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In: Business and Management

Submitted By peteronk
Words 401
Pages 2



No. 1 reason: Real estate - related debt driving recent increase in personal filings, not only locally but countrywide.

Statistics: 2010 – San Diego and Imperial counties handled bankruptcy petitions: 22,831 individuals and 678 businesses – 22% increase from the previous year and more than triple before the recession began.

Nationally: 1.6 million in 2010 – 14% increase over the previous year but below the 1.8 million in 2005.

What kind of situation would make a person a good candidate for bankruptcy?

- Chapter 7: People who lost their job and many months behind on their mortgage payments and were in foreclosure, and had a significant amount of credit card debt – no other viable alternatives other than bankruptcy to get back on their feet.

- Chapter 7: Fresh start in life – keep most, if not all, of their basic assets such as their homes, vehicles, furniture, clothing, jewelry and retirement funds and pay nothing to any of their creditors.

Main reasons for filing bankruptcy:

- Before the recession – medical debt incurred by people without health insurance, a divorce, or a death of a spouse that would lead to bankruptcy.

- Now – with the economic downturn… loss of a job, cutback in work-hours, reductions in commissions and bonuses, and a steep decline in customers for small businesses.

How does real estate issue relate to bankruptcies?

- Chula Vista has been described as the “foreclosure central” in San Diego County… families borrowing money from credit cards, withdrawing money from their 401(k)s, and selling off other assets to make mortgage payments.

Bankruptcy filing: A typical Chapter 7 bankruptcy filing can cost between $1,900 - $2,900.00… takes about three months from start to finish.


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