Experts see more bankruptcy trouble in 2010 - WALB.com, Albany News, Weather, Sports

Experts see more bankruptcy trouble in 2010

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By Jim Wallace - bio | email

ALBANY, GA (WALB) –2009 was a disastrous year economically for many Georgians.  Unfortunately the New Year promises more of the same.

Georgia had the third highest bankruptcy rate in the nation,  and the North Georgia region topped the nation in bankruptcies.

One in 50 households in the state declared bankruptcy in the first 11 months of 2009.

Bankruptcy experts say high unemployment, a crashed real estate market, and laws that help creditors more than consumers caused Georgia's high rate of personal bankruptcies. Now, commercial bankruptcies are increasing as well.

South Georgia newspapers continue to run page after page of foreclosure notices. Bankruptcy Trustee Walter Kelley's workload overseeing Chapter 7 filings is skyrocketing.

Kelley said "Usually I have around in the 40's. But now I'm handling between 150 and 200 cases a month as a trustee in the Valdosta division, Columbus and Macon."

Kelley says many out of work South Georgia families are filing for bankruptcy, but so are couples who both have jobs, but are buried in debt and losing their house. He talked about one typical family's trouble. Kelley said "They are paying about $1100 a month to live there. Which is almost one third of what they take home."

With $23,000 credit card debt, this couple can do nothing but start over.  Kelley said "They have got $63 in savings, a negative balance in one checking account, and $59 in the other one."

Kelley is also worried because many former commercial locations like this are being sold in business foreclosures. Small businesses, needed to create new jobs, are being squeezed as lenders won't extend lines of credit. A cycle of economic trouble that experts say will continue.

Kelley said "I wish I could see a real end to it, but I really don't in 2010."

So Kelley prepares to hear more bankruptcy cases in the coming year.

Kelley says he is seeing bankruptcy filings for many different types of South Georgians, from Doctors and high earners who made bad investments in real estate, to more out of work families who can't pay the bills.

Federal bankruptcy courts in Georgia handled 22 percent more filings in 2009 than in 2008. Nevada and Tennessee are the only states that showed higher rates of bankruptcy than Georgia.

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