Kevin's Corner
Practice Management Tip on:
Tapping into Online Video
"Utilizing online video is a great way to not only establish your expertise as a bankruptcy lawyer but to also get your name and face out there to the public and to possibly even make contact with future clients.
"We've all seen how popular online video has become in the last couple of years with the evolution of websites like YouTube. With the capabilities of uploading video to the Internet so easy nowadays—people can simply take videos with their camera phones and have them online in minutes—it is definitely worth exploring how you can take advantage of this phenomenon.
"For practicing bankruptcy lawyers like ourselves, it can be as quick and easy as filming a series of short videos somewhere in your office. Perhaps you dispel bankruptcy myths like I did in this series of videos. Maybe you answer frequently-asked questions about filing bankruptcy. Perhaps you just film a short introduction of yourself, explaining who you are and how you'd like to speak with consumers visiting your site about their current financial situations.
"As you can see, it's ultimately up to what you want to do when it comes to creating video. With digital camcorders more and more affordable, a plethora of online editing software to choose from, and sites like YouTube allowing you to post your videos and then embed them on your own site, creating online video may not require as much effort as you may have originally thought.
"And even if videos do not generate many contacts for you right away, they can still be effective by simply increasing the user experience on your website, which may feel more personalized to the visiting consumer and thus set itself apart from the sites of your local competitors.
"Sometimes a short video in which you introduce yourself to your audience and portray yourself in a positive light can be enough to make that all important connection with the consumer, who may be more inclined to take the next step and speak to you on the phone or in your office."
- Kevin Chern
President, Start Fresh Today
Top Five States for Bankruptcy Filings Per Capita
As if we haven’t thrown enough numbers at you in this newsletter’s feature article, check out the top five states for bankruptcy filings per capita in the recent data from the Administrative Office of the U.S. Courts.
| State and Rank |
Filings Per Every
1,000 People |
| 1. Tennessee |
6.7 |
| 2. Georgia |
5.45 |
| 3. Alabama |
5.29 |
| 4. Illinois |
5.16 |
| 5. Michigan |
4.82 |
Debtors Express Great Satisfaction with Debtor Education Programs
Under BAPCPA, the Director of the Executive Office for U.S. Trustees (EOUST) is required to examine the effectiveness of mandated personal financial management courses, also known as debtor education.
Here are some of the more interesting results from a recently-released EOUST evaluation of 2,949 consumer bankruptcy debtors from April 1-December 31, 2006:
- Nearly all of the debtors surveyed—97 percent of them to be exact—expressed high satisfaction with their debtor education course.
- Nearly 44 percent of those surveyed acknowledged at least one change in their financial practices as a result of taking a debtor education course.
For more on such findings, check out the following Report to Congress: Evaluation of Instructional Classes in Personal Financial Management for Consumer Bankruptcy Debtors.
And remember that you can satisfy both your credit counseling and debtor education requirements under BAPCPA at Start Fresh Today.
The Presidential Candidates on the Issues Closest to Our Hearts
OK – so it's now been made official since our last newsletter: it's going to be U.S. Senator Barack Obama (D-IL) versus Senator John McCain (R-AZ) in this year's presidential election.
So what are the candidates' stances on the issues that have priority to bankruptcy lawyers? Learn more in our examination below:
South Carolina Bankruptcy Exemptions Update
Did you know that a new South Carolina bankruptcy law allows for more money and higher property values to be exempt from creditors who seek to recover debts?
Get the specifics about these updated South Carolina bankruptcy exemptions, which have already gone into effect, in the following article:
In Related News…
Bloomberg.com recently ran an interesting story on the foreclosure rate in military towns. Give the following article a read; it's definitely worth the time:
Bankruptcy Article of the Week
Bankruptcy Filings Continue Ascent
On June 3rd, the Administrative Office of the U.S. Courts released statistics on the total number of bankruptcy filings in the federal courts for the 12-month period ending March 31, 2008, and the findings hit on a key point that we've been making since the inception of BAPCPA and this newsletter: despite the "new hurdles" presented by the 2005 bankruptcy law, consumers will not be swayed from filing bankruptcy when it comes to addressing their financial problems, and larger issues than lender paranoia exist as to why so many people have to file bankruptcy.
The proof is in the numbers:
- Bankruptcy filings in the federal courts were up roughly 30 percent for the 12-month period ending March 31, 2008 as compared to the 12-month period ending March 31, 2007.
Bankruptcy Filings in Federal
Court for 12-month period ending: |
Percent Change |
| March 31, 2007 – 695,575 |
+ 29.67% |
| March 31, 2008 – 901,927 |
- The majority of bankruptcy filings for this recent 12-month period consisted of non-business filings, what we more commonly know as personal or consumer bankruptcy filings, which were also up when compared to the same 12-month time period for 2007.
