Foreclosures Leading To Mushrooming Of Bankruptcies

November 19th, 2008 | Tags: Foreclosures

Attorneys opine that foreclosures are the main cause for the mushrooming of bankruptcies in Central Florida.

Neil Buchalter is a bankruptcy attorney and has been practicing for the last three decades in Melbourne, Merritt Island. He has been getting more foreclosure cases in a month compared to the numbers he got in a year hitherto. About 40% of his clients are seeking the protection of bankruptcy because of foreclosures. Previously the prime reason for bankruptcies used to be medical causes.

Neil also observes that more investors are coming in – something that was not the norm hitherto. He said, “You’ll see an elderly woman who’ll come in and she’ll own five homes. You just wouldn’t see that in years past.”

In four months there have been 820 foreclosure filings creating a record of sorts in Brevard. The Orlando middle region of Florida consists of the counties of Brevard, Orange, Lake, Osceola and Seminole. Each year foreclosures have increased by 3,500 numbers from 2006. In October 4,300 bankruptcies were filed. This year for the first ten months 10,533335 foreclosures have been posted – the figure being close to the total number of foreclosures in 2006 and 2007.

Billy Thomas of Melbourne is an attorney. He quipped, “One out of every two walking in is probably due to a foreclosure problem, and it may be higher than that.” He said that five years ago about 10% to 20% of his bankruptcy cases were related to foreclosures. He explained, “Medical (problems) are not fueling the bankruptcy cases for me. It’s been the foreclosures and the credit cards.”

The attorneys are of the opinion that financially secure persons are now being hit by bankruptcies after they took on unmanageable mortgages. Carole Suzanne Bess of Merit Island said that they were struggling hard although they really did not do “anything wrong.” This year she has handled 200 bankruptcy cases. Her clients have come to her with harrowing tales of borrowing to feed children. The affected are coming from all walks of life. All they did was to follow the advise of so called well-wishers. Many of her clients are her personal friends. Her foreclosure related bankruptcy cases have swelled from 20% to 80%. 20% are because of medical causes. This percentage has remained as before.

Bankruptcies are affecting not just Florida but the entire nation. Americans are weighed down with credit card debts amounting to $900 billion. Bankruptcies have become a national malaise.