About Me
“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”
Bankruptcy Statistics
Written by Craig D. Robins, Esq.I just saw the figures that confirmed what we all knew. There was a tremendous increase in bankruptcy filings in 2009 over 2008 according to figures just released today from the Administrative Office of the U.S. Courts.
Thus, there has been nothing to stop the flood of consumers seeking bankruptcy relief. That certainly applies to consumers on Long Island.
In calendar year 2009 there were a total of 1,473,675 bankruptcy filings in this country. This represents an increase of 32% over 2008, during which time there were 1,447,641 filings.
Of the 1.4 million bankruptcy cases filed last year, 96% of them were filed by consumers.
Chapter 7 Bankruptcy is Up and Chapter 13 Bankruptcy is Down
The filing statistics reveal an interesting trend. More and more consumers are filing Chapter 7 bankruptcy as opposed to Chapter 13. In 2008, Chapter 7 cases represented 67% of all consumer filings. However, last year, the percentage grew to 71%.
The percentage of consumers filing under chapter 7 has increased each year since the bankruptcy laws were overhauled by BAPCPA in October 2005.
The effects of the recession and the high rate of unemployment continue to fuel the great numbers of consumers seeking bankruptcy protection. We are now seeing the highest number of bankruptcy filings since the bankruptcy laws were changed in 2005
Figures for Eastern District of New York
In our district, for the period ending Septermber 2008, there were a total of 20,508 filings. This broke down as follows: 16,790 Chapter 7 cases, 247 Chapter 11 cases, and 3,469 Chapter 13 cases.
Written by Craig D. Robins, Esq.
Bankruptcy filings are up across the country and Long Island is no exception. Newsday ran a story about this on Thursday, January 21, 2010 and quoted me. The article was written by Newsday reporter Emi Endo.
Here’s the article:
Bankruptcy Filings on the Rise
Amid continuing job losses and a housing market slump, more Long Islanders have been heading into bankruptcy proceedings, according to court data.
In November, 806 residents filed for bankruptcy protection, an 11.9 percent increase over November 2008. In all of 2008 more than 7,500 cases were filed in Central Islip. From January through November of last year, there were 9,200.
Woodbury bankruptcy attorney Craig Robins said his firm has seen an increase in the number of formerly well-paid professionals who were either laid off or took major pay cuts. “What we’re seeing now is many executives and individuals who were earning well into the six figures needing bankruptcy relief,” he said.
Also growing, Robins said, was the number of “homeowners whose homes are underwater” and who owe more on their mortgages than the properties are worth, a difference sometimes as much as $100,000.
Newsday periodically tracks economic indicators in this Long Island Economic Snapshot.
Among other economic indicators, home sales did go up in November - but so, too, did initial foreclosure filings. The number of homes sold in November was up 49.3 percent over the same month a year ago, as reported by the Multiple Listing Service of Long Island.
Written by Craig D. Robins, Esq.Last month I wondered: Is the Stock Market a Barometer for Consumer Bankruptcy Filings?
In exploring this concept further, I came across “the Misery Index” which is an economic indicator created by economist Arthur Oken in the 1960s. It is the sum of the unemployment rate and inflation at any given time.
Since it is assumed that both a higher rate of unemployment and a worsening of inflation create economic and social costs for a country, the higher the index, the greater the misery the country is facing.
A recent New York Times Economix Blog post discussed the Misery Index and commented that pairing these two indicators made sense not only because both are economic phenomena that hurt regular people, but also because efforts to reduce unemployment can elevate inflation, and vice versa.
Today there are large numbers of bankruptcy filings; however, the inflation rate is rather low. Thus, this Misery Index does not predict bankruptcy, nor does it necessarily predict the misery of the average middle-class American. What we need is a different Misery Index.
New Economic Misery Index Contains Bankruptcy as an Indicator
It appears that some economists have come up with a ”New Economic Misery Index which includes five sectors that show financial pain for Americans: Bankruptcy, Credit Access, Employment, Housing and Food Stamps.
