Arizona Bankruptcy Attorney Blog

One thing about people in the United States: even though we're knee-deep in a depression, with bankruptcy cases to the right of us and the left of us, we're looking hard for the next business niche that promises brisk business.

On the one hand, it's made me a little nervous that Costco has been selling lots of survival food (did everyone get the memo but me?) to people who are concerned that our just-in-time inventory system is especially bad at handling disruptions.

But a recent news article told me that we would, as a country, go down swinging, and maybe even survive.

This story takes a moment for the set-up, but it's worth the wait.

See, the vast majority of folks in the United States are Christians of some flavor or another, according to the CIA Factbook. And Christians are either fairly much like each other in their beliefs (Catholics tend to believe in, well, Doctrine, right?) or very different from one another in their beliefs.

Remember, when people came to the United States, there were some places established to permit freedom to worship Jehovah in a particular way, and those places tended to have folks who all believed in similar ways.

Other places in the United States were settled by folks who had very little in the way of possessions, except their family Bible, and who didn't have a lot of ministers or priests with 'em, and religion in those areas developed in ways that were sometimes different (Snake Handlers are a relatively small percentage of Christians in the United States today, for instance) from mainstream Churches.

Putting it another way, there is a wide divergence of belief among Christians in the United States today.

Some believe, for instance, that folks will be lifted bodily into heaven, and that it will happen very soon.

That is a belief that has been a part of Christian belief for as long as Christians have existed; lately it's been called "The Rapture".

Many Christians work on the principle that it'll sneak up on us like a thief in the night, and we'll be called to Judgment at a point that we never expected. Because a lot of generations expected the Second Coming any day now, and some of those were disappointed.

But now a new industry has been established to serve the needs of a sub-population of Christians who believe that The Rapture is coming, and you ought not buy any long-playing albums, because you might be wasting your money!

That industry? Pet care by atheists, for Christians who expect to be bodily lifted up in the near future. After all, if Christians are going to be lifted up and away, their pets might stick around. And atheists, obviously, aren't going to be going home, because it's not their home! So they'll be around to take care of Fido, or Fluffy!

You gotta love the United States; this could not happen in China.

This article suggests that a stay-at-home mom can simply whip up an idea and become a millionaire.

Sadly, the smart money bets otherwise.

But I look forward to a better economic climate, when starting a business requires less of a leap of faith.

Because small businesses in the United States hire locally, and that's a good thing. Big businesses continue their programs of outsourcing, and while that may be good for some folks somewhere, it's downright awful for all the people who went to college, got student loans, and then had their jobs shipped offshore to India and China.

And those folks have the privilege of filing a bankruptcy, but it seems unfair to me, and that bankruptcy will probably not scrape off the student loans that got them the education that got them the job that was outsourced to someplace-or-another. 

And remember this about small businesses: they tend to have a short life span, because running a small business is very hard work, and small business owners tend to burn out.

On the other hand, if you own a small business, you are highly unlikely to fire yourself!

 

It's pretty surprising, but automobile expenses, including gasoline, were 14.5% of an average household's daily expenses (higher than groceries or utilities).

In 2010.

And Arizona residents are hardest-hit by increases in gasoline, except for folks who live in Connecticut. That's because we have a lotta trucks (we're a state of construction workers and cowboys, and we like pickups. That's just how it is.). And we own a lotta desert, which means a lot of driving to work; no way to get around it.

That's right; we're only number two. But with just a little more work, I know we can be number one!

And does anybody think that the percentage has gone up in 2011, with gas price increases?

Yeah, I see heads nodding in the audience.

I always get a kick out of non-prediction predictions.

Here's a nice article that sort of predicts gas prices dropping in summer. Or maybe not.

I say maybe not because of the bet-hedging language in the article.

But be your own judge!

And note from the article the comment that some hotels are offering discounts to offset high gas prices.

Keep your eyes on the hotels: those, along with restaurants, are some of the canaries in the mine.

And why am I talking a lot about gas prices and bankruptcy in the same article? Well, Arizona residents (hereinafter "debtors in bankruptcy cases") may be spending 20% of their net incomes on gasoline. We actually have wide open spaces here in Arizona. No kidding.

