I recently read this article, “Bankruptcy Filings Are Low, But Not Everywhere“. Apparently, bankruptcy filings are at a 24 year low. This is not surprising, as so many people filed bankruptcy during the “Great Recession”. Basically, people who survived 2008, 2009, 2010, 2011 and 2012 without needing bankruptcy protection, were unlikely to need it in 2013 or 2014. Although bankruptcy filings are down, they are not nonexistent.
As befits such a dramatic trend, in which bankruptcy filings have dropped from record levels to new lows in only a few years, my office has felt the slow down. Still, we filed six chapter 7 petitions today (Four in Massachusetts and two in New Hampshire), and expect to file another half dozen chapter 7 petitions and two or three chapter 13 petitions in the next couple of weeks. As such, we too have experienced a significant drop in filings, but we are still serving clients. October through December are usually a slow time for bankruptcy filings. Most of our clients wait for their tax refunds, before they file. It is because we are not busy with actual filings at this time of year, and because tax refunds and bankruptcy are so inter-related that just last week, I put up my blog post “BANKRUPTCY, TAXES, PAYMENT PLANS AND A SPECIAL DEAL“.
In this blog post, I discussed the fact that the favored Fall payment plan seems to be to come in and deposit $200, so that we can make the creditor harassment stop for the holiday season and until the tax refund arrives. Then the client pays the remainder of the fee with the tax refund, and the petition is filed then. In that blog, I added a special deal – free individual income tax preparation for clients who take advantage of this payment plan. The deal is described in the blog. Soon I will amend it to mention that the free tax form also includes state taxes and Child Tax Credit and Earned Income Credit schedules. I neglected to include these in the special, because I never charge for them anyway. However, I was recently reminded that there are places that advertise “free” federal tax preparation, but then charge to file state taxes and for every schedule attached. I obviously do not want to be one of those.