may just indicate a more prosperous 2012 for Washington.

The vast majority of the most populous counties in Washington had a considerably lower number of bankruptcies from this time last year with the exception of Whatcom County, who increased nearly 10.5% and Thurston County, who saw a whopping 21.5% increase over last year. Other counties that didn’t fair too well were Jefferson County with a 20% increase, Greys Harbor and Mason Counties who endured around a 10% increase, and Lewis County at 7%.

Perhaps the hardest hit in the whole state this quarter was Island County, who saw a 47% increase in bankruptcies over this time last year, following a hard 20% increase in October. Though we need to take into consideration that the population is quite small and that one bankruptcy can adjust the percentage considerably, this is an indication of some economic hardship in an area that could use some relief.

Chapter 7 Bankruptcy in Washington State

Chapter 7 bankruptcy is the bankruptcy of choice for most Americans despite the 2005 congress trying to essentially drown it in the bathtub. It allows debtors to relinquish their assets and walk away. Their credit is severely effected and most likely they won’t qualify for a fair loan for a long time, but they are not longer being harassed or under threat of garnishment. This gives American families an opportunity for a clean slate with which to begin their lives again.

Chapter 13 Bankruptcy in Washington State

Chapter 13 bankruptcy is the type that allows consumers to make a deal with creditors under a legal agreement overseen by a judge. They agree to pay a certain amount of money per month over a set amount of time based on their current income and the creditor agrees to lower the debt to a fraction of the balance. This balance is usually based on the balance without the exorbitant fees and meteoric interest rates added due to late payment or outright creditor greed.

Seattle Bankruptcy Lawyers

Bankruptcy creates immediate relief and arranges debts together so that they are easy to understand. It offers a reasonable solution to a highly stressful financial situation. The best scenario is to capture your debt and situation prior to being in foreclosure so that you have a few more options, but this is not required. If saving your house is the priority, or just coming out from under a bad situation, then looking into your bankruptcy options is probably the best thing you can do for your peace of mind.

If you or someone you know are drowning under a sea of debt due to credit cards and foreclosure there may be a way to get relief and begin a life where you can fulfill your professional and personal needs. Call Phillips Webster for a consultation on you bankruptcy options.

Learn More About:

• Chapter 13 Bankruptcy
• Chapter 7 Bankruptcy
• Bankruptcy Lawyer

Things are looking up in the bankruptcy world both in Washington State and across the country as people make fewer filings in the month of November. This is reflected in higher than expected consumer spending in December, a sign of the future for the 2011 chapter 11 bankruptcy numbers. Unemployment claims are also creeping down as workers take any job they can get (i.e. stealing jobs from immigrants) for fear of what the incoming conservative congress is going to do based on their campaign attacks on unemployed Americans, framing them as “deadbeats” and “leeches.”

Does this all translate to a stronger economy? Most likely no, because even though bankruptcy claims are coming down, they are still up from last year and the year before in a parabolic rise that seems to be unyielding. It’s as if the basement of the house was flooded and we are celebrating being able to wear waders rather than a scuba suit.

But there are things being done. December was not only a good month for retail, but the Obama administration also touched on the catastrophic changes made to the bankruptcy code in 2005 by a congress that was wholly owned and operated by the credit industry.

Obama Bankruptcy Changes

On December 23, the president signed a bill that made technical corrections to the Bankruptcy Code. The bill was not intended to make any substantive changes but only to correct drafting mistakes from the 2005 changes to the bankruptcy law. This is what we call in the bankruptcy world as “a start.” The fact that they are even looking at it shows at least some passive interest in changing the code back to its prior intent.

A change that concerns a larger number of Americans is changes to section 308. It imposes reporting requirements on “small business debtors,” which are business debtors with less than about $2.2 million in debt. Section 308′s reporting requirements in its original form could have applied to small business debtors outside of chapter 11, even to self-employed individuals in chapter 7 or chapter 13. The change now clearly limits section 308′s application only to chapter 11. Because outside of chapter 11 the section 308 reporting requirements would have little purpose other than to harass a debtor, this change is definitely for the better.

They also fixed the double negative in section 1112(b)(2). If “cause” was established, the original wording required the court not to dismiss or convert a chapter 11 unless unusual circumstances existed showing that dismissal or conversion was not in the best interests of creditors. The double negative meant dismissal should happen only when it was bad for creditors.

National Bankruptcy

Looking at the numbers, they suggest that bankruptcy filings in November fell steeply from the previous month, down to 115,000 from 130,000 in October, the lowest monthly filing total since February of this year. But lets put this into perspective, October is historically a very high month for bankruptcies, if not the highest. So year-to-date filings for 2010 are still 9% higher than last year’s, but as we suggested above, it indicates a slowdown.