Of course, with gasoline prices so high, it may be easier for a close case to pass the means test!

Are there good reasons to file Chapter 11 Bankruptcy Cases?

Sometimes.

They tend to be quite expensive, and they are fairly time-consuming, and nationally, the statistics for successful Chapter 11 Bankruptcy Cases are disheartening.

But they are strong medicine, and if you need to file a Chapter 11, you need to file one.

And like penicillin, it'll either kill you or cure you.

Realty Executives, Inc., according to the news story in The Arizona Republic, had lease issues.

And Jan Buchholz, in the Phoenix Business Blog, noted that a lot of money was owed to creditors in addition to landlords.

Including at least one very, very loving and supportive law firm.

You a programmer?

Used to program mainframes, or design programs for satellites, or for Apache Helicopter Attack Systems?

Well, there's a bundle of jobs for you again. More than 3,800 of 'em.

Programming iPhones. And Androids. And similar smartphones of various descriptions.

Go get 'em, and good luck!

 

One of the best scary movies ever made is a goofy little gem called "An American Werewolf in London", which starred the incomparable Jenny Agutter and some guy.

Oddly, it was really a romance, rather than a scary movie, mostly. Girl meets guy, guy becomes werewolf, girl loses very hairy guy. Great flic!

But some things are scary in the real world.

Like food prices getting much higher, and staying much higher.

And every incremental increase in the cost of living drives families to do what they would far rather avoid: file a bankruptcy so they can afford to provide a decent living for their children. 

And me? Well, I'm a bankruptcy lawyer, not a werewolf.

Although banks can't tell the difference.

So there you are, among the twenty per cent of unemployed in the United States, watching 10% inflation reduce your food choices to cat food casserole and pasta with pasta sauce (less protein, but more diabetic coma).

But it's okay; you're a gamer and a television and movie addict, and you work enough occasional gigs, or dig far enough into your tiny 401(k), to buy your precious internet access. So you can play, and goof around on Facebook, and watch television and movies on Hulu.

You're poor, but you're addicted to the narcotics of the Internet, so life is good, because your supply is freeeeeeeeee!

Well, you just got a choke-chain placed on your Nirvana-time, buddy.

Ryan Singel talks about caps now being placed on Internet usage by major players, to make those players look better on Wall Street.

Now, what could be good about this?

Uh. Nothing.

Really nothing. 

Note: if you're unemployed, prior to or immediately after filing a bankruptcy, the Internet is now the best bet you have for finding work. So I really, really don't like caps on Internet usage! Because I'm a bankruptcy lawyer!

I've been blogging about bankruptcy for a couple of years now, and it surprises me that there's always more to talk about. I expect I'll be explaining bankruptcy topics for at least another three or four years until I've discussed all the topics about bankruptcy that I want to explain.

And more and more folks (including a number of bankruptcy lawyers, who are more than welcome!) have started reading my little bankruptcy blog.

And I love the little "statistics" feature in Blogger, because I can look at it and easily tell how many people are reading my posts on any given day.

This has been my busiest month ever, and I thank you for making it that; we've had 10,000 pageviews this month for this bankruptcy blog, and that doesn't count the syndication viewers, which may be another couple of million.

So thanks for your attention; I'll keep giving you answers to the questions my clients ask me, and I'll throw in all the bankruptcy news that's fit to print!

The idea of avoiding a bankruptcy and doing some sort of warm, fuzzy, cooperative debt-modification thing with creditors makes many people glow!

After all, that's kinda like a work-out, right? With none of the downside associated with a bankruptcy filing in Arizona, or elsewhere.

Wrong, Insolvency Breath!

The reason that debt settlement firms work so poorly is...well, I've never seen one that worked well, that's all.

I get to see people who hired them, got a lot of debt forgiveness, and then owed non-dischargeable tax debt to Uncle Sam, and didn't understand that was a virtually guaranteed side-effect of negotiating debt toward the South.

Or people who have a lot of debt, who hired a debt negotiation outfit, and then thought they could relax. And then got sued by an unpaid, cranky creditor.