Today, we have a more insidious version of economic crisis than what the old Misery Test measured. This is not necessarily what is good for the average American. In other words, the stock market may be going up, but Americans are still losing jobs and suffering. We therefore need to add a few more indicators to a new misery index.
The new five indicators are probably the best way to gauge the state of our economy. Economists looking at these figures see that despite the activity on Wall Street, there is really very little recovery. And that is what the typical middle-class American who comes to my office for a bankruptcy consultation can attest to.
Written by Craig D. Robins, Esq.After reading a recent New York Times article about stock market jitters caused by worried consumers, I wondered if the stock market indexes could be used as a barometer to predict future personal bankruptcy filings.
After all, we have often heard that the fear on Wall Street is that nervous consumers can short-circuit the country’s economic recovery, which is just starting to pick up, despite the fact that consumer bankruptcy filings continue in very high numbers.
When consumer sentiment falls significantly short of expectations, which is what happened towards the end of the summer (before a slight rebound), it was a sign that consumers were cutting back on their spending as they worried about layoffs. With unemployment approaching ten percent, many consumers are growing increasingly concerned about losing their jobs, assuming they still have them.
Job loss is one of the major reasons why consumers file for bankruptcy help. I see this daily in my Long Island bankruptcy practice, meeting one person or another who has lost a job, lost the ability to work overtime, or has a family member who was laid off.
Although the stock market is indeed rebounding, I would conclude that the ebbs in the stock market have a rebound effect and lead to increased consumer bankruptcy filings several months (or even years) later, as consumers face job loss or the effects of reduced income.
Written by Craig D. Robins, Esq.
Individual Bankruptcy filings have continued to increase this year, bringing the filings for those overwhelmed by consumer debt to new highs since the bankruptcy laws were overhauled in 2005.
Nationally, the 135,913 consumer bankruptcy filings in October represented a 27.9 percent increase over last October’s monthly total of 106,266.
The above graph, courtesy of the Calculated Risk Blog, shows consumer filings on a quarterly basis going back to 1996. We are now approaching the levels seen just prior to when the bankruptcy laws were changed in October 2005.
The filings have increased virtually every single quarter since 2006. I previously wrote about Bankruptcy Filings Returning to Pre-Amendment Levels .
Through October, there have been 1.18 million personal bankruptcy filings in the U.S.
Written by Craig D. Robins, Esq.Even though some economists recently suggested that the recession may be abating, such projections weren’t apparent in figures just released showing that personal bankruptcy filings have reached 1.25 million for the one-year period ending June 30, 2008, an increase of 34% over the year before.
As I reported previously, we are on our way to a record high number of filings not seen since the bankruptcy laws were changed in 2005. See Bankruptcy Filings Returning to Pre-Amendment Levels .
Many of my Long Island bankruptcy clients complain that they are no longer able to refinance their homes or get additional credit, a situation where filing bankruptcy becomes the only reasonable solution for dealing with excessive credit card debt. When you add job loss and other unexpected life events, paying credit card debt for Long Islanders can become impossible.
Written by Craig D. Robins, Esq.
As the recession took hold of the economy, bankruptcy filings have surged from prior levels.
As indicated in the chart below, which was based on data from Automated Access to Court Electronic Records (AACER) , New York had 28,623 bankruptcy filings in the first half of the year.
Of those filings about 80% were Chapter 7 cases and 20% were Chapter 13 cases.
Based on per capita filings, New York only ranks 37th among all states. The state with the most filings per capita was Nevada with 10.58 bankruptcies per capita
| 2009 Bankruptcies for New York
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Ratio of filings  |
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| Cumulative 2009 filings | 28,623 | |
| Filings per capita (1,000 people) | 2.94 | |
| State rank based on per capita filings | 37 | |
| Total population (July 1, 2008, estimated census) | 19,490,297 | |
| Increase or decrease in per capita filings, 2009 (annualized) over 2008 | 0.54 | |
| Rank based on greatest annual per capita increase | ||
Written by Craig D. Robins, Esq.
