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Sacramento, CA Area Bankruptcy Filings Down in 2011.
Sacramento-area bankruptcies down in 2011
(Source: By Rick Daysog, The Sacramento Bee, Calif.) –Since the start of the economic meltdown, Sacramento has been awash in a tsunami of bankruptcies.
But for the first time in five years, the number of new bankruptcy filings is down, falling 13.1 percent in 2011.
“First you had the tidal wave, then you had the high water and (now) it’s … beginning to recede very slowly,” said Folsom bankruptcy attorney Gerald White.
According to the U.S. Bankruptcy Court, 29,686 new cases were filed in the Sacramento region this year, compared with 34,164 in 2011.
The number of filings is still the second-highest for the region, and bankruptcy experts say they expect filings to remain at heightened levels for some time.
Still, the ebb and flow suggests that the local economy is trying to find a bottom after falling precipitously for the past five years.
Bankruptcy Court statistics show that personal bankruptcies in the form of Chapter 7 liquidations dipped more than 15 percent to about 21,000 cases in 2011.
Business bankruptcies in the form of Chapter 11 reorganizations were off by about 8 percent to about 150 cases.
Rosanna Venturini, a financial specialist with Clearpoint Credit Counseling Solution, said she’s seeing little letup in the number of financially distressed people who come to her Arden Arcade office.
Venturini, whose company provides court-mandated pre-bankruptcy counseling for individuals who file bankruptcy, said too many have lost their jobs or have seen their income reduced severely.
Some face the prospect of losing their homes while others rack up credit card debt because they’re using what little income they have left to cover their mortgage or rent, she said.
But Venturini said she sees a glimmer of hope. That hope is rooted in the recent improvements in the local jobless rate, which dropped to a 2 1/2-year low of 10.9 percent in November.
Venturini said many of her clients are people out of work for two or three years. During the worst part of the financial crisis, few received job offers.
But in recent months, more of her clients have received a job offer or have been given a job interview, she said.
“I hope this turns into a trend where jobs are created again,” she said.
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