I get a lot of refugees from debt settlement firms.

And I notice that the issue isn't local to Arizona; Kavita Kumar tells us that a debt-settlement firm named "Vortex Debt Group" is barred from doing business in Missouri.

The real rate of inflation scares me; I know that the official inflation rate is a silly fiction. And so does every houswife or husband who goes shopping, because some items in the grocery store have jumped 27% over the past six months.

But I've also pointed out that the price of gold and the value of the dollar are sort of teeter-totter twins. One goes up, and the other goes down, and vice-versa.

That's why it scares me silly when MSN Money discusses predictions that gold is going to go from $1,500 an ounce to $5,000 an ounce.

And maybe Anthony Mirhaydari at MSN Money is right, and maybe he's wrong.

But I'm scared nonetheless; because inflation so high that it makes gold soar to $5,000 an ounce tells me that we can use hundred dollar bills to buy a cup of coffee at Starbucks. As long as it's ordinary java, with nothing fancy.

And bankruptcy cases? Yeah, there would be more bankruptcy cases, all right.

Well, probably not.

Here's one of the contenders for a car that would radically cut the use of oil from countries that hate us and want us dead.

It looks funny, because it's designed to eliminate drag.

Now, you'd think that a government that wanted to cut the use of foreign oil and encourage recycling of materials would embrace this car and make its way smooth.

And I'd love to see the United States become the leader in fuel efficient cars (gas or electric) that are fun and safe to drive; and there's no rational reason we couldn't produce these simple vehicles right here in the USA, creating value, and jobs for U.S. Citizens.

And will I hold my breath?

Uh, no.

And why would I want to see jobs created in the United States? Well, I'm a bankruptcy lawyer; and I'd like to see fewer folks forced to file bankruptcy because of unemployment!

p.s. innovation and production capacity made our County great; if we can reduce the barriers that permit small companies to innovate, we can generate jobs, and that will be a good thing!

I had to talk about this article about inflation nearing 10% again.

The irony that a site at CNBC called "Fast Money" had the brains and other organs to talk about real levels of inflation (which is apparently a big secret, except to those who buy things with devalued money at the grocery store), made me laugh myself silly. Which is probably a symptom of clinical depression, in the context of 10% inflation.

Why is it ironic? Okay, it's not as funny when I explain it, but it's ironic that a site called Fast Money explains how your money gets spent faster because it's worth less. 

And to do the site and the executive producer justice, this isn't the first time that site has had straight information.

And the quality of analysis on Fast Money is excellent; for instance, the article which discussed the pay cut that Americans have experienced is useful.

And if you put the 10% inflation article together with the pay cut article, you will understand that this is a depression, and that you are not imagining that things are getting far, far worse for the middle class. Because a 10% pay cut in the one remaining breadwinner in the household makes things a little bit difficult.

And, of course, those on a fixed income got a 10% pay cut, too.

Inflation is fair. It breaks everybody's heart. Which is not exactly the lyric to the song, but you get the idea.

I know that 1.4 trillion dollars doesn't sound like a lot anymore (heck, pretty soon we'll have 100 trillion dollar bills like those in Zimbabwe!), but 1.4 trillion dollars worth of commercial real estate debts are coming due in the immediate future right here in the USA. 

And half of that secured debt is underwater. That is, the dirt is worth less than the loan.

And lending regulations are much, much tighter than when the loans were made, making it harder for the bank make the same loan again.

And the borrowers are now less creditworthy, because everybody is these days! 

And the banks themselves have less dough to put on the street, because they've already "charged off" a ton of loans, and leverage works both ways with our banking system; the more deposits, the more the bank can lend by a factor of about 14. The more charge offs, the less the bank can lend, by a factor of about 14.

Now, I don't want to be Mr. Doom-and-Gloom-Guy, but don't you think somebody should be working on a solution for that particular Niagara before we go over without a barrel?

Just a thought.

On the other hand, I guess it doesn't really matter. Just a lot of Single-Asset Real Estate Chapter 11 Cases dopplering on in!