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Updates From the Bankruptcy Front
• Bankruptcy Filings Through First Three Quarters of 2007 Eclipse Last Year's Totals
• Suite Solutions and Coast to Coast Information Services Join Forces
• When the American Dream Turns Into a Nightmare: Consumers Seduced by Subprime Loans Should Go Forward with Eyes Wide Open
• Short, sweet and simple.
• Why don't all bankruptcy attorneys order consumer credit reports?
• NOVEMBER 2008 CONSUMER BANKRUPTCY FILINGS INCREASE 39 PERCENT OVER LAST YEAR
NOVEMBER 2008 CONSUMER BANKRUPTCY FILINGS INCREASE 39 PERCENT OVER LAST YEAR
“While new bankruptcies dipped slightly in November from the yearly high reached last month, we are still on track for nearly 1.1 million new cases this year, the highest figure since Congress changed the bankruptcy laws in 2005,” said ABI Executive Director Samuel J. Gerdano. “We expect the alarming rate of personal bankruptcies to continue well into 2009.” Read more…
Source: American Bankruptcy Institute
Bankruptcy Filings Through First Three Quarters of 2007 Eclipse Last Year's Totals
November 19, 2007, Alexandria, Va.— The 623,399 total U.S. bankruptcies filed during the first three quarters of 2007 (Jan. 1 – Sept. 30) represented a 40.16 percent increase over the 444,789 cases filed over the same period in 2006, according to data released today by the Administrative Office of the U.S. Courts. The totals for both consumer and business filings during the first three quarters of 2007 also eclipsed those reached for the full calendar year of 2006.
“Bankruptcies are up sharply from a year ago this period, reflecting a growing vulnerability in household economics,” said ABI Executive Director Samuel J. Gerdano. “The continued stress on the housing market will likely fuel a continuation of this trend into 2008.”
Filings by individuals or households with consumer debt increased 40.15 percent to 603,139 for the nine-month period ending Sept. 30, 2007, from 430,364 filings during the same period in 2006. The overall percentage of consumers filing for chapter 13 protection fell slightly from 41.41 percent during the first three quarters of 2006 (Jan. 1-Sept. 30) to 38.87 percent over the same period in 2007. Conversely, the percentage of chapter 7 consumer filers increased to 61.06 percent during the first nine months of 2007 from the 58.50 percent recorded during the same period of 2006.
Business filings for the nine-month period ending Sept. 30, 2007, totaled 20,260, representing a 40.45 percent increase over the similar nine-month 2006 total of 14,425. Chapter 7 business liquidations totaled 13,290 in the first three quarters of 2007, a 57.60 percent increase over the 8,433 business chapter 7 filings during the same period in 2006. Chapter 11 business reorganizations also rose from 3,644 in the first three quarters of 2006 to 4,130 in the same period of 2007, a 13.34 percent increase.
The 801,269 total filings for the 12-month period ending Sept. 30 were down 28 percent from the same period in 2006, which totaled 1,112,542 filings, a figure that includes a surge in cases filed before the implementation date of a major change in the law in 2005. The bankruptcy filing rate per thousand U.S. residents totaled 2.62 for all chapters during the 12-month period ending Sept. 30, 2007, as 1.58 Americans per thousand filed for chapter 7 while 1.02 per thousand filed for chapter 13 bankruptcy. Tennessee was the state with the highest per capita filing rate in the country, with 6.19 residents per thousand filing in all chapters, and also had the highest per capita filing rate for chapter 13 filings at 3.86. The state with the highest per capita filing rate for chapter 7 bankruptcy was Indiana at 3.20 per thousand for the 12-month period ended Sept. 30, 2007.
Nonbusiness filings for the 12-month period ending Sept. 30, 2007, totaled 775,344, down 28.55 percent from the 1,085,209 total nonbusiness filings experienced over the same period in 2006. Business filings for the 12-month period ending Sept. 30, 2007, totaled 25,925, down 5.15 percent from the 27,333 bankruptcy petitions filed in the 12-month period ending Sept. 30, 2006.
The 484,162 total chapter 7 filings for the 12-month period ending Sept. 30, 2007, represent a 41.89 percent decrease from the 833,147 filings from the same period in 2006. Chapter 11 filings also declined, falling 1.92 percent to 5,888 in 2007 from 6,003 in 2006. Chapter 12 filings decreased as well, falling 4 percent from 376 in 2006 to 361 in 2007. However, total chapter 13 filings increased 13.87 percent to 310,802 in the 12-month period ending Sept. 30, 2007, from 272,937 in the same period last year.
BUSINESS FILINGS for the 3-month period ending Sept. 30, 2007, totaled 7,167, up 35.64 percent from the 5,284 bankruptcy business cases filed in the same period in 2006. NON-BUSINESS FILINGS for the 3-month period ending Sept. 30, 2007, increased 27.66 percent from 165,862 in 2006 to 211,742 in 2007.
The chapter* breakdown of BUSINESS filings for the 3-month period ending Sept. 30, 2007, is: 4,816 chapter 7s, 1,410 chapter 11s, 71 chapter 12s and 844 chapter 13s.
