Bankruptcies on the rise
- 10.25.2008
- Article Number: 4
| These are boom times for Judith Whitman and the other San Jose area lawyers who practice before U.S. Bankruptcy Court in San Jose.
For the past year, a steady rise in home foreclosures in Silicon Valley has driven a relentless increase in bankruptcies filed here.
Now, as the economy sags, small businesses are also turning up in bankruptcy filings, lawyers say, bringing in more clients than they've seen since the bankruptcy laws were changed by Congress in 2005.
A worried friend recently asked Whitman if her business was suffering because of the economic downturn.
"We're doing fine,'' Whitman reassured her friend, in what might have been an understatement.
Bankruptcies filed in the third quarter of 2008 are up 92 percent over the same period in 2007, according to a review of cases filed with the court, which covers Santa Clara, Santa Cruz, Monterey and San Benito counties.
As of Sept. 30, there have been 5,594 cases filed; 4,453 cases were filed in all of 2007.
Many of these bankruptcies are being filed by people who can no longer afford the home loans they took out during the housing boom. They file for personal bankruptcy under Chapter 13 or under Chapter 7, which is a total liquidation of assets. |
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