As reported earlier this month, Florida is the fourth most economically stressed state in the nation. And while the U.S. Bankruptcy Middle Court District of the state saw a decrease in personal and business bankruptcy filings during the first quarter of 2011, some experts are saying that the lower number represents just a temporary pause and that overall the number of filings for the year will be even higher than the record-breaking number of filings in 2010.
According to sources, the Middle District, which includes Orlando, saw a 16 percent drop in Chapter 7 filings and a 15 percent decrease in Chapter 13 filings. In addition, Chapter 11 bankruptcies were also down by 32 percent.
Looking at year-over-year, during the first quarter of 2010 there were 16,149 filings. During that same time this year – which runs from January to March – there were 13,596 recorded filings.
And while this number might have some thinking that the trend will continue, some are saying that this decrease is just in response to a brief slowdown in foreclosures due to robo-signing practices being discovered. However, as the banks continue to ramp up their processes on foreclosure proceedings, the number of foreclosures will most likely continue to increase and more people will look at bankruptcy as a way to possibly hold on to their home.
In addition to the connection between foreclosure and bankruptcy, trends also point to the first quarter in some Florida counties typically having less bankruptcy filings but then increasing as the year continues on, which means that this decrease may just be nothing more than the norm for this time of the year.
Source: Financial News & Daily Record, “Bankruptcies declining after record 2010,” Karen Brune Mathis, 11 April 2011