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June 26, 2004 - Subscribe - Contact Us - Rate Card - Place an Ad Valley&State Backpage O&E Sports Archives Classifieds Faith&Beliefs Obituaries Revels March 25, 2004 Bankruptcies rising locally By Steve Zimmerman Ashland Daily Tidings It has become more common in this day and age for single working people, as well as two income families, to experience financial difficulties. It's no surprise that bankruptcy claims are also on the rise. "We have seen an increase in bankruptcies," noted Michael Balocca, an Ashland bankruptcy attorney. "And interestingly enough, we have seen a large increase in the last two to three months." Balocca said it is difficult to put a finger on any one cause for the increase. "But certainly a lot more people are out of work right now," he said. "And I think the other problem we have is that a lot of people have relied on credit cards to support themselves when they have been out of work. And they have gotten themselves into trouble that way." Two-income family bankruptcies are also on the rise. "I do see a lot of those," Balocca said. "In fact, in my office, married couple filings outnumber single filings by three to one. It is very, very common. "The fact you have two wage-earners in the family does not shield them to any great degree from having to file bankruptcy." There has been a stigma surrounding filing bankruptcy. But, as Balocca noted, it does you no good to resist. "I would say that probably about 70 to 80 percent I see in my office are reluctant to do it," he said. "A lot of them feel there is a stigma attached." Balocca spoke about a case he recently had in his office. "I had a gentleman in this afternoon who indicated he had been delaying doing this for quite some time," he said. "He said he felt it was something you just don't do. And he was raised to expect to have to pay your bills and meet your obligations. I think most people feel that way." Balocca said he limits himself on the consumer side to Chapter 7, which is a straight liquidation. But he does also see small-business owners or self-employed individuals. "We don't see many Chapter 13 bankruptcies at all, primarily because most people do not qualify for a 13," he explained. "Oddly enough, in a 13, you have to have income to qualify. You have to be able to put together an payment plan and most of the people I see don't have enough money to make a payment plan. "I do find that a lot of people come in thinking they will make payments. Or they want to or think they will be required to make payments. Many of them come in very interested in a Chapter 13. But after I get done analyzing their information, I find it is not an option for them. For every 10 people that come in interested in doing a 13, one qualifies for it." Even if you file for a Chapter 7, Balocca tells his clients there is nothing stopping them from paying their debts in the future. Balocca said there is a big misunderstanding about credit after you file a bankruptcy. "If your credit has basically been destroyed by your situation over a period of time, filing a bankruptcy is not going to worsen the situation, it is going to help it," he said. "You are clearing the way to create a new positive credit rating by showing that you can handle debt responsibly. If you hang on to a bad situation for a great length of time and you continue to fall further behind, all you are doing is enhancing a bad credit rating." Once a bankruptcy is filed, people find themselves receiving credit card offers, car loan offers and even home loan offers. Balocca said there are a couple of reasons that happens. "Part of the reason for that is that once you filed your bankruptcy, you can't file again for at least eight years," he said. "They know you cannot wipe their debt out so it makes you something of a solid bet. Also your decks are clear so theoretically you have some cash flow freed up to incur some more debt." Balocca said each year the government tries to change bankruptcy laws. And each year those attempts are beaten back. "Congress has tweaked the law a little bit but not a whole lot," he noted. "They have been saying for 10-15 years now that we are right around the corner from having a major change in Chapter 7 bankruptcies. But it just hasn't happened. It seems that every time the House comes up with a bill and the Senate comes up with a bill, they don't agree on a certain aspect and it never goes to a conference committee and they don't agree." People filing for bankruptcy go to court in Medford, even though the nearest federal district is in Eugene. "We are in the Eugene district," Balocca said. "Hearings with the trustee and other local hearings are held for the most part in the District Court House in Medford. "The bankruptcy courts are unique unto themselves. They have judges that deal with nothing but bankruptcies. They are kind of like circuit-riders. They will come out of Eugene and hit Medford, then go to the coast and probably to Bend." With no complications, Balocca said the entire process will take four to five months. That time period allows for certain built-in time frames, such as the 90-day time frame to hear objections from creditors to the filing. DailyTidings.com Home Page Valley&State | Backpage | O&E | Sports | Archives | Weather | Classifieds Columnists | Faith&Beliefs | Obituaries | Revels | Subscribe | Contact Us Copyright 2004 Ashland Daily Tidings and Ottaway Newspapers All Rights Reserved Click Here Site Search: .:Advertisements:. RESOURCES - Mail Tribune News - ODOT Road Cams