Just like the Chapter 13 figures, Chapter 7 bankruptcy filings in San Diego hit another all time high in the first three months of 2010. Over 17,000 claims were made in the three months alone dampening hopes of economic recovery in San Diego and California as a whole.

In this graph you can observe the upward trend in each successive quarter since 2007. The increase began well over a year before the 2008 credit crunch, and has since exploded 435% from Q1 2007 to Q1 2010.

Bankruptcy attorney Cecilia Chen mentioned in 2009, and again in 2010, that the numbers were not expected to decline largely due to homeowners losing their primary asset:

Homeowners face the largest pinch. We don’t expect a decrease in bankruptcy filings from former homeowners. Many are surprised to find out, for example, that they still owe the difference between what they owed on their mortgage and what the bank could sell it for at auction. It can also happen to people who got their bank to approve them selling their home for less than it is worth if the loan has been refinanced and/or if the second mortgage loan proceeds were not used to purchase the home. It’s a mistaken belief held by many that the deficiency can be negotiated away or simply disappear.

Silver Lining to Bankruptcy Data

There is, however, some good news. Similar to Q4 v. Q3 data in 2009, Q1 2010 data actually had a smaller percentage increase in filings compared to the previous period. What his means is the increase in Chapter 7 filings, despite hitting an all time high again, is decreasing.

The graph above tracks the percentage increase of filings between quarters. All of the numbers are above zero, so all point to a negative increase. However, what should be noted, is that for the first time in 3 years the increase between quarters dropped to below 5%. It is conceivable that the number of San Diego Chapter 7 fillings could decline by the third quarter in 2010.

However, we’ll have to wait on the data at the end of 2010 to determine whether this expectation will turn out.



For further assistance in exploring bankruptcy claim options please contact the Law Office of Cecilia Chen for a free consultation.


All data sets compiled using Rand California data.

2010 Chapter 7 Bankruptcies in San Diego Hit New High from the Law Office of Cecilia Chen, providing legal services in San Diego in: bankruptcy, estate-planning, real-estate, and corporate law.

More and more people from San Diego are declaring both primary forms of bankruptcy (Chapter 7 and 13) which doesn’t lend support that the local economy is on the recovery track as of yet.

Chapter 13 bankruptcy offers the debtor a chance to restructure their debts and catch up on areages and back taxes over a 3-5 year repayment period. This differs from Chapter 7 which is far more evasive. Protecting your assets is crucial when you’re faced with the prospect of declaring bankruptcy. Many consumers are unaware of the options they have to protect, among other assets, their most important–their homes. Ensure you contact a legal professional with bankruptcy experience to protect your financial assets.

Cecilia Chen noted back in March 2010, when Q4 2009 data was released that:

Government interventions introduced this year will start to disappear, shadow inventory (houses that banks now hold but have yet to put up for sale) will hit the market and mortgage rates will start to rise. We’re not expecting bankruptcies to slow.

So far the observation is correct.

The Fed may raise interest rates this year putting new home owners and those whose mortgages need to be restructured, along with those with a variable rate, in additional pressure as well.

However, the news may not be all bad. When observing the increasing trend of Chapter 13 claims the number is in fact decreasing

Q4 2008 to Q1 2009 = 11.25%
Q1 2009 to Q2 2009 = 13.22%
Q2 2009 to Q3 2009 = 13.21%
Q3 2009 to Q4 2009 = 16.42%
Q4 2009 to Q1 2010 = 9.27%

What do these numbers mean? The percentages represent the increase in claims between the two periods. Although the number of claims increased in Q1 2010, the number of additional people filling claims decreased. For example, from Q3 to Q4 2009, 487 additional claims were made. Whereas in the period between Q4 2009 and Q1 2010, 320 additional claims were filed.

We’ll have to await Q2 2010 data to emerge in October before we’ll be able to tell for sure whether this downward trend continues.

All data sets compiled from Rand California.

San Diego Chapter 13 Bankrupty Numbers Reach New All Time High from the Law Office of Cecilia Chen, providing legal services in San Diego in: bankruptcy, estate-planning, real-estate, and corporate law.

The graph below shows you the Chapter 7 and Chapter 13 numbers for every quarter since 2006. More to come tomorrow.

2010 Quarter 1 Bankruptcy Numbers for San Diego Released from the Law Office of Cecilia Chen, providing legal services in San Diego in: bankruptcy, estate-planning, real-estate, and corporate law.

What about data closer to home, what are the foreclosure trends in San Diego? In the current financial age following last year’s recession foreclosures have become a mainstay in the San Diego economy. The number of foreclosure claims is still significantly higher than 2005 levels–the last time San Diego saw foreclosure numbers under 30 per month.

