Chapter 7 Bankruptcy Filings, September 2009
Chapter 7 bankruptcy filings in the Riverside County Bankruptcy Courthouse for September, according to research done by a leading bankruptcy law firm, continue to trend upward in 2009.
The cities with the most Chapter 7 bankruptcies in Riverside County and San Bernardino County for September did not change from the top-ten in August:
Corona, Fontana, Moreno Valley, Murrieta, Ontario, Rancho Cucamonga, Riverside, San Bernardino, Temecula, and Victorville.
Bankruptcy attorneys in the Inland Empire are also noticing a high number of filings from bankruptcy debtors residing in Chino, Chino Hills, Hemet, Hesperia, and Lake Elsinore.
Chapter 7 Bankrutpcy Filings For August 2009
Chapter 7 bankruptcy filings in the Riverside County Bankruptcy Courthouse for August 2009 reveal that the top ten cities in Riverside and San Bernardino County with the most Chapter 7 bankruptcies were:
Corona, Fontana, Moreno Valley, Murrieta, Ontario, Rancho Cucamonga, Riverside, San Bernardino, Temecula, and Victorville.
Bankruptcy attorneys from Riverside and San Bernardino County are also witnessing a high number of filings from debtors residing in Chino, Chino Hills, Hemet, and Hesperia.
Bankruptcy Filed By “Erin Brockovich” Law Firm
Bankruptcy filings are never glamorous, but sometimes those involved have themselves spent time in the spotlight for prior events or accomplishments of note. One such entity is the law firm featured in the Julia Roberts film, “Erin Brockovich.” From the WSJ blog:
“The personal injury law firm that handled the water contamination case featured in the movie, Masry & Vitotoe, earlier this month filed for bankruptcy protection.
According to Lisa Cohen, a spokeswoman for the firm, based in Westlake Village, Calif., the filing was the unfortunate result of a squabble for funds after the death of founding partner Edward Masry in 2005 (played in the movie by Albert Finney).
According to a report in the Dow Jones Daily Bankruptcy Review, a number of litigants had come forward alleging that Masry promised them assets and cash from the firm. His own estate and heirs also filed claims. All told, the law firm spent more than $3 million related to the claims and ensuing litigation.”
Chapter 7 Bankruptcy Filings in Riverside & San Bernardino Counties, July 2009
Chapter 7 bankruptcy filings in Riverside County and San Bernardino County for July 2009 were most numerous in the following ten Inland Empire cities:
Corona, Fontana, Hemet, Moreno Valley, Ontario, Rancho Cucamonga, Riverside, San Bernardino, Temecula, and Victorville. Hesperia also had a high number of Chapter 7 bankruptcies filed, as did Murrieta.
Chapter 7 bankruptcy, also known as “fresh start” bankruptcy by bankruptcy attorneys, helps debtors get out from under large amounts of debt by discharging most debts owed to creditors.
Chapter 7 Bankruptcy Filings in Riverside County & San Bernardino County, December 2008
Bankruptcy lawyers are needed in many cities, but perhaps in some more than others.
The Riverside County and San Bernardino County cities with the most chapter 7 bankruptcy filings for the month of December, 2008, are as follows: Corona, Fontana, Moreno Valley, Murrieta, Ontario, Rancho Cucamonga, Riverside, San Bernardino, Temecula, and Victorville.
Riverside County and San Bernardino cities that also had a high number, especially considering their relative population, include Chino, Chino Hills, Hemet, and Menifee.
The total number of Chapter 7 bankruptcy filings in the Riverside Bankruptcy Courthouse, for the month of December 2008 was 1,254.
Bankruptcy Filings Rise, Especially in Riverside Courthouse
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.
Chrysler to Close Factories in Riverside County
From instantriverside.com:
“In a cost-cutting move, Chrysler announced Wednesday that it is halting production of vehicles at all of its factories. It is unclear if this will have any impact on dealerships at the Riverside Auto Center.
Moss Bros. Dodge and Riverside Chrysler Jeep sell Chrysler products at the Riverside Auto Center.
Here is the official statement issued by Chrysler LLC:
Due to the continued lack of consumer credit for the American car buyer and the resulting dramatic impact it has had on overall industry sales in the United States, Chrysler LLC announced that it will make significant adjustments to the production schedules of its manufacturing operations. In doing so, the Company will keep production and dealer inventory aligned with U.S. market demand.