The chapter breakdown of NON-BUSINESS filings for the 3-month period ending Sept. 30, 2007, is: 127,192 chapter 7s, 173 chapter 11s and 84,376 chapter 13s.
ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 11,500 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.
*Definitions from Bankruptcy Overview: Issues, Law and Policy, by the American Bankruptcy Institute
Chapter 7 of the Bankruptcy Code is available to both individual and business debtors. Its purpose is to achieve a fair distribution to creditors of the debtor’s available non-exempt property. Unsecured debts not reaffirmed are discharged, providing a fresh financial start.
Chapter 11 of the Bankruptcy Code is available for both business and consumer debtors. Its purpose is to rehabilitate a business as a going concern or reorganize an individual’s finances through a court-approved reorganization plan.
Chapter 12 of the Bankruptcy Code is designed to give special debt relief to a family farmer with regular income from farming.
Chapter 13 of the Bankruptcy Code is available for an individual with regular income whose debts do not exceed specific amounts; it is typically used to budget some of the debtor’s future earnings under a plan through which unsecured creditors are paid in whole or in part.
Suite Solutions and Coast to Coast Information Services Join Forces
Coast to Coast Information Services, a leading provider of online credit reports and tax transcripts for bankruptcy practitioners, will merge with Suite Solutions effective November 1, 2007. Coast to Coast president and founder Ian Winterbotham will continue to be the representative for Coast to Coast customers.
“We’re delighted that friendly competition has turned into friendly collaboration,” said Candy Marshall, Suite Solutions president. “We look forward to serving the hundreds of loyal customers that Coast to Coast has attracted since its beginnings in 1999.”
“This move is very good news for Coast to Coast customers,” Winterbotham said. “Now, for the first time, our customers will receive merged, 3-bureau credit reports and a full line of due diligence services. They’ll be able to download liability information directly into any of the leading bankruptcy software programs. All these advantages save time and hassle for busy bankruptcy professionals.”
Coast to Coast customers will need to complete new Service Agreements to receive Suite Solutions services. The forms were mailed to all customers, and may also be found at this site in the Membership Suite.
When the American Dream Turns Into a Nightmare: Consumers Seduced by Subprime Loans Should Go Forward with Eyes Wide Open
09.18.07, 11:48 AM ET
LOS ALAMITOS, Calif., Sept. 18 /PRNewswire/ -- Subprime lending practices in recent years have left thousands of families with mortgages they can't afford, on houses that have lost value. The Center for Responsible Lending, a nonprofit research and policy organization, has projected that 2.2 million homeowners will lose their homes to foreclosure nationwide. As selling and refinancing both become more difficult, many people are being forced to declare bankruptcy in order to avoid foreclosure.
And bankruptcy is the last place most of them ever expected to find themselves.
"The people filing today are more educated and more sophisticated," said bankruptcy attorney Robert A. Higgins of Benbrook, TX. "Money has been so loose that people have bought houses they can't afford."
Filing bankruptcy is one way to keep a roof over one's head. When a homeowner files a Chapter 13 bankruptcy the mortgage lender must stop any pending foreclosure, if the bankruptcy is filed before the final foreclosure deadline.
People who didn't ask enough questions or read the fine print when they obtained their mortgages stand a better chance of getting on their feet if they approach bankruptcy better informed and better represented, according to Candy Marshall, president of Suite Solutions (www.suitesolutions.info).
"Choosing a good bankruptcy attorney is extremely important. This is one area where experience really counts," said Marshall, whose Los Alamitos, CA- based firm provides online credit reports and services to bankruptcy attorneys around the country.
"It's not like finding a good doctor or a good decorator," she points out. "Most people who find themselves in this position are not going to be asking around at cocktail parties and kids' soccer games for a referral. They don't know where to look or what to look for in finding the professional guidance they really need at this point."
Bankruptcy practice has a bit of a stigma, according to attorney Higgins.
"People resort to looking in the phone book and watching late night TV commercials," he said. "People facing bankruptcy often find themselves up late at night."
From Marshall and some experienced bankruptcy practitioners, here are tips for not getting burned another time:
Don't make assumptions. The bankruptcy reform law of 2005 has created confusion in the minds of consumers, said Jeffrey Tromberg of the Florida Debt Relief Center in Fort Lauderdale, FL. "Many people assume that they can't file bankruptcy," he said. Some believe that they will not be able to keep their house or other possessions. Some are under the impression that if they file Chapter 13 they will have to pay all their creditors in full. And many others assume that bankruptcy is their only alternative, when they may have better options.
Do a little research. Consumer-oriented information about bankruptcy abounds on the web. A few places to look: www.bankruptcyhome.com, www.totalbankruptcy.com, www.BankruptcyAction.com and www.billsbills.com. Many sites contain contact information on bankruptcy attorneys, by state.