Looking back on the data we can observe some interesting trends that shed some light on when the problems of the recent credit crisis began to emerge, and where we’re going in 2010.

Monthly total of foreclosures in the San Diego MSA area from 2005-2009.

Observing the graph above we can ascertain that the economic crisis across the USA in late 2008 in fact started ti emerge much earlier. In San Diego, foreclosures began their steady rise starting in March 2006, almost a full 2.5 years before the credit crunch due to toxic sub-prime mortgage lending started to come to full fruition in 2007 which lead to the eventual collapse in October, 2008.

The peak for San Diego MSA foreclosures actually occurred before the public credit crisis in October, 08. In July 2008 over 2000 foreclosures were made, almost three months before the credit collapse.

Although the increase since 2006 haven’t been uniform (there have been periods of slight decline month to month) the increases are absolutely staggering. Dec 2009 vs. Dec 2005 saw an increase in foreclosures by over 3400%!

Is there end in sight? As 2010 numbers roll out the news is good and bad. Expect more up and down data similar to 2009 where good news was met the following month with bad.

What does this mean moving forward?

We cannot conclude using this data that stability is assured in the upcoming months of 2010. Many are still facing the prospect of foreclosure and the potential of declaring bankruptcy. In fact, preliminary numbers from 2010 indicate that the problem has actually gotten worse and San Diego has seen new foreclosure record highs.

Conversely, there appears to be an increase in opportunities for those looking to purchase foreclosed homes (where currently there seems to be no shortage of availability). Although finding the right deal and having stable market conditions to resell remains volatile.

If you are experiencing the reality of foreclosure we suggest speaking to financial professional to explore options to prevent the loss of key assets like your home.

Protect yourself before losing your home by exploring your options such as Chapter 13 bankruptcy with Cecilia Chen. Contact her for a free consultation.

* All data, not including graphs, are courtesy of RAND California.

2005-2009 San Diego Foreclosure Statistics from the Law Office of Cecilia Chen, providing legal services in San Diego in: bankruptcy, estate-planning, real-estate, and corporate law.

Chapter 13 bankruptcy claims have continuously increased since the financial crisis hit America in October, 2008. The upward trend has mostly increased steadily since quarter 4 of 2006 as noted in the graph below.

Unlike Chapter 7 filings for the same time period which have increased consistently but at a slower rate, Chapter 13 claims have not only increased, but the numbers are growing more and more for each quarter in 2009. The table below notes the percentage change and filing numbers since 2006 in the San Diego area.

Tracking Chapter 13 filings are of particularly interesting to track because it provides a glimpse of those who are dealing with liquidation yet retain secured debts thus prevent foreclosure on their homes (and other large assets).

This is in contrast to Chapter 7 liquidations that typically includes all assets in proceedings.

When you combine both Chapter 7 & 13 the trend becomes more pronounced as Chapter 7 filing exceed Chapter 13 filings by a wide margin (7 to 1 in Q2 2009 and sometimes 10 to 1). You can clearly see in the graph below the stacked addition of Chapter 7 and Chapter 13 numbers are still on a steady rise.

If you find yourself faced with the prospect of filing for bankruptcy then pay attention to some important tips from our bankruptcy attorney Cecilia Chen.

Cecilia commented on the differences between Chapter 13 and Chapter 7 filings:

In my experience, I am filing a lot more Chapter 7 cases than Chapter 13.

The financial crunch has also played a noticeable role in the type of filer as well:

As a direct result of the recession, more and more families simply do not have the income needed to qualify for Chapter 13. Most of my clients are hard-working individuals who do not have the income each month to repay their debts and obligations as a result of illness, unemployment or reduction in pay and hours.

When asked about the expectations for the rest of 2010 Cecilia suggested,

Government interventions introduced this year will start to disappear, shadow inventory (houses that banks now hold but have yet to put up for sale) will hit the market and mortgage rates will start to rise. We’re not expecting bankruptcies to slow.

Bankruptcies are an unfortunate reality in our economy today and if you find yourself facing this prospect you deserve professional and experienced representation in proceedings.

Contact bankruptcy attorney specialist Cecilia Chen with further questions regarding Chapter 13 proceedings in the San Diego area.

* All data, not including graphs, are courtesy of RAND California.

Chapter 13 Bankruptcies in San Diego Hit All-time High Again in Q4 2009 from the Law Office of Cecilia Chen, providing legal services in San Diego in: bankruptcy, estate-planning, real-estate, and corporate law.

The picture blow graphically represents the increase in Chapter 7 claims in each quarter since 2007 including the quarter 4 2009 all-time high number of 16,339.

The main contributor to the increase in bankruptcy declaration stems from the largest asset that the majority of consumers hold–their homes. The burden of large debts such as mortgages and credit lines has placed many in a position to make necessary personal financial recovery steps. This has lead to some confusion for some.

