The number of bankruptcies for both individuals and businesses dropped nearly 30 percent in Orange County as compared to a year ago‚ although Woodland Hills Chapter 7 bankruptcy lawyers understand unemployment has actually inched up slightly.
According to federal bankruptcy court‚ there were 1‚073 bankruptcy filings in Orange County in September. At their highest‚ there were 1‚881‚ and that was in March of 2011.
Although this is the 13th consecutive monthly year-over-year decline‚ according to the Orange County Register‚ you have to consider that those monthly figures are actually triple what they were prior to the recession.
And what’s more‚ we may end up seeing another spike in bankruptcies for two reasons:
The first is that foreclosures tend to drive bankruptcies. For some time now‚ banks have been sitting on foreclosures as the entire financial industry seeks to right itself in the wake of the housing bust. That means we’re soon to be seeing an influx of foreclosures‚ which means the bankruptcies are going to increase along with them.
Secondly‚ unemployment is up. Thankfully‚ not by much‚ but it is up. According to the Register‚ the rate had previously stood at 7.1 percent and is now up to 7.2 percent. That’s actually better than the state’s rate‚ which currently stands at 10.1 percent (it was 10.2 percent a month ago). Overall‚ the U.S. rate is somewhere closer to the middle‚ at 7.9 percent.
Even a short bout of unemployment can cause a person to spiral into debt if they aren’t prepared – which most people aren’t. You tend to rely more heavily on credit or short-term‚ high-interest loans‚ which can quickly get you into trouble.
Economists have said that what’s more troubling than the unemployment rate itself in California is the rate at which it’s growing – or not growing‚ in this case. The pace of the hiring has slowed from nearly 2 percent last year to about 1.5 percent this year.
Some have speculated that part of the problem is that local employers held back somewhat in the uncertainty surrounding the election‚ possible tax hikes and numerous government cuts. So some are optimistic‚ but of course‚ the longer a person is unemployed‚ the more difficult it is to land a new job.
Those areas that appear to have been hit the hardest in Orange County are hospitality and leisure positions‚ which lost about 2‚300 jobs in October as compared to the year before. Additionally‚ jobs in manufacturing were down by about 200 positions‚ which is reportedly a result of a slowdown in business investment and exports.
The good news for those who are unemployed is that the benefits you collect during this time are protected during a bankruptcy.
And don’t wait to file if you’re unemployed because you figure you can’t afford it. The truth is‚ you can’t afford not to and you don’t want those unemployment benefits being used to cover debts when you’re barely scraping by.
Call us today to see how we can help.
If you are facing foreclosure in Woodland Hills‚ contact Cal West Law to schedule your free consultation. Call (800) 568-0707.
Additional Resources:
O.C. jobs increase‚ unemployment at 7.2%‚ Nov. 16‚ 2012‚ By Mary Ann Milbourn‚ The Orange County Register