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Unemployment and Bankruptcy

By Joseph McDaniel, Esq.

Loyal readers will recall that Chief Bankruptcy Judge Caldwell taught me that the mining towns in Arizona don't file bankruptcy en masse when the mines close.

That happens when the mines reopen.

He was a very, very smart man, and a very good Bankruptcy Judge.

Right now we have something close to record levels of unemployment in the United States, but that doesn't communicate the ugly reality as well as a graph.

And I ran into a nifty graph of unemployment with a nifty extra feature; not only does it show a graph of unemployment in the United States over a period of years. It also permits you to superimpose a graph of unemployment by specific state on the master graph of unemployment in the United States.

That way, you can see if unemployment in Arizona has been higher, lower, or the same as unemployment in the United States during the period under review. Or any other state.

I probably should have put this entry in my Arizona Bankruptcy Resources Blog, but it isn't exactly a bankruptcy resource; it's more like a resource to make you feel a little better because you can see that it's not your fault.

All over the United States, people are out of jobs. And when they get another job, it's for half the pay, or less.

So take a look at the nifty chart, and see if you can figure out why unemployment in some states is so much lower or higher than the average. We've already talked about Hawaii, and we know that the unemployment stats there are a little skewed. Since you have to work three jobs to survive in Hawaii, when you lose one, you don't get listed as unemployed, even though you may still need to think about filing bankruptcy!

When I get a Round Tuit, I'm going to track down a graph like this one for bankruptcy filings, by year and state, and see how the comparisons between bankruptcy and unemployment look.

My guess?

We'll discover that Chief U.S. Bankruptcy Judge Hugh Caldwell was right, as usual. And that people won't be filing bankruptcy on the day they get fired.

They file bankruptcy when they get a new job.

p.s. for those of you who don't spend all day every day in the bankruptcy trenches, the reason that people in mining towns file when the mines reopen is simple; they need to scrape off the accumulated debt and judgments left over from the periods when the mines were closed!

 

Full post as published by Arizona Bankruptcy Attorney Blog on January 18, 2011 (boomark / email).