National Unemployment, Bankruptcy and Arizona's State of Peril

National Unemployment, Bankruptcy and Arizona's State of Peril

You know things are rough when the government is relieved to hear that businesses only laid off 11,000 employees in November. Still, this is a marked improvement especially when you consider that, between November 2008 and August 2009, layoffs averaged well above 450,000 a month.

With lost jobs came mortgage defaults and declarations of bankruptcy. In August, U.S. homeowners set mortgage delinquency records, with 7.58 percent falling at least 30 days behind in their payment schedule. August was the fourth month in which mortgage delinquencies increased, and at that point the delinquency rate was more than double what it had been two years prior.

Together with the high number of unemployed Americans, this increase in mortgage delinquency has supported the increase in bankruptcy filings. In the first nine months of 2009, 1,046,449individuals filed for bankruptcy. Between January and May, Americans filed an average of 5556 bankruptcies every day.

Unlike the slowing rate of job loss though, bankruptcies have continued to increase. 124,790 individuals filed for bankruptcy in September, which is four percent more than August when job loss began to taper off.

Still, there is no question that bankruptcy and unemployment are related. Decreases in the rate of job loss have done nothing for the more than 10 percent of Americans still unemployed. As such, many expect bankruptcies to continue their rise.

Even as the United States can begin to imagine a recovery, some states, like Arizona, are still very much in the throes of a recession. In a recent report by the Pew Institute, Arizona ranks high on a list of 10 states in economic peril. The state itself is burdened with the third highest budget gap in the country, after California and Illinois.

In the past two years, Arizona has lost 265,000 jobs and, as of October, was reported to have 9.3 percent unemployment across the state. While this is the official number, some Arizona economists believe the amount of unemployed to be much close to 15 percent.

One of the main factors barring Arizona's immediate recovery is the housing market. The state has a very high percentage of underwater mortgages, meaning that homeowners owe more than the value of their homes. Some reports put the percentages of underwater mortgages at nearly double the national average. Arizona also has the third highest foreclosure rate in the country; at 2.42 percent, it sits at more than double the national average.

For those facing foreclosure or other unmanageable financial obligations, bankruptcy may be the best solution. Speak with an experienced Arizona bankruptcy attorney to discuss the options.

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