San Jose foreclosures pushed bankruptcies to a 20-year high record of almost 11,500 business and personal bankruptcy filings in 2009, according to data from the U.S. Northern District Bankruptcy Court based in San Jose.

Total bankruptcy filings in 2009 marked a 50-percent increase from filings in 2008 and an increase of 200 percent over the past couple of years. The San Jose court, which covers the counties of Santa Cruz, Santa Clara, San Benito and Monterey, has been seeing more filings from people who were previously earning six-digit annual incomes and who suddenly found themselves unemployed after companies collapsed and closed.

San Jose lawyer Norma Hammes, former head of the National Association of Consumer Bankruptcy Attorneys, said that she is now working every day of the week for 10 hours each day because of the substantial rise in the bankruptcy cases she is handling. She said many of her clients were earning annual incomes of around $200,000 before they were laid off.

Hammes also said that the Obama program of rescuing distressed properties has not been effective because most homeowners cannot refinance under the loan-home value restrictions of the program.

Mountain View lawyer Cathy Moran said that the number of San Jose foreclosures will increase because lenders have been holding off on their foreclosure actions to suit their purposes, making a big backlog of properties in the last stages of foreclosure.

In the third quarter last year, foreclosure filings, including already repossessed homes such as VA repo homes, in the San Jose metro area continued to increase, posting a jump of nearly 29 percent over a 12-month period.

Moran also said that the closure of enterprises that have been operating for two or three decades has put many professionals earning six-digit figures into bankruptcy. It is especially difficult for families with both spouses losing their jobs simultaneously.

Typically, people with modest income file for Chapter 7 protection, under which most types of debts are forgiven. People with higher incomes and more assets filed for Chapter 13 protection, under which some debts are discharged while other debts need to be repaid through trustees. Chapter 7 typically lasts for three months while Chapter 13 lasts for years, as borrowers pay their unforgiven debts.

While debtors work out their credit card and other debts through bankruptcy hearings, they can also work with nonprofits to work out loan modifications for their mortgages.

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