Last month, for the first time since the Bankruptcy Amendment Act had the effect of radically changing the bankruptcy laws in October 2005, the daily number of nationwide filings surpassed the 6,000 mark.
This represents a whopping increase from last year of over forty percent.
Professor Robert Lawless, of the University of Illinois College of Law, provided some interesting commentary on these statistics in a post this week appearing in the Credit Slips blog. He suggests that if bankruptcy filings continue at this level, there will be about 1.5 million bankruptcy filings this year. That is right on par with the level of filings from 2005, just before the bankruptcy law changed.
Chart courtesy of Robert Lawless, Credit Slips
Written by Craig D. Robins, Esq.
How much do the Long Island Chapter 13 trustees earn each year?
How many cases to they have?
What are their expenses?
Here are the answers
The United States Trustee Program, which is administered by the United States Department of Justice, requires all Chapter 13 bankruptcy trustees to report detailed figures about their office finances, as well as the distribution of funds collected through Chapter 13 plans.
There are only two Chapter 13 trustees on Long Island
On Long Island, there are only two standing Chapter 13 trustees: Long Island bankruptcy lawyer Michael Macco, who also maintains a private bankruptcy practice in Melville (Macco & Stern), and Marianne DeRosa, who limits her practice of law to Chapter 13 bankruptcy trustee matters. These two chapter 13 bankruptcy trustees carry the entire Chapter 13 caseload for all of the bankruptcy courts in the Eastern District of New York, which include Central Islip and Brooklyn.
Audited report reveals interesting data
According to the audited report covering 2008, which was just released last week, here are some of the more interesting details:
How much do the trustees earn?
Both Michael Macco and Marianne DeRosa each earned a salary of $177,526. This figure is the maximum possible salary that a Chapter 13 trustee can earn in this country, and it is set by statute.
Which trustee is more generous with salaries?
Marianne DeRosa paid employee salaries of $512,826, whereas Michael Macco paid salaries of $363,600.
Which trustee had more cases in 2008?
If Marianne DeRosa paid out much greater salaries, did this mean she had a much busier office? At the end of 2008 she had 1,639 Chapter 13 cases, whereas Michael Macco had a hundred less – 1,568 cases.
During the year, Marianne DeRosa received 1,924 new cases while Michael Macco received 1,786.
Which trustee talks more and sends out more mail?
As we all know, Michael Macco talks a lot and probably sends out more motions to dismiss. His phone bill and postage expense was much more: $35,456 compared to Marianne DeRosa’s at $22,647.
The total cost to run Marianne DeRosa’s office in 2008 was $1,007,605, whereas the office cost for Michael Macco was $760,525.
Which trustee had the most cases dismissed in 2008?
Chapter 13 trustees bring many motions to dismiss, and many of them are successful. In 2008, Marianne DeRosa had 1,275 of her cases dismissed prior to confirmation and 219 dismissed post-confirmation. Michael Macco had 1,131 cases dismissed prior to confirmation and 260 dismissed post-confirmation.
How many debtors actually completed their plans?
With Michael Macco as trustee, there were 170 cases with completed plans in 2008. However, Marianne DeRosa had a much higher success rate for the year – 250 cases.
How much money did the trustees take in?
During 2008, Marianne DeRosa took in a total of $13,108,881, whereas Michael Macco took in $11,449,324.
How much did the trustees pay out in attorney’s fees?
This may come as a surprise to many. Michael Macco paid out the higher amount – $946,588 to Marianne DeRosa’s 715,265.
What was the actual commission amount?
Although all plans provide for a 10% commission to the trustee, the actual amount is based on what the trustee’s expenses actually were. With both trustees, this amount was 9.7%.
Written by Craig D. Robins, Esq.
A few weeks ago I wrote that bankruptcy filings across the country rose 31 percent in 2008. (Bankruptcy Filings Surged in 2008).
The number of bankruptcies filed in the twelve-month period ending December 31, 2008, totaled 1,117,771, up from 850,912 bankruptcies filed in 2007.
Filings are now averaging well over one million per year. Here we have a chart that shows how the numbers are steadily increasing.