It’s that time of year again where I gaze longingly into my crystal ball and make my predictions for the future of the American Dream; America’s fresh start; and the demise of our mountain of debts. Despite the continued negative stigma of bankruptcy and it’s “last resort” paradigm, bankruptcy filings in the U.S. continue to rise during this depressed economy.
According to the statistics found at the Bankruptcy Court’s website, total bankruptcy filings in the U.S. during the 12-month period ending December 31, 2009 totaled 1,473,675. This year, the year hasn’t ended quite yet, but we have the 12-month period ending September 30, 2010 and the numbers total 1,596,355 for all bankruptcy filings in the U.S.; an 8% increase in filings throughout the country. The folks over at Credit Slips predict a slight decline according to their recent post, “Projected Filings for 2011.”
In California, we will see the slippery banks unleash a flurry of foreclosures as investigations into their business practices continue to mount. More consumers will fight back against their securitized mortgages through chapter 13 bankruptcy litigation. Here in the Central District of California, we will continue to see an increase in filings as the state of California struggles with its deficit and government workers are forced to take pay cuts and furloughs. I disagree with Credit Slip’s comment about lending beginning to open and any talk about economic improvement in 2011 because we still have 95 million securitized mortgages that have yet to be dealt with and the modifications of American homes has failed. We won’t see an economic turnaround until well into 2015.