Nationwide Consumer Bankruptcy Filings Rise 11%

Nationwide, consumer bankruptcy filings rose 11% in the first three quarters of 2010, as compared to the same period in 2009. Interestingly, the filings in the Eastern District of California (approx. Bakersfield to Redding, includings Fresno) were up 23.4% through August 2010. Bankruptcy filings in the Fresno Division were up 20.4%.

Tracking the year over year statistics for filings in the Eastern District is interesting. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”), supposedly making it harder to file bankruptcy, went into affect in October 2005. That year, driven by concern regarding BAPCPA, the number of bankruptcy cases filed spiked to 37,080. In 2006, they dropped to a low of 8,900 and the number of bankruptcy filings have been rising exponentially ever since. In 2007, it was 17,397, a 95% increase over 2006. In 2008, it was 31,080 (a 79% increase over 2007) and in 2009, 45,923 (a 48% increase over 2008 and a 24% increase over the “spike” year of 2005). If the last four months of the year match the monthly filings of the first four months of the year, the number of bankruptcy case filings would be 55,487.

One of the things I have noticed with all of the new case filings is a lot of new attorneys getting into bankruptcy practice, and more and more out of area attorneys trying to practice bankruptcy in Fresno. While there is nothing wrong with this in principle, many of these attorneys are not willing to do what it takes to adequately represent clients in Fresno. Potential bankruptcy filers should be leery of hiring an attorney over the internet and should make every effort to meet face-to-face with the attorney. If the attorney cannot meet face-to-face with you in Fresno, how are they going to appear with you at the 341 meeting of creditors or at a court hearing? The answer is that they probably will not be able to do so and you will likely end up with a stand-in, who may or may not know much about your case.