A recent article published by the St. Petersburg Times reiterates the fact that although bankruptcies and foreclosures have actually decreased in Florida the past couple of months, the worst may not be over.
Earlier this month, our blog discussed how foreclosures were at a 3 ½-year low in January, but economists warned consumers about interpreting the numbers too positively. After last fall’s debacle concerning robo-signing and other questionable foreclosure practices of banks and lenders, the foreclosure process was put on hold for many cases while practices were reviewed. Now many are expecting bankruptcies to rise once again in Florida as foreclosures pick up after banks and lenders resolve last fall’s issues.
Bankruptcy filings fell nationally during January. Although there were just over 90,000 bankruptcy cases filed across the country last month, it was the first time in over a year that bankruptcy filings did not exceed 100,000. The number of bankruptcy cases filed during January in Tampa fell 21 percent compared to last January’s filings. Unfortunately, the decrease in filings does not suggest that Florida consumers are experiencing any less economic strain; it may mean that the stress has only been temporarily relieved.
Many suggest that the decrease in bankruptcies is linked to the foreclosure process being forced to slow down during the end of 2010. Homeowners have been given a little more time before facing foreclosure, relieving the pressure to file bankruptcy. When homeowners fear that they will lose their home to foreclosure, they tend to seek bankruptcy protection in efforts to save their house.
Many Florida homeowners do not realize that they can file bankruptcy before they are at risk of foreclosure. While the foreclosure process was slowed down, individuals were only given more time to accumulate debt and default on their accounts even more. Personal bankruptcy lawyers understand the economic stress individuals are dealing with, but they help individuals understand that there are ways to alleviate debt so that consumers can get their finances back on track while possibly keeping their homes.
St. Petersburg Times: “Bankruptcy filings, like foreclosures, expected to pick up again,” Jeff Harrington, 25 Feb. 2011