It also important to understand the logistics of filing for bankruptcy if you find yourself in that situation. Bankruptcy attorney Cecilia Chen had this to say about the increase in bankruptcy proceedings and how some homeowners have been surprised with what they owe after filing:

There has been an increase in bankruptcy filing from many former homeowners whom were surprised to find out that they still owe on the difference between what they owed on their mortgage and what the bank could sell it for at auction. After the banks foreclose, it’s very common to have large deficiencies with houses that were sold below the balances owed. It can also happen to people who got their bank to approve them selling their home for less than it is worth if the loan has been refinanced and/or if the second mortgage loan proceeds were not used to purchase the home. It’s a mistaken belief held by many that the deficiency can be negotiated away or simply disappear.

The news isn’t all doom and gloom, however. The percentage change between Q3 and Q4 2009 Chapter 7 claims in San Diego was actually down slightly to just over a 6% increase. This means that although Chapter 7 claims have increased to an all-time high, that increase has been accumulating at a slower rate than previous months. When Q3 data came out we wondered if the percentage change in claims would continue to fall, it has as pictured in the graph below.

The economy is still showing signs of weaknesses as more people file for bankruptcy protection. This makes the wait for Q1 2010 data even more interesting to see whether San Diego will see another time high Chapter 7 filing high, or a decline. It is likely that more stable economic recovery numbers particularly in the housing sector need to emerge before we’ll see a noticeable decrease in Chapter 7 claims.

If you find yourself as one of the many people looking to file for bankruptcy then pay attention to some important tips from our bankruptcy attorney Cecilia Chen.

If you have further questions about Chapter 7 bankruptcy proceedings contact Cecilia Chen for a consult.

* All data, not including graphs, are courtesy of RAND California.

Record Numbers: Chapter 7 San Diego Bankruptcies Up in Q4 2009 from the Law Office of Cecilia Chen, providing legal services in San Diego in: bankruptcy, estate-planning, real-estate, and corporate law.

If you recall in previous articles on bankruptcy data in San Diego, attorney Cecilia Chen noted that she expected Chapter 7 and 13 fillings to increase. Turns out she was right.

Families are coming in more and more to file for Chapter 7. They generally do not have enough income to qualify for Chapter 13.

I do think that Chapter 7 and 13 bankruptcy filings will continue to increase in year 2010 and beyond because unemployment has not abated and we are currently in a false sense of stability. Next year, government interventions will start to disappear, shadow inventory (houses that banks now hold but have yet to put up for sale) will hit the market and mortgage rates will start to rise. I’m also seeing credit card companies are also increasing the interest rate and minimum monthly payments, creating a significant hardship on many families in San Diego.

Although there have been increases in filings in both Chapter 7 and 13, the rate at which people are filing has in fact flat-lined.

The increase in the total number of Chapter 13 fillings for the San Diego area, depicted in the graph above, highlights that the growing trend continues. However, that growth may have flatlined and perhaps in Q4 2009 we can expect a slight decline in total % increase of claimants.

Every new quarter there’s on average over 11% increase compared the previous quarter. Q3 2009 saw a total of almost 3000 (2966) claimants file for Chapter 13 protection. That’s a 13% increase over the previous period. You can see from the chart below that although claimants increased by just over 300, the total % increase remained the same.

Date	Q1		Q2		Q3		Q4
2006	1,412	-15%	1,203	-14%	1,032	-8%	945
2007	1,108	18%	1,304	11%	1,448	9%	1,572
2008	326	437%	1,751	11%	1,936	7%	2,080
2009	2,314	13%	2,620	13%	2966

It’s tough to make any hard conclusions from the data which makes quarter 4 2009 data even more interested as it will give us a better indication on how San Diego is doing coping with the recession and their mounting debt. What we can expect from Q4 are new highs in both Chapter 7 and 13 filings, but the question of whether that growth is decreasing will be the focus.

Stay tuned to CCLegalGroup’s coverage of Q4 Chapter 13 data as it becomes available, we’ll release it as soon as we can.

If you’re in the San Diego area and have further questions about Chapter 13 bankruptcy proceedings contact Cecilia Chen with your questions.

* All data, not including graphs, are courtesy of RAND California.

San Diego Chapter 13 Bankruptcies Rise Again in Q3 2009 from the Law Office of Cecilia Chen, providing legal services in San Diego in: bankruptcy, estate-planning, real-estate, and corporate law.

The graph indicates the continued 2009 upward trend of Chapter 7 bankruptcies claims in San Diego. Claims have increased 3x since 2007 and broke another record for filings in Q3 2009 (since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was written into law).