According to the National Bankruptcy Research Center, located in the Columbia University School of Law, filings this year to date amount to about 6000 filings per million individuals, about 1 in every 160 people in the United States. A few states (mostly in the south east) already have begun to see rates fall where as some states continue to experience sharp increases, even by comparison to the elevated filing rates of 2009.

Filings in Hawaii are 32% higher than in 2009 and 25% higher in California, Arizona, and Utah. In contrast, despite the nationally noteworthy high filings in and near Memphis, and Tennessee’s place near the top of 2010 filing totals, filings throughout Tennessee have fallen 7% since last year.

Filings have fallen by lesser amounts in West Virginia, South Carolina, Iowa, Alabama, Mississippi, Kentucky, North Carolina, and Michigan. Of the two parts of the country where bankruptcy filings spiked most notably during the recession, one (the Southeast) is recovering rapidly while the other (the Southwest) is falling into further distress.

Washington State Bankruptcies

Most of the state had a rise in bankruptcies, some counties more than others. Both Kitsap and Skagit counties took a real hit for their populations, rising more than 40% above the national average. But it was the big counties, Whatcom, Snohomish, King, and Pierce that showed the most promise. Snohomish and King were in single digit rises between 3% and 3.5% where as Whatcom had a whopping 22% fall in bankruptcies as compared to the same time last year. Pierce had an 18% rise, but that could be due to the lower than expected number of bankruptcies in October, a notoriously heavy month.

This fairly good news is in spite of the rising foreclosure numbers and reports from local news sources and the real estate community that the housing prices have stagnated in even the historically higher equity growth areas such as downtown Seattle and Tacoma. They speculate this stagnation will remain for several more months — stretching into 2012 — and this has lead to fears of further foreclosures as unemployment benefits dry up and hiring remains sparse.

Chapter 7 Bankruptcies

Chapter 7 bankruptcy is the bankruptcy of choice for most Americans despite the 2005 congress trying to essentially drown it in the bathtub. It allows debtors to relinquish their assets and walk away. Their credit is severely effected and most likely they won’t qualify for a fair loan for a long time, but they are not longer being harassed or under threat of garnishment. This gives American families an opportunity for a clean slate with which to begin their lives again.

Chapter 13 Bankruptcies

Chapter 13 bankruptcy is the type that allows consumers to make a deal with creditors under a legal agreement overseen by a judge. They agree to pay a certain amount of money per month over a set amount of time based on their current income and the creditor agrees to lower the debt to a fraction of the balance. This balance is usually based on the balance without the exorbitant fees and meteoric interest rates added due to late payment or outright creditor greed.

Seattle Bankruptcy Lawyers Helping Families

Bankruptcy creates immediate relief and arranges debts together so that they are easy to understand. It offers a reasonable solution to a highly stressful financial situation. The best scenario is to capture your debt and situation prior to being in foreclosure so that you have a few more options, but this is not required. If saving your house is the priority, or just coming out from under a bad situation, then looking into your bankruptcy options is probably the best thing you can do for your peace of mind.

If you or someone you know are drowning under a sea of debt due to credit cards and foreclosure there may be a way to get relief and begin a life where you can fulfill your professional and personal needs. Call Phillips Webster for a consultation on you bankruptcy options.

Learn More About:

• Chapter 13 Bankruptcy
• Chapter 7 Bankruptcy
• Bankruptcy Lawyer

For many people Fall means planning for the holidays, where you’re going to go for Thanksgiving and what kind of gifts your going to get the kids. Then there’s party planning, visiting relatives, and decorating, that’s why they call the holidays the most stressful time of the year. Especially when you sit down and budget this stuff out.

Millions of Americans sit down and sort their bills before the holidays and some realize that Christmas may not happen for the family. In fact, hundreds of thousands of families are facing that prospect this year. According to the National Bankruptcy Research Center, that trend is rising.

This is a national trend that is reflective of the overall economy. Some may say that bankruptcy is the easy way out for people who fail to plan and that they in some way “deserve” their predicament. Nothing could be farther from the truth. Bankruptcy protection is as important of an institution as Social Security or public works for that matter. It protects families during hard times to that they aren’t homeless, their children starve and drop out of school, and become criminals forever indebted to greedy creditors.

Now, honest and responsible Americans are faced with unemployment or under-employment, debts rising to sustain their family, and they are unable to seek employment elsewhere because their house value is so far under their mortgage value that they would permanently ruin their credit if they walked away. The creditors won’t stop calling. They are in serious trouble and finally it all has to stop or it will rip the family apart. That’s where bankruptcy comes in. It stops creditors and gives people breathing room to figure things out and perhaps save their house and their sanity. That’s why so many Americans are turning to it.

