Wichita, Kansas Bankruptcy Trends in 2012
Clients filing bankruptcy ask lots of questions, and that is a good thing. Many times, I am the first attorney my clients have ever met with, so it is important that I assess their situation thoroughly and give honest and complete answers to their questions. This helps me establish credibility and a relationship with my clients. Plus, it gives my clients a sense of comfort knowing their questions have been considered and answered thoughtfully.
However, communicating with my clients is not a one-way street. As I meet with people and help them prepare for a bankruptcy filing, I listen to what they have to say. Interestingly, it often provides me with insight into what my clients are experiencing in their daily lives and what led them to my office.
Of the many comments I hear most often is this: I never dreamed I would end up filing bankruptcy. But really, who does? As a bankruptcy attorney, I often help my clients through some of the darkest periods of their life. And while most people couldn’t have predicted that they would ever file bankruptcy, statistics help us analyze bankruptcy trends on a broad scale. As we are now over half-way through 2012, I thought it would be interesting to take a look at this year’s bankruptcy trends.
Bankruptcy Filings are Falling, So Less People Must Need Help, Right? Not so Fast!
As has been widely reported, the total number of bankruptcy filings year-to-year is set to fall again. But don’t let this fact fool you. In my practice in Wichita, Kansas, I have continued to encounter plenty of people who desperately need bankruptcy relief. So, why the decrease? I think there are a number of reasons.
First, many people view bankruptcy as a “last resort”, which is totally untrue. People may deplete all of their assets, including retirement savings, before they come to grips that they need to file bankruptcy. If only these people would have visited with a bankruptcy attorney beforehand, they may have been able to get debt relief and retain their retirement accounts and other exempt assets.
Also, many people are holding out hope that they will be approved for a mortgage modification. One of the common reasons people file for Chapter 13 bankruptcy is to stop a foreclosure. Add to the list the tightening credit market. Consumers have found it increasingly hard to get credit over the past few years. Finally, hiring a bankruptcy attorney costs money. As idiosyncratic as it may be that it costs money to file bankruptcy, hiring a reputable bankruptcy lawyer may help your case proceed smoothly. Think of it as an investment, not another expense.
As We Approach 2013, We File More Chapter 13’s
Interestingly, I have observed a noticeable increase in Chapter 13 filings in my practice in Wichita. Statistics provided by the bankruptcy court also confirm an increase in Chapter 13 filings across Kansas for the first quarter of the year, compared to the same period in 2011. Although second-quarter statistics for 2012 are not yet available, I would expect this trend to continue.
Why? I think many people in Wichita, Kansas and across the state are regaining employment. Since unemployment peaked in Kansas in 2009, the unemployment rate has fallen to around 6%. During unemployment, many people fell behind on their mortgage payments, and these people are filing Chapter 13 bankruptcy to keep their house. Also, once a mortgage modification has either been denied or a decision delayed, Chapter 13 provides peace of mind for many people to retain their home.
As Always, Take Time to Visit With a Bankruptcy Lawyer
Bankruptcy trends will continue to ebb and flow, based on economic conditions and the needs of filers. This article provides only general information, and your situation is unique. If you are considering bankruptcy, for whatever reason, I encourage you to take the time to discuss your financial situation with a reputable bankruptcy attorney.