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Bankruptcy in Florida, Part 1

Did you know provision for bankruptcy is in the Constitution?


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Overview of bankruptcy filings in the U.S.


An August 2011 news release from the U.S. Courts says, “According to statistics released today by the Administrative Office of the U.S. Courts, bankruptcy petitions filed in the 12-month period ending June 30, 2011 totaled 1,529,560, down 2.7 percent from the 1,572,597 bankruptcy petitions filed in the 12-month period ending June 30, 2010.

“Despite the slight drop in overall filings nationwide, the number of bankruptcy filings increased in 19 of the 94 districts. The largest percentage increases in bankruptcy filings were in the Southern District of Florida, with a 15 percent increase over 2010, and the Districts of Utah and the Central District of California, where filings for the 12-month period ending June 30, 2011 increased 13 percent over 2010.”

Statistics for Florida


From Pensacola to Homestead, from Naples to Jacksonville, Florida residents from coastal cities to inland areas realize recognize the devastation that has been wreaked upon the economy of the Sunshine State. A Nov. 1 brief in the Sun-Sentinel reports "Bankruptcies in South Florida fell 18 percent from last year," and says in the story that "South Florida residents filing for bankruptcy rose by 2 percent in October, to 2,656 from 2,601 a month ago -- most of the increase was in Miami-Dade County, according to data from the U.S. Bankruptcy Court in Miami on Tuesday.

"But bankruptcies continued to fall when compared to last year, down 18 percent since October 2010."

Resumption of foreclosures a concern


However, "Bruce Rosenwater, a bankruptcy lawyer in South Florida, said bankruptcies have closed as foreclosures have stalled in the courts. 'As foreclosures pick up, people are going to realize they have to file.' "

Filings fell from '06 to '07--then started climbing


According to bankruptcy stats from the U.S. Courts, bankruptcy filings in the Northern District of Florida dropped 26.5 per cent from September 2006 (3,658) to September 2007 (2,688); In the same time period, filings in the Middle District fell 25.9 per cent, from 31,092 to 23,027; in the Southern District, the drop was 37.6 per cent, from 17,396 to 10,857.

2007-2008: a marked reversal


From September 2007 to September 2008, however, the trend took a marked reversal: in the Northern District, bankruptcies rose  41.7 percent, from 2,688 to 3,808; Middle District, an increase of 68.2 per cent, from 23,027 to 38,725; and in the Southern District an increase of 71.0 per cent, from 10,857 to 18,562.

Rates rose again, '08-'10


For the same month-to-month span 2008-2009, the numbers climbed again: 39.5 per cent in the North; 49.7 per cent in the Middle; and 49.1 per cent in the South. The 2009-2010 period saw some relief in the North and Middle districts, where the rates rose once again but only 3.8 and 15.4 per cent, respectively; however, in the troubled South rates again climbed above 40 per cent, logging in at 41.5 per cent.

So, what is bankruptcy, exactly?


Although these numbers tell a frightening tale of the number of people hurt during the financial crisis fueled by lack of government regulation and the excesses of the finance sector commonly referred to as Wall Street, they also offer hope for a new start. In the USA, we long ago recognized the folly of sending people to debtor’s prison, where they could no longer service any debt at all and were removed both from the economy (sales tax, payroll tax) and the property tax base.

In fact, the national recognition of the validity of debt relief traces to the birth of the U.S.A., as bankruptcy is specifically listed in Section 8 of the Constitution among the several powers that Congress shall have (namely): “To establish a uniform rule of naturalization, and uniform laws on the subject of bankruptcies throughout the United States. . .”

Next, in Bankruptcy in Florida, Part 2: the powerful protection of the Bankruptcy Code; role of the attorney; a personal story.

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