National Bankruptcy Trends

It began in 2007, the United States tumbled into a deep recession and bankruptcy filings throughout America have risen continually since. With unemployment figures flirting near 10%, bankruptcy filing also rose in October.

Nationwide, filings this year to date amount to about 9122 filings per million household, that comes out to be about 1 in every 110 households. That’s roughly 1 in every 175 Americans filing for bankruptcy. According to the National Bankruptcy research centre, October typically sees the highest filings of the year. But there is a light at the end of the tunnel because they say filings in October of this year were 3% lower than filings in October 2009.

The highest filing rates are concentrated in the Southwest and the Southeast. Thus, on a household-adjusted basis, Nevada has substantially more than twice the national filing rate (20,000 filings per million households this year). Georgia, California, and Utah follow with about 50% more than the national average (about 14,000 filings per million households this year). Six states had rates less than half the national average: Alaska, the District of Columbia, South Carolina, North Dakota, South Dakota, and Texas.

Another accelerating trend in the data is the sharp disparity in changes since last year. Where a few states (all in the South) already have begun to see rates fall after the recession, some states continue to experience sharp increases, even by comparison to the elevated filing rates of 2009. Thus, filings in southern states like Tennessee, South Carolina, West Virginia, Alabama, and Mississippi have fallen since last year. On the other hand filings in Hawaii, Arizona, and California have risen by more than 30%.

Chapter 7 Bankruptcy

The data continues to show a domination of Chapter 7 filings only 30% of the October filings sought relief under Chapter 13. In 2005 there was a big push in bankruptcy legislation to encourage consumers to choose Chapter 13 rather than Chapter 7. The reason for this push is because the 2005 congress was deeply and almost intimately in the pockets of the creditors.

You see, chapter 7 bankruptcy is when a person merely liquidates their assets and walks away, usually leaving creditors with little to show for their debt. Though this is now harder to do, people still prefer it. The creditors of course hate it but it is partially their own fault. Rather than taking the time to carefully examine and prequalify their borrowers, the creditors would rather dishonestly entice people into credit they don’t understand and then hold them over a barrel by stripping them of their constitutional rights though campaign contributions and gifts to ethically challenged politicians.

Chapter 13 Bankruptcy

The States with the highest share of Chapter 13 filings remain concentrated in the Gulf Coast. Thus, 62% of filings this year in Louisiana have been under Chapter 13, with similarly high shares in Alabama (56%) and Texas (50%). Many economists believe this to be reflective of the deep-water Horizon oil spill earlier this year.

Chapter 13 bankruptcies allow debtors to pay off some or all of their debts over an agreed period of time. This is very tough for families that are unemployed or under-employed because the whole point is that they cannot make their current payments. This bankruptcy also does not protect them from foreclosure and, regardless of whether they can pay the payment plan, they may lose their house anyway. Thus they often choose chapter 7.

Seattle Bankruptcy Lawyers Helping Families

Bankruptcy creates immediate relief and arranges debts together so that they are easy to understand. It offers a reasonable solution to a highly stressful financial situation. The best scenario is to capture your debt and situation prior to being in foreclosure so that you have a few more options, but this is not required. If saving your house is the priority, or just coming out from under a bad situation, then looking into your bankruptcy options is probably the best thing you can do for your peace of mind.

If you or someone you know are drowning under a sea of debt due to credit cards and foreclosure there may be a way to get relief and begin a life where you can fulfill your professional and personal needs. Call Phillips Webster for a consultation on you bankruptcy options.

Learn More About:

• Chapter 13 Bankruptcy
• Chapter 7 Bankruptcy
• Bankruptcy Lawyer

Americans today who are 55 years-old and up are facing a serious dilemma. They grew up in the last generation of single income households where they saw their parents supported by strong pensions and reap the benefits of a relatively robust economy and housing sector. The reality for retirees is far different today.

The recession has forced many people in Washington State and around the country into unemployment, washed away years of savings in both stocks and retirement plans, and dramatically reduced incomes during what historically were final high-earning years. Instead of looking forward to retirement and finally being able to relax after working for 40+ years, they’re looking at competing with a hungry generation with lower income requirements and more energy. They’re looking, losing, and facing bankruptcy.

Those at or close to retirement, even with college degrees, tons of experience, and a massive network, are still hamstrung by industries that can’t afford to hire. This forces them to compromise their credit by creating debt either through their home or through credit cards in order to merely stay afloat while the economy recovers. But time is not on their side and every year that passes, so does their chance of capturing that position that will help them recover and give them the nest egg they need to retire confidently.

