Bankruptcy attorneys are noticing a trend that could indicate an upcoming recession. The number of bankruptcy filings has long since been used as an economic indicator, and bankruptcy attorneys are reporting their filings have increased.
Bankruptcy filings are still at a much lower rate than they were during the height of the 2007-2008 recession. Many economists are predicting another recession will begin by 2020.
This increase in bankruptcy filings, however, is not necessarily being seen in all 50 states. While more filings have been reported in states, such as Florida and Delaware, other states have not seen the same.
For the most part, anytime a bankruptcy case is filed, or an account goes into default, it is seen as an indicator of the current economic climate, as well as a determining factor as to what is to come.
However, other financial signs can point towards the coming of a recession, including the number of consumers who are delinquent on their mortgages, as well as their car loans.
According to numbers from the Federal Reserve, an estimated seven million American consumers are currently behind by at least three months on their car payments. In comparison, this figure was one million less in 2009, which was the peak of the Great Recession.
The number of retail companies filing for Chapter 11 bankruptcy could also be an indicator of an upcoming economic decline. Recent corporate Chapter 11 bankruptcy filings have included Sears, Toys “R” Us, Sports Authority, CTI Foods, Z Gallerie and the publisher, F+W, just to name a few.
While a number of bankruptcy law firms have reported an increase in filings, they have not jumped the gun on hiring more associates just yet, although it could be a distinct possibility in the future in the event the uptick becomes an upswing in filings. For the most part, bankruptcy filings are relatively recurring, however, some law firms are trying to be cautious in timing out how they handle their workloads.
Other factors that could be behind the increase in bankruptcy filings, include family issues or business disputes between partners. The increase, economists argue, still points to an economic downturn approaching.
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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.
