Bankruptcy filings for the year through May 2010 are up over 9% nationwide as compared to filings through the same time last year. From January 2010 to May 2010 there were 136,142 consumer bankruptcy filings nationwide as compared to 124,838 at the same time last year. The increase is likely attributed to the high unemployment rate and tight credit restrictions of banks. Although filings have increased when compared to last year’s numbers, there was an overall decline nationwide in filings from April 2010 to May 2010. Filings in April were approximately 145,000 as compared to 137,000 in May 2010. The two states with the highest filings are Nevada and Georgia. Some states have experienced a decrease in filings when compared to last year. States such as Tennessee, South Carolina, Alabama, and West Virginia have all seen the number of filings drop. However, states such as Arizona and California have seen an increase in filings this year by 43% and 36% respectively. Filings for the year are projected to reach the records set in 2005 when over 2 million households filed for bankruptcy.
If you have any questions, please contact David Yunghans directly at 513.723.2211 or via email at dyunghans@weltman.com.
2009 brought us increased bankruptcy filings. The number of filings approached the levels of 2004. 2009 saw 1.4 million consumer filings. Approximately 71% of the filings were Chapter 7’s and 28% were Chapter 13’s. Less than 1% were Chapter 11 filings. The first two months of 2010 has seen a continuation in the increased number of cases. According to the American Bankruptcy Institute, over 111,000 filings were made in February. That represented a 14% increase over February of 2009. It also represented an increase of over 9,000 filings from January 2010. March may well be a signal of what we can expect during the rest of the year.
2009’s statistics continue to show the trend where the majority of Bankruptcy cases are being filed. The 9th circuit, which includes California, Arizona and Nevada, saw 324,000 filings. The 6th Circuit, which includes Ohio and Michigan, was second with close to 214,000 consumer filings. The 11th Circuit, which includes Florida and Georgia, was third, with 198,000 filings. When looking at specific states, California led the way, followed by Florida, Ohio and Michigan. These are the states that are seeing the highest number of foreclosure filings. Of the 50 United States, Alaska had the fewest followed by Wyoming.
As the number of foreclosures increase, so should the number of bankruptcies. WWR will continue to monitor the trends and keep you updated as to the status of filings across the country.
If you have any questions, please contact Alan C. Hochheiser, Esq. Alan is the managing partner of the Bankruptcy Practice Group and is located in the Brooklyn Heights office of Weltman, Weinberg & Reis Co., L.P.A. He can be reached at 216.739.5649 or via email at ahochheiser@weltman.com.
On February 23, 2010, it was announced that the Bankruptcy Court for the Northern District of Ohio will begin utilizing new forms for the filing of Relief from Stay Motions in Chapter 7, Chapter 13 and Chapter 11. The forms will need to be used for any motions filed on or after April 1, 2010.
The Bankruptcy Courts affected include: Cleveland, Toledo, Akron, Canton and Youngstown. The new forms will require much of the same information as had been provided by creditors previously. However, the forms will require greater specificity as to the calculation of the total balance and arrears owing on a loan, as well as a more structured and detailed analysis of a creditor’s right to enforce the Note, Mortgage or Security Agreement.
No new forms will be required by creditors filing only for Abandonment. In addition, no new forms were created for the submission of agreed or stipulated orders.
The Bankruptcy Department at WW&R is reviewing the new forms and will provide a more detailed analysis in the coming weeks. If you have any questions, please contact Mr. Scott Fink, Esq. Scott is an Associate in the Bankruptcy department of the Brooklyn Heights office of Weltman, Weinberg & Reis Co., LPA. He can be reached at 216.739.5644 or via e-mail at sfink@weltman.com.
Bankruptcy filings for January 2010 are up 15% from January 2009. There were a total of 102,600 bankruptcy filings in January 2010 as compared to 89,000 in January 2009. Overall in 2009 there were a total of 1,434,600 bankruptcy cases filed. These figures are approaching the record set in 2005 when over 1,600,000 cases were filed. Bankruptcy filings in 2010 are expected to increase throughout the year and eclipse last year’s total filings. Total filing numbers are taken from, “The Bankruptcy Database Project at Harvard (http://bdp.law.harvard.edu) in cooperation with Automated Access to Court Electronic Records (AACER).
With the commercial real estate market in a continued pattern of free fall, coupled with the still-lagging economy overall, creditors are likely to see a continued increase in overall bankruptcy filings for the foreseeable future. For every strip mall or office park that watches as long-time, valued tenants vacate their spaces, there are landlords who cannot service the debt on their property due to an overall decrease in rental income, and there are small business owners now joining the ranks of the newly-unemployed, along with their employees.
The unfortunate trickle down sees both employees and small business owners seeking bankruptcy protection, along with a growing number of commercial property owners who are unable to find replacement tenants to make up the shortfall in rental income.
Additionally, those tenants remaining behind may see a lag in business as a result of the loss of “anchor stores” which attracted casual shoppers to the area. This point was driven home by the recent Chapter 11 filing by Movie Gallery, Inc., the operator of the Hollywood Video chain. Preliminary indications are that a “significant number” of Hollywood Video stores will be shuttered in the coming months, leaving hundreds of strip malls across the country without a valued tenant.
The Bankruptcy Department at Weltman, Weinberg & Reis will continue to monitor trends in bankruptcy filings and will update you as data becomes available.
