From the Californian online:
“More Americans sought to discharge debts in bankruptcy court last year, and the numbers of local debtors entering bankruptcy more than doubled from 2007, according to court filings and local attorneys.
About 1.06 million individuals sought personal bankruptcy protection last year, an increase of more than 30 percent over 2007, according to the American Bankruptcy Institute, a research group based in Alexandria, Va.
A total of 18,900 residents and corporations filed initial petitions at the Riverside division of the U.S. Bankruptcy Court, compared with 8,860 in 2007. The division covers Riverside and San Bernardino counties.
A prominent bankruptcy attorney in Temecula said the increase has been even more dramatic in foreclosure-wracked Southwest County.
Bankruptcies filed under Chapter 11 of the U.S. Bankruptcy Code, which allows a corporation to put off debt while it reorganizes, rose by 530 percent in the two-county district, to 297.”
A Temecula attorney noted that there was a “ripple effect” from the economic distress, especially in construction industry:
“In August, a group of large lenders filed an involuntary bankruptcy petition against Woodside Homes Inc. in Riverside. Court filings showed the Utah-based builder owing some $680 million, including several hundred thousand dollars to local subcontractors. Woodside has built homes in the Wolf Creek development in southern Temecula; Audie Murphy Ranch, its master-planned community of 2,000 homes north and south of Newport Road in Menifee, has been repeatedly delayed.
Other filings included:
– WSR Publishing Inc., a Murrieta company whose monthly Widescreen Review covers home-entertainment products. The company continues to publish in print and at www.widescreenreview.com. Owner Gary Reber said his company’s woes stem mainly from the weakening market for consumer electronics. WSR also had difficulty refinancing some of its debt, Reber said.
– It’s About Time … Scrapbooks & More Inc. of Murrieta filed for Chapter 7 liquidation in mid-December.”
As the Inland Empire well knows, and as bankruptcy lawyers in Riverside and San Bernardino counties can attest, the economic domino effect leaves few industries untouched. With more than double the number of bankruptcy filings in the Riverside Courthouse in 2008 than in 2007, consumers and businesses alike are hurting. Whether you live in Corona or Rancho Cucamonga or Murrieta, your community is not immune from the effects of this downturn. We can only hope that new policies and the stimulus package in the works can prevent the dominoes from continuing to fall.
