In 2008, almost 9,000 Orange County residents and businesses filed for bankruptcy, which is more than a 90% increase from the number of bankruptcies filed in 2007. The number has only increased more in recent years. The current bankruptcy crisis originated in the real estate sector and, particularly, in mortgage defaults. With the inflation of houses at an extreme high in Orange County during the mid-2000s, mortgage problems became rampant and drained the credit available for businesses. Whereas businesses had previously renewed their lines of credit annually without issue, these same businesses began to have their credit cut and further financing refused, even for established businesses with good credit. The market, although it may level off, is still not expected to recover from the current crisis for at least another year. More than ever, businesses must keep meticulous tabs on their finances and prepare for the worst. Disaster can be avoided by talking to landlords and lenders early and creating a contingency plan in the case of any terrible misfortune. If at any time a business seems unsalvageable, the owner should let it go rather than resuscitate it with personal finances. In the latter case, the owner will be left with nothing to rebuild his or her personal life in the event that the resuscitation does not sustain the business throughout the recession. If you have any questions or are considering bankruptcy, it is paramount to talk with seasoned professionals who can give you expert advice, such as those at Rus, Miliband & Smith. With over a century of collective experience in bankruptcy law, the attorneys at Rus, Miliband & Smith can guide you through the process quickly and efficiently. Past Rus, Miliband & Smith clients include Fortune 500 companies, municipalities, institutional lenders, notable entrepreneurs, large and small businesses, and prominent Southern California residents.
Orange County Current Bankruptcy Crisis
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