Senior Bankruptcy

Statistics show that, like most Americans before the recession, older Americans were also piling on debt. From 2000 to 2008, the average debt for households headed by people 55 or older nearly doubled to $66,000, according to Strategic Business Insights, a consumer behavior research firm. Though this is lower than other younger households, this is a disturbing trend from previous generations who saved and eliminated debt in their later years.

This has caused the ranks of older bankruptcy filers to swell at an alarming rate. From 1991 to 2007, bankruptcy filings by those 65 and older increased by 150%, while filings in the 75-to-84 age group soared 433%, according to the Consumer Bankruptcy Project. Imagine being 10 years after retirement with declining health and facing a dire financial situation. It is frightening.

Older Americans, who have traditionally represented a small portion of people filing for bankruptcy, are finding their numbers continue to grow faster than those of younger Americans, according to the Consumer Bankruptcy Project. Debtors age 55 to 64 accounted for 16.9% of bankruptcy filers in 2009, up from 14.3% in 2007. When bankruptcy filers were asked what has caused their financial distress, in the 2009 report, 6.7% said “retirement,” up from 5.6% in 2007.

Causes of Senior Bankruptcy

Generally, older Americans consider bankruptcy a terrible stigma. They perceive it as somehow shirking responsibility and that they are somehow fully to blame for their situation regardless of the economy and unscrupulous business practices of lenders and creditors. As a result, retirement age Americans will do anything to juggle their finances, even relying on resources that could instead be protected from lenders if they had just chosen bankruptcy rather than needlessly deplete their savings.

• Credit – You see, the creditors make more money the longer debtors are on the hook, thus they will work against the debtor’s best interest while seemingly working with them to “help” them alleviate their debt. So while elder debtors think that they are smartly avoiding the stigma of bankruptcy, they are in fact paying the creditors more than they need to are possibly would have previously.

According to a study released in August by John Pottow, a professor of law at the University of Michigan Law School, more than 2/3 of older Americans who have filed for bankruptcy say credit cards are the reason.

• Family – Another problem that older Americans face is trying to keep their family afloat with funds that they don’t have or desperately need to survive through retirement. Their children are severely effected by unemployment and debt. Instead of recommending bankruptcy protection as an option, they allow perception cloud their judgment and bail out their children, only to find themselves going bankrupt.

As noble a deed it is to keep the whole family afloat, what many older Americans don’t realize is that bankruptcy is there to specifically protect families in the time of need so that the United States economy doesn’t collapse under the burden of personal debt and the future generations of American workers can have an opportunity to grow up in stable households.

• Medical Bills – Pottow took part in a congressional hearing last year in Washington DC over the issue and told members of the committee that among the senior bankruptcy filers, 39.1% said a medical problem of the debtor or spouse was the reason, while 32.5% said that medical bills were the cause. And 30.2% said that they had incurred more than $5,000 or 10% of their annual income in out-of-pocket medical bills.

Problems really arise because hospitals and clinics are happy to take credit cards, complicating the issues even more. Though there are alternatives and practical ways to pay for medical bills, such as a low-interest loan from a credit union or ask for assistance from family or friends. But, Pottow says, it’s possible that they prefer the anonymity of credit cards. This need for discretion comes at their detriment.

Seattle Bankruptcy Lawyers Helping Washington Seniors

Washington State seniors and older Americans around the country have seen America change so drastically and rapidly that it may seem like they live in a different country than the one they grew up in. The days of strong factory jobs, corporate loyalty, and financial security are long gone, replaced with a sharp rise in corruption, greed, and deregulation. This has left seniors caught in the middle.

Bankruptcy is a way to stop the creditors and slow everything down so that all parties can negotiate. It stops the harassing phone calls from creditors and, if caught early enough, may allow the individual or couple to avoid foreclosure. With quality council from an experienced bankruptcy attorney, clients have been able to figure out reasonable answers to their financial questions and finally be able to relax.

The bankruptcy attorneys at Phillips Webster have years of experience and will assess your bankruptcy options for little to no money down depending on your situation. They will be able to sit down with you face to face and explain clearly your legal options to make sure that you have a fresh start.

Call Phillips Webster today for a free initial consultation and to find out your next step.

