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United States Economy has Brighter Future in 2012

Seal of the United States bankruptcy court. Ch...

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If Americans use bankruptcy filings as an indicator of how the economy is faring, then there is a brighter economical future for the United States in 2012. Bankruptcy filings steadily fell across the board in the United States in 2011 and may be effecting its economy. That might be an indicator for bankruptcies and a brighter future in 2012.

2011 National Bankruptcy Statistics

According to the American Bankruptcy Institute, bankruptcies fell 12 percent in 2011 compared to 2010. There were 1.38 million United States filers in 2011, including about 74,000 commercial filings. The rest of the filers were individual consumer filings.

A couple of the more notable states with declining bankruptcies for 2011 include Hawaii and Arizona.

Hawaii 2011 Bankruptcy Statistics

In Hawaii, bankruptcy filings fell for the first time in five years, coming from double digit increases every year since 2007. U.S. Bankruptcy Court statistics showed there were 3,325 cases filed in Hawaii during 2011, down 15.9 percent from 2010. According to the TransUnion Credit reporting agency, credit card debt also declined from a high of $6,000 per card holder in 2009 to $4,800 per card holder in 2011 economy. Credit card debt is an indicator for potential bankruptcy within the economy.

Arizona 2011 Bankruptcy Statistics

In the state of Arizona, bankruptcy filings also dramatically declined, especially in the heavily populated metropolis of Phoenix. According to an American Bankruptcy Institute news article, there were “1,577 new bankruptcy cases in December, down 33.1 percent from December 2010 and the smallest total since February of 2009. For the Year in Phoenix, bankruptcies eased to 26,252 bankruptcies, down 15.9 percent from 2010.”

All of Arizona filings were down in December by 30.6 percent from 2010, and the filings were down 15.6 for the full year of 2011 compared to 2010.

Possible Reasons for the Decline in Bankruptcies

Hawaii’s and Arizona’s state bankruptcy statistics are examples of what is happening in most places across the United States concerning bankruptcies. The given reasons for this decline are myriad.

The reasons for bankruptcy filings decline can range anywhere from most of the bankrupt have already gone through the bankruptcy system to debtors not being able to pay their lawyers. Some speculate that debtors are selecting to hold onto their credit ratings as long as they can by trying debt settlement, while others speculate that money has tightened, and it is harder to obtain credit. Some even suggest the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has added too much in cost for filing, thus deterring potential filers.

Bankruptcies and a Brighter Future

While all of these speculations have some merit, there is merit in the belief that things economically in the United States is slowly beginning to turn around. Bankruptcy’s brighter future for 2012 may include less bankruptcies because the economy is getting better. Jobs are slowly beginning to increase, the housing market is slowly beginning to get better. All of these are signs of potential better times economically for the United States.

There will still be a significant number of bankruptcies filed in 2012, but there will always be a significant number of bankruptcies filed as long as the United States remains a free market capitalistic system. Bankruptcy filings enable the continuation of a healthy market place. Under bankruptcy, poor financial transactions end, and new financial transactions begin fresh, just like the new year.

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Can You Afford to File for Bankruptcy?

Strangely enough, many people don’t file for bankruptcy protection because they think they cannot afford the cost for filing. Recent statistics provided by the the National Bankruptcy Research Center supports this idea.

Utah, despite having unemployment of 7.3 percent in comparison to the national average of 9.2 percent, has seen increased bankruptcy filings in the first half of 2011. When the nation’s bankruptcies as a whole have dropped 8 percent in the first half of this year, Utah’s bankruptcies increased by 11 percent.

Some economic experts feel Utah may be a victim of its own success. The theory is that most bankruptcy filers have to save money to afford the bankruptcy filing fees. They wait until they get a new job or enough income to save the lawyer fees and court costs. Since Utah and several other states like Utah have relatively lower unemployment, jobs are easier to find in those areas  and this may mean that more debtors in Utah can afford to file for bankruptcy protection after they have gone back to work. In states with higher unemployment, fewer people are going back to work, so they don’t feel they can afford to file, and bankruptcy statistics mirror that fact.

When people realize they are nearing bankruptcy, they tend to become more aware of the need to protect their assets. They begin to consider their options and how best to stop creditor collection actions.

There are three ways you can address the problem of bankruptcy. First, if you are collection proof, meaning you have no assets for your creditors to take, you can wait out the statute of limitations for your debts. The only problem with this option is will have to deal with debt collection activities and possible lawsuits.

Second, you can choose to negotiate with your debtors. Some people hire debt settlement companies to help them negotiate a settlement, while others consolidate loans or negotiate for themselves. In any case, historically, there has been little success with creditor negotiations.

Finally, you can file for bankruptcy protection. Filing bankruptcy will invoke an automatic stay which prevents creditors from bringing certain lawsuits, foreclosures, utility shut-offs, evictions, repossessions, garnishments, attachments, and debt collection harassment.

If you are considering bankruptcy, contact a bankruptcy lawyer. It can be complicated to file bankruptcy. Filing for bankruptcy also costs money, and since you are bankrupt, filing can be a huge expense.

If you are employed when you file for bankruptcy, most lawyers will tell you to stop paying unsecured debts and save up for your lawyer and filing fees. Most lawyers want their money up-front before they file.

