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1.6 Million Bankruptcy Cases in 2010; But the Recession's Over, Right?

By Joseph McDaniel, Esq.

I recently read a nifty article that talks about numbers and bankruptcy.

The article is in the Wall Street Journal, and the most interesting part of the article, to me, was the throwaway line, "in the recession's aftermath".

Now, I wasn't surprised to hear that bankruptcy filings had reached a five-year high; that was obvious to those of us in the bankruptcy trenches.

And I wasn't surprised to hear the reasons that the Wall Street Journal trotted out for the large number of bankruptcy cases that had been filed, and were going to be filed. Job losses, tight credit, and the other usual suspects are...well, the usual suspects!

But the idea that the recession was receding in the rear-view mirror took me a little by surprise.

Now, I'm not smart enough to be an economist, or a statistician, or an economic analyst. I'm just a simple back-country bankruptcy lawyer.

But I tell you without any joy whatsoever that the depression is still with us, and will get deeper and worse.

And if I'm wrong, I'll buy the champagne! Because on this issue, I'd love to be wrong. And maybe I am!

But I don't think so.

p.s. why would somebody who has a business that does a million dollars a year in volume file a bankruptcy? Because he has two million a year in overhead! We'll talk more about that as time goes on, because bankruptcy can be the best friend of a small business owner. Generally not in the shape of a Chapter 11, however.

p.p.s. there comes a point during a depression when bankruptcy filings slow down. Why? Because everybody who needed to file has already filed. But we're way up the road from that point.

Full post as published by Arizona Bankruptcy Attorney Blog on December 03, 2010 (boomark / email).