San Diego Chapter 13 Bankrupty Numbers Reach New All Time High
June 16, 2010 · Filed under Bankruptcy
Chapter 13 bankruptcies for the San Diego area have hit another all-time high in the first quarter of 2010 reaching a staggering 3,773 claims, an increase of almost 10% over the last quarter.
More and more people from San Diego are declaring both primary forms of bankruptcy (Chapter 7 and 13) which doesn’t lend support that the local economy is on the recovery track as of yet.
Chapter 13 bankruptcy offers the debtor a chance to restructure their debts and catch up on areages and back taxes over a 3-5 year repayment period. This differs from Chapter 7 which is far more evasive. Protecting your assets is crucial when you’re faced with the prospect of declaring bankruptcy. Many consumers are unaware of the options they have to protect, among other assets, their most important–their homes. Ensure you contact a legal professional with bankruptcy experience to protect your financial assets.
Cecilia Chen noted back in March 2010, when Q4 2009 data was released that:
Government interventions introduced this year 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. We’re not expecting bankruptcies to slow.
So far the observation is correct.
The Fed may raise interest rates this year putting new home owners and those whose mortgages need to be restructured, along with those with a variable rate, in additional pressure as well.
However, the news may not be all bad. When observing the increasing trend of Chapter 13 claims the number is in fact decreasing
Q4 2008 to Q1 2009 = 11.25%
Q1 2009 to Q2 2009 = 13.22%
Q2 2009 to Q3 2009 = 13.21%
Q3 2009 to Q4 2009 = 16.42%
Q4 2009 to Q1 2010 = 9.27%
What do these numbers mean? The percentages represent the increase in claims between the two periods. Although the number of claims increased in Q1 2010, the number of additional people filling claims decreased. For example, from Q3 to Q4 2009, 487 additional claims were made. Whereas in the period between Q4 2009 and Q1 2010, 320 additional claims were filed.
We’ll have to await Q2 2010 data to emerge in October before we’ll be able to tell for sure whether this downward trend continues.
All data sets compiled from Rand California.