If you need of relief from the stress of debt and you live in or around the metropolitan areas of Dayton or Springfield, Ohio, and Salt Lake City, Utah, contact us at www.BankruptcyHome.com . We will help you find a bankruptcy attorney in your who will answer your bankruptcy questions.

Individuals File Involuntary Bankruptcy Against Bank

There are two forms of bankruptcies- voluntary and involuntary. Although rare, an involuntary bankruptcy occurs when a creditor legally forces a debtor into bankruptcy. A creditor can petition a U.S. Bankruptcy Court to place a debtor into bankruptcy but certain criteria has to be met or the case will be dismissed by the court.

Recently 25 individuals petitioned the District of Colorado bankruptcy court to place Bank of America into involuntary bankruptcy. The petitioners claimed the bank owed them more than $60 million.

Michael E. Romero, a bankruptcy judge for the District Bankruptcy Court of Colorado, received the petition, heard responses from both sides, and made a ruling to dismiss the bankruptcy case on June 21, 2011. Judge Romero also ruled that Bank of America had until July 8, 2011, to file a motion requesting an award of costs, fees, and damages pursuant to bankruptcy code 303 (i)(1).

What does this ruling means to the 25 filing individuals who filed the petition Pro Se?  Bank of America was not forced into bankruptcy, and they may now be responsible for Bank of America’s legal fees and damages.

Bank of America raised four questions in its defense: 1) Whether or not the Court had jurisdiction to hear the case; 2) Whether or not the petitioning creditors were eligible to file an involuntary petition; 3) Whether or not Bank of America was eligible to be a debtor under an involuntary filing for a Chapter 7 or Chapter 11 bankruptcy; and 4) Whether or not the petition was filed in good faith.

Judge Romero made no ruling on the question of jurisdiction since he found other grounds to dismiss the case. He found the petitioners were ineligible to file the petition based on lack of documentation.  He ruled they provided no evidence that Bank of America owed them money.

Judge Romero also found Bank of America could not be a debtor under either Chapter 7 or Chapter 11 of the Bankruptcy Code. Finally, he postponed his decision on whether or not the petitioners acted in good faith, an issue which can be decided later if Bank of America files a motion for damages.

It will be interesting to learn the effect Judge Romero’s ruling will have on the 25 individuals. According to court documents, Bank of America researched the group and found they had business relations with only some of them, either currently or in the past. Some had owned homes which had been foreclosed by Bank of America, while others were debtors whom filed bankruptcies listing Bank of America as creditors.

Certain actions taken by a creditor, like a foreclosure, can force you into a voluntarily bankruptcy filing, but if a creditor has a legitimate reason to file an involuntary bankruptcy against you, they will normally do so to protect the assets you currently own. Historically, when creditors file an involuntary bankruptcy, debtors will respond by voluntarily filing their own bankruptcy.

If you need relief from the stress of debt and you live in or around the metropolitan areas of New Haven or Meriden, Connecticut, contact us at www.BankruptcyHome.com . We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.

Debtor States May Be Making a Comeback

Foreclosures have risen to a record 1.05 million last year and bankruptcies have risen over 1.5 million. Foreclosures often force people who wouldn’t necessarily file for bankruptcy protection to file, but what some homeowners are finding out is certain expenses associated with home ownership don’t necessarily go away in bankruptcy.

Debts not discharged in bankruptcy can include Home Owner Association (HOA) fees and the interest associated with them. You are responsible for paying all HOA debt prior to filing, unless they are discharged by the bankruptcy court. You are also responsible for paying all HOA debt after filing for bankruptcy until the lender forecloses on the property and takes legal possession either by transfer of any deed or title, or you sell the property and transfer deed or title.

Bankruptcy code 523 (a) (16) implies that until you no longer have legal, equitable, or possessor ownership in the property, you may owe HOA fees and late charges. After bankruptcy, unless HOA deficiency claims are resolved by the bankruptcy court, you may have to pay late charges and any interest associated with their collection.

Certain states allow garnishment of wages, and in these states the HOAs aggressively collect their dues. In Florida, for instance, there is a five year period from the end of a foreclosure case judgment to establish a deficiency judgment like HOA fees. Then that judgment lasts for 10 years and can be extended for another 10 years. Depending on the state, the judgment can charge 18% interest until paid.

Twenty-five years is plenty of time for aggressive collectors to collect a debt, and if these debts are not discharged in bankruptcy, you may have your wages garnished, your bank accounts frozen or liens attached to your assets.

Laws have changed over the last several years, but many people now believe that recent bankruptcy laws have been passed to favor creditors. The Bankruptcy Abuse Prevention and Consumer Protection Act was passed in 2005 to alleviate the perceived abuse of the system, but some may argue there was never any overwhelming abuse. Nevertheless, the recession and housing crisis have caused record numbers of bankruptcies filings since the passing of the 2005 Act.

With certain debts like HOA fees, late charges, and interest piling up on the debtors who could not get the debts discharged in bankruptcy, certain states may begin to update state bankruptcy laws to help the debtor.

If you are considering filing for bankruptcy protection, contact a bankruptcy lawyer. If you need relief from the stress of debt and you live in or around the metropolitan areas of Charleston or North Charleston, South Carolina, contact us at www.BankruptcyHome.com . We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.