Bankruptcy filings are one of many indicators that our financial system is still dealing with debt loads larger than we can handle. The Chapter 7 numbers include mostly consumer related filings. Nonetheless, there are positives in the numbers despite the all time high of 15,407 filings in the San Diego area.

Chapter 7 filings, the most common type for individuals, were up over 200% in the first quarter of 2009 compared to the same period in 2007. Every quarter since Q4 of 2006 has seen an increase in filings compared to the preceding quarter including the recent Q3 data. That’s the bad news.

Although the highest number of claimants was recorded in Q3 09, it appears the percentage by which bankruptcy filings occurred decreased in the Fall of 2009 compared to the previous quarter. This graph explains the decrease.

This graph outlines that the percentage increase from Q2 2009 to Q3 2009 was in fact the least percentage increase since Q1 2007 at a 9.86% increase compared to 11.11% in the previous quarter. Although this is not a monumental decline, it may indicate that the trend of consumers living beyond their means is slowly decreasing and consumer debt decreases and consumer spending decrease along with it.

We will find out more information as Q4 2009 data is released early next month. Hopefully the good news continues.

If you find yourself as one of the many people looking to file for bankruptcy then pay attention to some important tips from our bankruptcy attorney Cecilia Chen.

If you have further questions about Chapter 7 bankruptcy proceedings contact Cecilia Chen for a consult.

* All data, not including graphs, are courtesy of RAND California.

San Diego Chapter 7 Bankruptcies Set New Records in Q3 2009 from the Law Office of Cecilia Chen, providing legal services in San Diego in: bankruptcy, estate-planning, real-estate, and corporate law.

Q. How does bankruptcy work if you’re married? Spouse with different credit ratings.

In a community property state such as California, both individuals will have to report their income if they married regardless of whether they file jointly or without their spouse. If both spouses file, the bankruptcy will affect their credit rating; if all the debt are in both spouses name both will have to file. If everything is kept separate and all the debts are in one spouses name (particularly if incurred prior to couple becoming married), it is possible that only one will have to file.

Q. When filing for personal bankruptcy (chapter ?), can creditors touch the equity in your home?

If the equity in your home exceeds the homestead exemption, then yes, the portion that is not covered by the homestead exemption will be subject to be sold by the bankruptcy trustee to repay the creditors. The homestead exemption in CA for a single 75,000 for a married couple, and 150,000 if one of the spouse is disabled. If you have more equity than what is protected then yes creditors can touch that portion.

Q. How soon after bankruptcy can you buy property? How long until you can get a loan for a home?

It varies with each person and how current you are with your obligations after filing for bankruptcy, but I have clients who get a loan and buy a home in less than 2 years after filing for bankruptcy.

Q. How does bankruptcy affect students from getting loans?

It depends on whether the student loan program is federal or private. Generally speaking, a bankruptcy has no impact on eligibility for federal student aid, since the loan is being guaranteed by the federal government. Many private loan programs have credit criteria that preclude people with a bankruptcy within the past 7 or 10 years from borrowing without a creditworthy cosigner. There are, however, exceptions if the bankruptcy was initiated for reasons beyond the borrower’s control, which should be discussed with your bankruptcy attorney.

Q. I’ve filed once and now I have to file for a second time, is there a time period where you cannot declare a second bankruptcy?

Generally, you can only file for Chapter 7 bankruptcy every 8 years. You can file for a Chapter 13 anytime after your Chapter 7 discharge to pay off any remaining liens, avoid foreclosure, or an opportunity to catch up on arreages.

Q. Are there certain things that can be done to prevent personal information after bankruptcy from being made public?

Well, both state and federal laws require that personal information in bankruptcy petition and schedules be redacted, so they do not become public information by virtue of filing for bankruptcy. As of Dec 1st, 2009, a new law came out that required every bankruptcy filing must have all personal information redacted. Personal information is virtually unavailable.

Bankruptcy Part 3 Q&A: Podcast Transcript from the Law Office of Cecilia Chen, providing legal services in San Diego in: bankruptcy, estate-planning, real-estate, and corporate law.

This is part 3 of a 3 part series discussing questions on the topic of bankruptcy. All of our information is provided with the California legal system in mind, specifically devoted to San Diego and area.

Keep in mind that this podcast and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

Some questions posed in this session include: what is the homestead exemption in California, are my private details protected in bankruptcy proceedings, and how are married couples treated in bankruptcy?

The purpose of these podcasts is to provide listeners with legal information pertaining to a variety of subjects including bankruptcy, real estate, estate planning, and corporate law.

Bankruptcy Part 3: Private Information and Home Equity from the Law Office of Cecilia Chen, providing legal services in San Diego in: bankruptcy, estate-planning, real-estate, and corporate law.