In response, the Company confirmed that all Chrysler manufacturing operations will be idled at the end of the shift Friday, Dec. 19, and impacted employees will not return to work any sooner than Monday, Jan. 19, 2009.”
For Riverside County and San Bernardino County residents, this is another sign that the economic crisis is hitting main street as hard as wall street. Car companies like Chysler are surely being affected by the number of bankruptcy filings, as car loan debts are often high on the list of debt that is discharged when an individual files for Chapter 7 bankruptcy. From Temecula to Riverside, from Chino to Rancho Cucamonga, Inland Empire residents and businesses are feeling the pain. Whether it means discharging the debt in bankruptcy on a car loan that can’t be paid, or simply not being able to buy a new car, Christmas won’t be what it used to be for the customers or the employees of car dealerships this year.
During Credit Crunch, Bankruptcy Difficult to Avoid
Last month saw a 34% growth in bankruptcies filings, as compared to cases filed in October 2007. According to the New York Times, this increase in the number of bankruptcy filings is due in large part to the specific nature of this particular economic crisis.
Besides the usual reasons why people look for bankruptcy protection, such as job loss, medical bills, divorce, the central reasons for the increase in Chapter 7 and Chapter 13 bankruptcy filings during this economic crisis have more to do with the abrupt drop of home values, unstable incomes, and the “credit crunch”.
It seems that more people are turning to bankruptcy lawyers during this economic downturn than during the tech bust because of how the mortgage crisis has affected the lending practices of financial institutions. Essentially, where debtors used to be able to avoid bankruptcy by obtaining more credit, and tried to stay afloat for a while longer, the current “credit crunch” has made it nearly impossible for many to obtain new credit cards, refinance their home mortgages, or get a home equitiy line of credit, due to the banks’ pull back on lending. This has, in turn, driven many debtors to file for bankruptcy that would have otherwise avoided it. This does not mean that many people aren’t trying their best to avoid filing, as seen in a key statistical comparison to the filings in 2001.
In recent studies, it was shown that the typical family who filed for bankruptcy in 2007 carried 21% more secured debt and 44% more unsecured debt than people who filed in 2001, even though average income among those filing for bankruptcy remained static over those six years. So although income stayed the same, debt rose, illustrating the attempt by debtors to put off bankruptcy as long as possible while trying to get back on their feet. Studies also show that filings increased mostly in places where real estate values skyrocketed and then crashed, including Corona, Murrieta and Temecula in Riverside County.
Although filing for bankruptcy and hiring an attorney is not anyone’s idea of a good time, for many Riverside and San Bernardino County residents it’s the most sensible solution to get their financial sanity back, and the best path toward a well deserved fresh start.
Bankruptcies Surpass the 100,000 Mark for October
This October, for the first time since the Bankruptcy Code was changed in 2005, more than 100,000 people filed for bankruptcy in a single month. Accounting for both businesses and individuals alike, the month of October yielded 108, 595 bankruptcy filings in the U.S. This number is an increase of 13% from the month of September.
Although the revision to the Bankruptcy Code in 2005 led to a reduced average number of bankruptcies during the past three years, the financial problems created by this year’s mortgage crisis and credit crunch have made filing for bankruptcy a necessity for many businesses and individuals who might have tried to avoid it at all costs in the past.
For more information: “Bloomberg Article”
Chapter 7 Bankruptcy Filings in Riverside Courthourse
During the month of October, there were more than 1400 Chapter 7 bankruptcy filings in the Riverside Courthouse. The 10 cities or towns accounting for the most filings for that month were: Corona, Fontana, Hemet, Moreno Valley, Murrieta, Ontario, Rancho Cucamonga, Riverside, Temecula, and Victorville. Unfortunately, these results are identical to the month of September, suggesting that the trend of high filings within those afflicted areas is not changing for the better. Other Inland Empire cities worth mentioning that also produced a significant number of filings include: Hesperia, Indio, Lake Elsinore, Menifee, Perris, and Rialto.
Astoundingly, these 1400 + bankruptcy filings came from people across 87 different cities and towns within the area, illustrating that no area is immune from the effects of a troubled economy.
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