Personal bankruptcies surge in Southern California - biggest jump in the nation, up 75%

[Liberal_in_LA]

http://www.latimes.com/business/la-fi-cover-bankruptcy28-2009jun28,0,183018.story

Personal bankruptcies surge in Southern California
The region had the nation's biggest percentage jump in 2008, and the number this year through April is up 75% despite a 2005 rule overhaul aimed at curbing filings by those who would benefit unfairly.

By David Colker
June 28, 2009

Going legally broke has made a big comeback -- especially in the Los Angeles area -- despite a mid-decade revision to the U.S. Bankruptcy Code intended to curb filings.

The number of Southern Californians seeking bankruptcy protection nearly doubled in 2008 from 2007 in the U.S. Bankruptcy Court's seven-county California Central District, by far the biggest increase in the nation.

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Bankruptcy experts attribute the growth mainly to the mortgage meltdown, which hit the region's adventuresome borrowers particularly hard. Add soaring credit card debt and medical expenses, and people who never thought they'd see a bankruptcy courtroom are lining up with petitions in hand.

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The reason most turn to bankruptcy strikes close to home.

"It's real estate," said Encino bankruptcy attorney David S. Hagen, who conducts free seminars for homeowners organized by the nonprofit Neighborhood Legal Services.

"People got sold a bill of goods on some kind of nontraditional mortgage and thought they could change it when the worth of their house went up. But the worth went down and the payments went up," he said. "They start to live off of their credit cards."

By the time Norris Daniels of Sherman Oaks made it to the self-help desk staffed by Neighborhood Legal Services at the Woodland Hills Bankruptcy Court division, he had racked up $47,000 in credit card debt.

His house troubles consisted mostly of storm damage repairs that spiraled out of control. The house eventually sold, but then came a divorce and support for his mother when she was ill.

According to a recent study by Harvard researchers, doctor and hospital bills plus other costs because of illness contribute to about 60% of bankruptcies.

[bluestateguy]

1. My sympathy is selective

None for the housing bubble speculators ("flippers"), or the twits who entered into mortgages they had no prayer of repaying---even while gainfully employed.

But I DO have sympathy for the people forced into bankruptcy due to medical bills or long-term unemployment.

[sam sarrha]

2. CA's only hope is to split into 2 states, so the northern taxes stay in the north .. LA will sink em

[Liberal_in_LA]

3. hey! I'm a Los Angeleno. a little respect please. I pay taxes

:hi:

[sam sarrha]

4. that way your taxes stay local...!!