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Bankruptcies on the Rise in Southern California

A bag with the word Debt and an up arrow in the hands of a businessman. Receivables. The growth of debts for utilities and payment of salaries. High level. Overdue debt on loans. Loan and mortgage

Bankruptcy is never someone’s plan for their future, and never their first option when financial troubles arise. It can be unpleasant to face the economic reality that bankruptcy is the best remaining option. However, bankruptcies are incredibly common and are not the permanent scarlet letter that many fear them to be. Bankruptcy is a useful legal tool designed to help overwhelmed debtors get a new lease on their financial futures. Moreover, the economy appears to be in a perilous condition right now, and more and more people across the U.S. and in California, in particular, are finding bankruptcy to be the best route to regain financial stability. Recent data shows the current rise in bankruptcies in Southern California, exceeding both the national and statewide rate. While an increase in the number of bankruptcy filings is not a great sign for the economy, it is a reminder that if you are struggling with debt, you are not alone. A knowledgeable Southern California debt relief attorney can help you determine if, like thousands of other debtors in Southern California, bankruptcy is right for you.

Bankruptcy numbers in Southern California on the rise for the first time in eight years

According to a review of data from the American Bankruptcy Institute by the Orange County Register, the court governing Los Angeles and the surrounding areas saw a higher number of bankruptcy filings in the first half of 2019 than in the first half of 2018, representing the first jump in the number of filings this decade. The U.S. Bankruptcy Court for the Central District of California fielded 18,736 bankruptcy filings in the first half of 2019, a roughly two percent increase from the 18,303 filings for the same period in 2018.

The increase is significant: The total number of bankruptcy filings had been on a slow decline since 2015, when the first half of the year saw just over 24,000 new filings, following a sharp drop after 2011’s massive 70,500 filings triggered as part of the Great Recession. Nationally, the number of bankruptcy filings has been more or less stagnant since last year, although California saw an increase of about one percent in filings for the first half of the year statewide. Southern California is always one of the top two districts in terms of the total number of bankruptcy filings every year due to the district’s size in population and commerce. Southern California accounted for 4.8% of the bankruptcy filings nationwide so far in 2019 (notably less than the 9.6% share of bankruptcy filings the district claimed during the 2011 peak).

Talk to an Experienced Southern California Bankruptcy Attorney

If you or your company are struggling with debt and considering bankruptcy, please contact Rounds & Sutter for a free consultation. With offices in Ventura, Santa Barbara, and Westlake Village, we represent clients throughout Southern California, offering smart, compassionate legal counsel in the face of life’s challenges.