San Diego Chapter 13 Bankruptcies Rise Again in Q3 2009
February 17, 2010 · Filed under Bankruptcy
Before Q4 2009 data is released on Chapter 13 filings in San Diego, let’s take a look back at the Q3 2009 numbers to see what we can expect in next month’s release.
If you recall in previous articles on bankruptcy data in San Diego, attorney Cecilia Chen noted that she expected Chapter 7 and 13 fillings to increase. Turns out she was right.
Families are coming in more and more to file for Chapter 7. They generally do not have enough income to qualify for Chapter 13.
I do think that Chapter 7 and 13 bankruptcy filings will continue to increase in year 2010 and beyond because unemployment has not abated and we are currently in a false sense of stability. Next year, government interventions will start to disappear, shadow inventory (houses that banks now hold but have yet to put up for sale) will hit the market and mortgage rates will start to rise. I’m also seeing credit card companies are also increasing the interest rate and minimum monthly payments, creating a significant hardship on many families in San Diego.
Although there have been increases in filings in both Chapter 7 and 13, the rate at which people are filing has in fact flat-lined.
The increase in the total number of Chapter 13 fillings for the San Diego area, depicted in the graph above, highlights that the growing trend continues. However, that growth may have flatlined and perhaps in Q4 2009 we can expect a slight decline in total % increase of claimants.
Every new quarter there’s on average over 11% increase compared the previous quarter. Q3 2009 saw a total of almost 3000 (2966) claimants file for Chapter 13 protection. That’s a 13% increase over the previous period. You can see from the chart below that although claimants increased by just over 300, the total % increase remained the same.
| Date | Q1 | Q2 | Q3 | Q4 | |||
| 2006 | 1,412 | -15% | 1,203 | -14% | 1,032 | -8% | 945 |
| 2007 | 1,108 | 18% | 1,304 | 11% | 1,448 | 9% | 1,572 |
| 2008 | 326 | 437% | 1,751 | 11% | 1,936 | 7% | 2,080 |
| 2009 | 2,314 | 13% | 2,620 | 13% | 2966 |
It’s tough to make any hard conclusions from the data which makes quarter 4 2009 data even more interested as it will give us a better indication on how San Diego is doing coping with the recession and their mounting debt. What we can expect from Q4 are new highs in both Chapter 7 and 13 filings, but the question of whether that growth is decreasing will be the focus.
Stay tuned to CCLegalGroup’s coverage of Q4 Chapter 13 data as it becomes available, we’ll release it as soon as we can.
If you’re in the San Diego area and have further questions about Chapter 13 bankruptcy proceedings contact Cecilia Chen with your questions.
* All data, not including graphs, are courtesy of RAND California.
