Bankruptcy in New York City is dropping; The economy is worse
As a Manhattan Bankruptcy Attorney, over the past few years I’ve witnessed a boom in Bankruptcy filings across New York City. Everyone was filing. Teachers, doctors, lawyers, the unemployed. Literally everyone. But there seems to be an absolute lull in the field now. Chapter 13 Bankruptcy filings in New York are down something like 65%. Many people attribute this to the fact that the ones who needed to file Bankruptcy have done so already. That there aren’t many left. I wholeheartedly disagree.
In the opinion of this Manhattan Bankruptcy lawyer, things are getting worse, not better. Unemployment hovers around 9% (those are the official numbers. The unofficial numbers are likely much worse). About 1 in 5 people is behind on his/her mortgage. People are underpaid, and many of them don’t have enough to out food on the table and pay the rent at the same time. Not everyone who was meant to file Chapter 7 Bankruptcy in Manhattan has filed Chapter 7 Bankruptcy in Manhattan. To the contrary, many people are still waiting for that next big paycheck or job to come in. They’re dealing with debt settlement companies when they should be filing. They’re spending more and more on interest and late charges when they could realistically be completely out of debt in approximately 90 days. They’re doing the same thing, but there is even less money to play with now.
In meeting with clients in our New York City office, we’re finding many potential clients have already run through their entire 401ks, accruing large fees to the IRS in the process. They’ve stopped paying rent in hopes that they’ll be able to find a cheaper apartment while still paying their credit card minimums (they have no choice but to live on credit cards). Things are getting worse, not better.
The advice has always been the same but I fear it still hasn’t sunk in. You’re wasting your money in almost every other scenario. The debt isn’t going away, nor is the stress. The credit card companies and debt collection companies aren’t going anywhere either. I can’t ever be clearer about this than I am now. You’re wasting money as things seems to be getting worse, not better. You’re paying debts that aren’t going away with money that could likely keep in a Bankruptcy filing. You may be wasting what money is left on this.