Learn More About:

• Chapter 13 Bankruptcy
• Chapter 7 Bankruptcy
• Seattle Bankruptcy Lawyer

Many people ask what causes bankruptcies and that is both easy and hard to answer. Easy because there are some general causes that most bankruptcy cases have in common:
- Crushing Debt
- Health Issues
- Job Loss
- Divorce
- Catastrophe Not Covered By Insurance

What makes the question, what causes bankruptcies?, hard to answer is when you start listening to bankruptcy clients and their personal stories. After taking a good hard look at their situation, our team of bankruptcy lawyers have come to realize that every person’s story is different and that just lumping them into a statistic or treating everyone the same doesn’t work and also doesn’t do them justice.

Since the giant global downturn in 2007, one of the largest problems on the general list has been job loss. Job loss is one of the worst culprits on the list because it can cause so many other problems in sort of a trickle-down effect. Lack of healthcare can lead to serious and unchecked health issues. Job loss can also lead to crushing debt as individuals try to keep their families afloat. And often times, all of these problems culminate in divorce.

Bankruptcy can help with this. Bankruptcy protection is specifically called that so that families aren’t torn apart by circumstances that they can’t control or that have gotten out of their grasp. With national unemployment, according to the Bureau of Labor Statistics, holding steady at 9.6% and the Washington State unemployment rate just below that at 8.9%, many individuals and families in our state are turning to bankruptcy, as you’ll see.

National Bankruptcy Statistics

According to the National Bankruptcy Research Center at the Columbia University Law School, nationwide, filings this year to date amount to slightly more than 1 in every 98 households. This is drastically up from the past, but it is padded by some of the most economically depressed areas in the country that seemed to be most plagued with unemployment and foreclosure.

The highest filing rates are concentrated in the Southwest and the Southeast. Thus, on a household-adjusted basis, Nevada has substantially more than twice the national filing rate (23,000 filings per million households this year). The unemployment rate in Nevada is a whopping 14.4%, the highest in the country.

Other states such as Georgia, California, Utah, and Tennessee follow with about 50% more than the national average (16,000-17,000 filings per million households this year). But looking at the unemployment rates, though California is far above the national average, the high filing rate is not substantiated by the unemployment rates of the other states that are at or even below the national average. Utah, in fact, is a whole 2% below.

Seven states had rates less than half the national average and are actually scattered throughout the country. Generally in states remote from the aggressive lending activity that characterized the bubble of the last decade: Alaska, the District of Columbia, South Carolina, North Dakota, South Dakota, Texas, and Vermont. These states also fall at or well below the national unemployment rate.

Washington State falls in the middle of these numbers, as with most categories, because that seems to be the way things go in our state with almost everything from birth rates to literacy rate. But, being the lowest in bankruptcies would only mean we’re the highest in something else, like flesh eating bacteria victims, which is no good for anyone. Middle of the road suits us well.

Washington State Bankruptcies

Overall in the state, September bankruptcies are still up from August, and sharply up from the same time in 2009. This is bad news for some of the more populated counties, but some of the lower populated counties like Grays Harbor, Pacific, and San Juan saw considerable declines from August. This is good for them, because throughout the year they haven’t been fairing as well, particularly Pacific County, which had a 400% increase in bankruptcies last month as compared to last year.

The largest rise was in Jefferson County with a 44% rise this month. The rest of the state just saw modest rises between 15% and 30%. In most cases, for smaller counties this could be one or two more than last month or last year, but in counties like King, Pierce, or Snohomish, that could mean a difference in hundreds.

WA Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the type of bankruptcy that the 2005 congress tried to crush through federal legislation in order to appease their handlers in the banking industry. It didn’t work and chapter 7 bankruptcies still far exceed chapter 13. The reason why the banking industry hates this type of bankruptcy is that it allows debtors to sell their major assets and walk away. The biggest problem creditors have is that, unlike wealthy people who own banks, most people don’t have a ton of assets.

WA Chapter 13 Bankruptcy

Chapter 13 bankruptcy is considered the best type for people who are gainfully employed and are able to renegotiate their debt. It allows them to make payments toward that debt and walk away after the debt has been cleared. As you can see by comparing the charts, people are far less likely to choose Chapter 13.

Seattle Bankruptcy Lawyer Helping People of WA

These numbers don’t lie. They show that there are individuals and families in Washington State that are in desperate need of a way to stop harassing phone calls from creditors and to help avoid foreclosure on their house. Phillips Webster has a team of legal professionals ready to listen to your needs and to help you with your financial set backs so that you can start fresh.

If you or someone you know are drowning under a sea of debt due to credit cards and foreclosure there may be a way to get relief and begin a life where you can fulfill your professional and personal needs. Call Phillips Webster for a consultation on you bankruptcy options.

Learn More About:

• Chapter 13 Bankruptcy
• Chapter 7 Bankruptcy
• Bankruptcy Lawyer