Bankruptcy – What Can We Expect in 2010
Author: Thomas Ajava
There is little doubt that most people and businesses are glad to see 2009 pass, but what does 2010 hold in store particularly when it comes to bankruptcy filings? Let's take a look.
The 2009 calendar year saw the bankruptcy filings of companies that were once thought impervious to such a development. Two that immediately come to mind are Chrysler and General Motors. Both filings were fairly quick because the nature of the reorganizations were figured out before the filings were made. This presents us with our first trend in 2010.
We can expect to see more pre-packaged bankruptcy filings this year by large businesses. This type of bankruptcy has always been around, but it was turned into an art form in 2009. The basic idea is to put the screws to the creditors while threatening a bankruptcy filing. Those creditors that don’t agree to the deal being offered are then washed away in bankruptcy while those that agree come out the other side with some interest still in the company, often an equity interest.
The second trend we will see in 2010 is the continuation of huge bankruptcy filings. The difference is you and I will not recognize many of the names. These companies will be behind the seen entities. The number on industry where this will occur is in commercial real estate. Everyone from mall owners to brokers to, well, anyone associated with the industry is going to be in big pain. 2009 started the commercial real estate market implosion, but 2010 will see the biggest bloodletting.
The third development will be the continued “hidden” second great depression. People say we were saved from a great depression, but this isn’t true. The key is the banks. More banks failed in 2009 than 2007 and 2008 combined. The government is just doing a good job of keeping the news under wrap. Ah, and what about unemployment? Well, the reported rate is just over 10 percent. In truth, it is closer to 20 percent. The official rate does not include people who are working part time or haven’t had a job in a year. All of this will lead to more personal and business bankruptcy filings.
Is there any economic hope in 2010? Yes. The good news is we’ve stabilized from a confidence stand point. That is important because it means people will go out and spend at least a bit on things. I just bought an exercise bike! Regardless, the panic of 2009 has ended and one can expect a bit of stability in 2010. Will there be a recovery? Technically, we are already in one, but the effects won’t be felt by people like you and I until the end of 2010 or early 2011. Still, that is better than where we were in January 2009.
Article Source: http://www.articlesbase.com/bankruptcy-articles/bankruptcy-what-can-we-expect-in-2010-1677236.html
About the Author
Thomas Ajava writes for BankruptcyAttorneysandLawyers.com - where you can find bankruptcy attorneys and lawyers in your area that will put an end to your financial misery.
serious business if you think you are going to be a smart axx don’t message me only those who want to help me.
Then, read it through carefully and correct the errors by inserting the proper punctuation marks or deleting those that are incorrect.
Post the revised copy in the provided text box.
Foreclosure Filings Hit Record High
By Kenneth Musante,
CNNMoney
Posted: 2008-05-14 13:00:31
NEW YORK (May 14) — US foreclosure filings reached a record high in April rising almost 65% over the previous year and putting municipalities at risk by cutting into the value of taxed property according to a study released Wednesday.
Some 243,353 households nearly one in 519 received a foreclosure filing during April according to the US Foreclosure Market Report from RealtyTrac an online marketplace that tracks foreclosed properties That was up 4% from March, and surpassed the record of 239,851 set in August 2007.
It’s “the highest monthly total we’ve seen since we began issuing the report in January 2005 said chief executive James J. Saccacio in a statement.
RealtyTracs measure of foreclosure filings includes notices of default auction sales and bank repossessions According to the report, 54,574 were fully repossessed by banks in April.
Property tax plunge: The record number of foreclosures added their weight to an already saturated real estate market pulling down home prices Plunging home values reduce the money that cities villages and towns collect in property taxes.
In particular jeopardy are parts of Nevada California Arizona and Florida whose states maintained the highest foreclosure rates, according to RealtyTrac.
“For example the city council in Vallejo Calif. – part of a metropolitan area with a foreclosure rate that ranked sixth highest in the nation in April – last week voted to have the city file for bankruptcy said Saccacio.
The state of California had the second-highest foreclosure rate in the nation up 112% over the previous year and affecting about one in 204 households The top spot among states was held by Nevada which maintained a foreclosure rate 3.6 times the national average affecting about one in 146 homes.
