Bankruptcy

Job Creation Cause for Celebration? I Don't Think So. More Bankruptcy Filings in Arizona, I Expect.

By Joseph McDaniel, Esq.

So most opinions don't matter a lot.

But when people are of the opinion that the economy is getting worse, that suggests several things to this bankruptcy blogger.

For one, that means that people will behave as though the economy is getting worse, and will therefore not spend, or spend as little as possible to survive.

Not spending, in turn, spells doom for small businesses, which will continue to file bankruptcy with frequency in Arizona, or in the alternative just close the doors, give back the keys, and file personal bankruptcy (and that will usually be a Chapter 7, because with the small business dying like a horse ridden too far, there's no income. And with no income, there's typically no issue with the dreaded means test).

When small businesses, which are the driving force in the United States for job creation, do poorly...well, it's bad for everybody, without exception. Because when a hair salon closes, the receptionist there is out of a job. When the restaurant closes, the waiters and waitresses are out of a job. When a chiropractor's office closes, things get worse for her accountant, and then when the accountant's doors close, it gets bad for her receptionist, the company that cleans their office, and the companies that the accountant buys from.

It's sort of a trickle-down poverty-creation system.

Now, I don't get out much. I talk to clients, I talk to lawyers, and I talk to people who need to file bankruptcy. My life is pretty limited in terms of asking people about their opinions.

On the other hand, a company called Rasmussen Reports does ask people about their opinions, and Rasmussen has done a fairly good job of calling things like elections in the past (for instance, it predicted that President Obama would be elected, and did so within a small margin of error).

So when Rasmussen tells me that most folks see the economy getting worse after the release of information about job creation, that tells me that other people besides Arizona bankruptcy attorneys believe that the economy is on greased skids towards oblivion.

Here are some recent opinions collected by Rasmussen:

"Consumer and investor confidence has fallen significantly following the release of Friday?s disappointing report on job creation. Just 27% now believe the economy is getting better, down from 34% before the report. Republicans overwhelmingly believe the economy is getting worse. Unaffiliated voters, by a 49% to 21% margin, agree. Democrats are more optimistic. Forty-one percent (41%) of those in the president?s party believe the economy is getting better while 33% say it?s getting worse."

Now, that makes me sad, because it suggests that I could be correct about the direction that the economy is going, and I'd rather be really, really wrong.

And that also suggests that there will be many more bankruptcy filings in Arizona before we can start over and rebuild the economy here.

Which also makes me sad.

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on June 07, 2010 (boomark / email).