As a Sacramento bankruptcy attorney I will read reports like the one Equifax produced on bankruptcy trends in Orange County and speculate about what their findings will mean over the coming year. Equifax reported (story was covered by Jan Norman of the Orange County Register on August 25th) that small business bankruptcy filings were up 110.3% since 2008 in Orange County putting the county in the #6 spot for small business bankruptcies in the first half of 2011. The Sacramento and Riverside regions (areas my practice serves) both saw a decline in bankruptcy filings for the first half of this year, only to turn and slowly climb back up in the last few months.
I know that as a Sacramento bankruptcy lawyer I’ve handled my fair share of Chapter 7 and Chapter 11 cases in Sacramento these past two years, and I understand by speaking with the proprietors why it is that they’ve been forced to file. “Lack of business”, is what is usually cited. Given that the stock market continues to plunge, the US credit rating was downgraded, there is no real plan for jobs that would affect anyone aside from large corporations (as usual), and even the US Postal Service is going into default soon…well, I can’t say that I would predict a rosier future for Sacramento or Riverside anytime soon.
People aren’t spending, and they’re not going to be spending money anytime soon with the job market being what it is. Most everyone is looking at their battered 401K and wondering why they bothered not just throwing the money into savings accounts, and those that have extra are doing just that. This Sacramento bankruptcy attorney predicts a rise in both Chapter 7 and Chapter 13 in the next year and a half unless Congress and the President do something crazy like enact pre-WWII tariffs and/or give enormous tax breaks to businesses that hire one or more employees.
I see another storm coming on the horizon and my advice to everyone is to batten down the hatches, begin saving, and diversify your finances. I know one family where everyone had 2 part-time jobs in case they lost one they would still have a job to support them temporarily. While I certainly don’t want to be the voice of gloom and doom, I do want to help people in my community prepare for the worst. Here in California we get earthquakes, mudslides, and wildfires. Many of us try to prepare for them, financial disasters should be no different.
If your business is looking shaking, start thinking now about Chapter 11 reorganization—just to be prepared. It is possible that you can keep your business afloat until better times. Chapter 11 is a reorganizational plan for success, and a far better option than Chapter 7 liquidation. If you would like more information on the subject by all means give me a call. And that’s the opinion of this Sacramento bankruptcy attorney.
Related articles
- A Sacramento Bankruptcy Attorney’s Explanation of the Differences between Chapter 7 and Chapter 11 Bankruptcy (attorneydebtreset.com)
- What Sacramento Bankruptcy Attorneys Can Tell You about Civil Lawsuits and Bankruptcy (attorneydebtreset.com)
