San Jose Bankruptcy Attorney comments on the 81% rise in small business bankruptcies in California
San Jose Bankruptcy Attorney comments on the 81% rise in small business bankruptcies in California
Small businesses continue to be hit by tight credit markets and a recession that is deeper and longer than any in recent memory. California has been especially hard hit during the current economic downturn. Small business bankruptcies have risen 81 percent over the previous year in the 12-month period ending September 30. The nationwide rise in bankruptcy filings is up 44 percent, according to Equifax, Inc.
Experts estimate that the actual number is higher since many small business owners file for personal bankruptcy rather than for corporate Chapter 7 or Chapter 11 protection. Many small business owners have self-financed and used personal lines of credit or home equity to finance their businesses, and end up seeking Chapter 7 or Chapter 13 bankruptcy protection for their personal finances.
The Obama Administration is attempting to free up capital for lending by appealing directly to banks, especially those that were given bailout funds as part of the Troubled Asset Recovery Program. President Obama has appealed to the heads of several banks including Wells Fargo, headquartered in California, which has been especially hard hit.
California has nearly doubled the number of small business bankruptcy filings in the period that ended September, 2009. Over the last year, the Los Angeles, Riverside/San Bernardino and Sacramento metropolitan areas have led the nation in small-business bankruptcy filings.
Small-business bankruptcies rise 81% in California, Los Angeles Times, December 22, 2009
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