Consumer Bankruptcy Filings
for 12-month period ending: |
Percent Change |
| March 31, 2007 – 673,615 |
+ 29.33% |
| March 31, 2008 – 871,186 |
- There were increases in both Chapter 7 and Chapter 13 filings in the 12 months concluding at the end of March 2008 as compared to the same time period at the end of March 2007. More specifically, Chapter 7 bankruptcy filings were up nearly 36 percent while Chapter 13 bankruptcy filings increased by nearly 21 percent.
Chapter 7 Bankruptcy Filings
for 12-month period ending: |
Percent Change |
| March 31, 2007 – 413, 294 |
+ 35.5% |
| March 31, 2008 – 560,015 |
Chapter 13 Bankruptcy Filings
for 12-month period ending: |
Percent Change |
| March 31, 2007 – 276,649 |
+ 20.93% |
| March 31, 2008 – 334,551 |
And then there are these other figures from the Administrative Office of the U.S. Courts for first quarter bankruptcy filings in 2008.
- Total bankruptcy filings for the first calendar year quarter of 2008 (January 1-March 31, 2008) were up significantly from the same time period last year.
Total Bankruptcy Filings for
First Calendar Year Quarter of: |
Percent Change |
| 2007 – 193,641 |
+ 26.88% |
| 2008 – 245,695 |
- A comparison of bankruptcy filings in the first calendar year quarter of 2008 as compared to the fourth calendar year quarter of 2007 (October 1-December 31, 2007) reveals another increase.
Total Bankruptcy Filings for
2008 First Calendar Year
Quarter (245,695) compared to: |
Percent Change |
| 2007 Fourth Calendar Year Quarter – 226,413 |
+ 8.52% |
What It All Means!
While the credit industry complained how bankruptcy was too often abused by people in order to escape their debts prior to the 2005 law, these statistics as a whole further reveal how the lobbyists for this industry were spewing nothing but paranoia.
Hmm, could it just be that more consumers are filing bankruptcy after the mass influx of filings prior to the new law as a result of these tough economic times marked by massive consumer debt, the home foreclosure and mortgage crisis, increased job losses, and a receding economy?
University of Illinois Law Professor Robert Lawless' analysis of May bankruptcy filing stats from Automated Access to Court Electronic Records (AACER) would seem to validate this self-evident truth:
- There were 89,560 total bankruptcy filings in May.
- There were approximately 4,266 bankruptcy filings per day in May, with Lawless coming up with that figure by dividing those 89,560 bankruptcy filings by the 21 business days in the month.
- The daily filing rate in May 2008 was up 34 percent from the daily rate in May 2007.
- As of the end of May 2008, there have been 423,000 bankruptcies filed in 2008, with the daily filing rate of 4,026 being 30 percent higher than the daily filing rate of 3,093 for the first five months of 2007.
For more of Lawless' insight into May 2008 bankruptcy filings and an explanation of how there will likely by more than 1 million bankruptcy filings this year, check out this post on the always excellent Credit Slips Blog
Legislative Update: Protecting Consumers in Midst of Business Bankruptcies
What we didn't talk about in the previous article are the recent numbers for business bankruptcies for the 12-month period ending March 31, 2008.
Like consumer bankruptcy filings, these totals were also up. Specifically, there were 30,741 business bankruptcy filings in this 12-month period, representing a 40 percent increase from the 21,960 business bankruptcies for the 12-month period ending March 31, 2007.
We've often talked about how business bankruptcies have a huge impact on consumers as these moves typically result in job losses that may spur on other economic problems for families.
With all this considered, the House Judiciary Subcommittee on Commercial and Administrative Law was scheduled on June 5th to reexamine issues brought up in H.R. 3652: Protecting Employees and Retirees in Business Bankruptcies Act of 2007, according to an American Bankruptcy Institute report.
Learn more about how H.R. 3652 would have protected employees and retirees in business bankruptcies right here, and be sure to check out future newsletters for updates on legislation addressing this important issue.
And for the latest updates on the effects of business bankruptcies around the country, check out the following excellent resources:
The Latest Tallies on the Foreclosure Crisis
While many people expressed shock when news broke during the last week that celebrities Ed McMahon and Evander Holyfield are both facing foreclosure, let's not forget the millions of other Americans in similar predicaments who receive much less recognition.
A recent story on CNNMoney.com continued to paint a grim picture of the current foreclosure landscape:
- According to a first quarter report by the Mortgage Bankers Association, a record 2.5 percent of serviced loans are now in foreclosure, which roughly translates to 1.1 million homes. In comparison, 2 percent of loans, or roughly 938,000 homes, were in foreclosure at the end of 2007.
- Also according to the report, 448,000 homes (roughly 1 percent of serviced loans) entered some stage of foreclosure in the first quarter of 2008.
To no surprise, subprime loans given to borrowers with less than stellar credit histories were the common culprit attributed in the story to these above statistics.
NACBA Pictures Coming Next Newsletter!