Nationwide single-family home prices have fallen 7.7% since the beginning of the year to the lowest level since at least 1982 according to the National Association of Realtors and data from real-estate broker Zip Realty showed that the number of houses on the market grew by 3.5% in April.
With more homes being seized by banks, local governments also lose out on tax revenue from sale transactions. “It’s really hitting the municipalities from multiple fronts said RealtyTrac marketing vice president Rick Sharga in an interview.
Ten hardest hit metro areas: Cities in California and Florida have been particularly hard-hit. Areas in those states accounted for 9 of the top 10 metropolitan foreclosure rates.
The California metro areas of Merced Stockton Modesto and Riverside-San Bernardino took the top four spots. In Merced one out of 66 households was hit by foreclosure in April.
In Florida Cape Coral-Fort Myers came in at number 5 Port St. Lucie-Fort Pierce and Fort Lauderdale came in at numbers 9 and 10.
Also making an appearance was Las Vegas a city that had seen heavy real estate speculation at number 7 with one in 116 households receiving foreclosure notices.
As Congress debates plans to prop up troubled homeowners the foreclosure rate shows little signs of slowing. Delinquent mortgage payments which lead to foreclosure will likely rise over the next six to 12 months according to a key mortgage trend statistic from First American CoreLogic.
Copyright 2008 CNNMoney
2008-05-14 06:06:18
Why do the red states have the highest bankruptcy rates?
IMHO, people who are ignorant about handling money and financial matters are the most likely to file bankruptcy (there are always exceptions such as financial hardships, emergencies, etc. But I’m just saying the preceding comment as a generality). People who are more aware and better educated about handling money are obviously more likely to not become bankrupt.
14 states were in the red category. Among these were: Alabama, Arkansas, Georgia, Kentucky, Mississippi, Tennessee, and of course Utah. Six of these states have among the lowest rates of high school and college graduates in the nation, but Utah is an odd exception. Even though Utah has high education standards, I did find another demographic that Utah has in common with the other states. The majority of the population of Utah are part of an organization that has some of the most archaic moral standards in the nation. Utah consistently lags behind the rest of the country on racial equality and sex issues. I think the only reason Utah allowed women to vote so early was so the Mormons could get a larger bloc of votes to pass laws in its favor, etc. Alabama, Mississippi, Arkansas, Georgia, and Tennessee are other states that have displayed the same type of archaic views of morality and bigotry.
On the opposite end of the spectrum, such states as Massachusetts, Connecticut, Maine, Iowa, Vermont, and New Hampshire were all included in the group of 11 states with the fewest bankruptcy filings. These states are also consistently among the most progressive in the nation in terms of moral issues. Some of these states have among the highest percentages of college graduates. And, these six states I mentioned are also the only six states in the nation, thus far, to pass laws in favor of same-sex marriage.
Most of the states with the greatest population, and most diverse population base were in the middle rankings: California, New York, Florida, Pennsylvania, and Illinois included.
This is evidence to me that there is a deep connection between ignorance, bigotry, and moral standards. The states that generally have a greater percentage of people of higher intelligence and education, are the states that handle money better and are more accepting of diverse moral ideals. The states with people of lower intelligence and education, are those states which are more likely to handle money poorly, and be more bigotted and intolerant of diverse views.
How bad will the commercial real estate collapse hurt small businesses in 2010, how will it effect America?
“While bankruptcies are up, overall, small-business closures are up even more,” Headd said.
California has been particularly hard hit. The latest data show small-business bankruptcies up 81% in the state for the 12 months ended Sept. 30, compared with the previous year. Filings nationwide were up 44%, according to the credit analysis firm Equifax Inc.
http://www.latimes.com/business/la-fi-smallbiz-bankruptcy22-2009dec22,0,3305684.story
More welfare = fewer bankruptcies.
All I can tell you Sean is that there IS NO RECOVERY HAPPENING or even coming anytime soon.
No Obama lie or economics voodoo can just make this all go away.
Yeah, what they said.