Don't shop for the lowest price. "What matters more is finding an attorney that specializes in consumer bankruptcy law," Candy Marshall said. "Attorneys who handle high numbers of bankruptcies every year tend to be the best informed about the law, have the best advice to provide, and run the most efficient bankruptcy practices. These factors combine to give you the best value in the long run."
"If you only shop price, what you get is young and inexperienced, or else guys who hire the work out," Robert Higgins said. "When people go for the lowest price, they don't get the results they want."
Don't delay. If you're finding yourself unable to make your mortgage payments, it's time to take action. State laws vary, but in some states the lender can demand that the entire loan must be repaid if there is one missed payment. The house can be foreclosed in 21 days in a non-judicial property state.
"It's better to get professional help before you really get in a bind," Higgins said. "An experienced bankruptcy attorney can help you protect your property and look at alternatives to bankruptcy."
Choose wisely. Most bankruptcy attorneys offer a free initial consultation. Once you have a short list - perhaps referrals from your family attorney, your CPA, your state's bar association, or names you have gathered online -- call for an appointment. Be prepared to give the attorney a concise picture of your financial situation. And don't hesitate to ask questions of your own. How many bankruptcy cases does the attorney handle each year? How does the attorney keep him or herself informed about new developments in the industry and in the law? What measures does the firm take to keep costs down for clients? How will you be sure that bankruptcy really will wipe the slate clean, and give you a fresh start?"
"I've seen it so often, people finding out well after the bankruptcy has been discharged that there are still liens and liabilities outstanding," Marshall said. "The way they find out is when they try to buy a home or a car and their credit is checked. Then they can't get the favorable interest rates they were counting on, or they may not be able to get the loan at all."
Marshall advises everyone who files bankruptcy to obtain their own free credit reports 60 days after the bankruptcy discharge. Consumers can obtain a free credit report once every 12 months. www.annualcreditreport.com.
The best way to be sure that all creditors are listed on the bankruptcy petition is for the debtor to authorize the bankruptcy attorney to get credit reports that include information from all three national credit bureaus - Experian, TransUnion Equifax, as well as public record information, she said.
"Credit reports are an important safety net," Tromberg said, "and getting the downloadable reports through Suite Solutions is something that allows us to keep our costs down because it eliminates the need to manually enter all that information on bankruptcy petitions."
"Prior to the law change if a debtor mistakenly left a creditor out they still had the opportunity to receive a discharge under most circumstances," Higgins said, adding that bankruptcy court judges have become much stricter since the 2005 reform law. "Now it's very important that people run through all the traps and list all creditors. I would say that not obtaining credit reports for clients approaches malpractice."
Consider chemistry. Finally, as in engaging any professional, compatibility counts. If you feel uncomfortable with the first attorney you talk to, if the personality grates or the values expressed raise a red flag, keep looking. As Jeffrey Tromberg says, "When filing chapter 13, you're going to be married to your attorney for up to five years."
Media Contact: Candy Marshall President of Suite Solutions 877-311-1234 candy@suitesolutions.info SOURCE Suite Solutions
Short, sweet and simple.
That’s how one Suite Solutions member described the site visit and certification process required by Equifax in order to release their consumer credit information directly to bankruptcy attorneys.
The new Equifax policy makes it possible for Suite Solutions to provide certified bankruptcy practitioners with information from Experian, TransUnion and Equifax in a merged report. Formerly, the Equifax information could only be sent to the consumer, and attorneys had to check with their clients to get any liability information not included by TransUnion and Experian. Research showed that more than 85% of credit reports were missing information when the Equifax data was not included.
“The visit didn’t last 10 minutes,” said Teresa Whittenberger, office manager at Anthony Adolf, PC in Fort Wayne, IN. “Having all three bureaus in the credit reports is wonderful. It’s well worth the minor inconvenience of getting certified.”
“It’s no big deal,” said Anna Brownson, office manager at Ronald L. Brownson, Attorney at Law in Upland, CA. “The inspector was here about 15 minutes. He asked some questions, looked at our business license and took pictures. And now I can import the information from all three bureaus straight into my bankruptcy program.Why don't all bankruptcy attorneys order consumer credit reports?
When Suite Solutions President Candy Marshall participated in a panel discussion at the NACTT annual seminar in Denver this summer, she heard one attorney’s view. Panelist Jeffrey Tromberg, whose practice is the Florida Debt Relief Center in Ft. Lauderdale, said that the old school of thought was not to order credit reports on behalf of the client, but to have the client bring in all their bills and papers in a shoebox. The thinking was that ordering reports made things too easy for the debtor.
To Mr. Tromberg, that kind of thinking is clearly outdated. He said he requires that all his bankruptcy clients authorize him to order their credit reports. And these days, incorporating all that information into the debtor schedules is easy, he noted. He mentioned Suite Solutions as a ready source of credit reports that can be downloaded straight into bankruptcy preparation software, eliminating the hours of typing that used to be required.
The 41st Annual NACTT Seminar was held in Denver, CO June 29-July 2, 2006. The discussion in which Jeffrey Tromberg and Candy Marshall served as panelists was on The Impact of Bankruptcy Upon the Fair Credit Reporting Act.