Bankruptcy Knoxville

As a follow up to our last post about the Sun Belt recession this article from the Wall Street Journal shows a direct correlation between the housing bust and personal bankruptcies. The two are a natural fit considering how dramatically the fall in housing prices hurt family finances. Here’s an excerpt:

“There’s a close relationship between high levels of household debt, including mortgage debt, and bankruptcy filings,” said Samuel J. Gerdano, executive director of the American Bankruptcy Institute, a research organization made up of attorneys, accountants and other bankruptcy professionals. “That…has been exacerbated by the bursting of the housing bubble.”

In Arizona and Nevada, where bankruptcies increased most, filings skyrocketed by 79.6% and 59.5%, respectively. Nearly 6.2% of mortgages in Arizona and 9.4% of mortgages in Nevada were in foreclosure by the end of the third quarter of 2009, according to the Mortgage Bankers Association.

California saw personal bankruptcy filings rise 58.8% last year. At the end of the third quarter, some 5.8% of loans were in foreclosure there.

Not everyone who goes through foreclosure ends up in bankruptcy and not every bankruptcy is driven by foreclosure. Some states with relatively few foreclosures, such as Utah and Wyoming, had larger increases in personal bankruptcies than Florida, the scene of lots of foreclosures.

Call us today if you would like a free consultation about your bankruptcy case.

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There have been a lot of positive signs that the economy may be recovering. That’s good news for everyone. But across much of the country that recovery means little to every day people. This is especially true in the so-called Sun Belt across Nevada, Arizona, and California. A perfect example of this is in Nevada where technically the unemployment rate has gone down lately. But the reality is that many people are too discouraged to look for work or have left the state. In other words, the employment numbers alone don’t tell the whole truth. ABC News says the following:

In Riverside County, Calif., the nation’s 11th-most economically stressed county, unemployment dipped slightly in November. But that was due mainly to seasonal hiring by retailers — hiring that didn’t extend past the holidays.

Likewise, unemployment in counties in Arizona and Nevada, two states hammered by the recession, also dropped in November — but only because they lost jobseekers who moved away or gave up hope. Once people stop looking for jobs, they’re no longer counted as unemployed.

“Our rate isn’t going down because the economy is improving,” said Jered McDonald, an economist with the state of Nevada, which has lost about 2.5 percent of its work force since September. “It’s going down because people are either too discouraged to look for work or they’re actually leaving the state.”

The AP’s Economic Stress Index found that the average county’s score for November was 10.2. That was down only slightly from the worst reading during the recession: 10.3 in March 2009.

While East Tennessee hasn’t been hit quite as hard as the Sun Belt, plenty of people are hurting here as well. Bankruptcies continue to be historically high.

Do you need help filing for bankruptcy? Call the bankruptcy attorneys Knoxville trusts for a free consultation about your case. We’re here to help.