Each year I gaze once again into my crystal ball of clarity and make my predictions for the economy and declare my bankruptcy trends for 2012.  Here’s last year’s trends, to refresh your memory. I continue to debunk the myth that bankruptcy is the last stop to financial freedom because the American people have been brainwashed into thinking bankruptcy is a dirty word. Bankruptcy filings for 2011 dropped 8% to 1,467,221, for the fiscal year ending September 30th, according to U.S. Courts. Here in the Central District of California, year-to-date through October, 2011 total filings were 115,717, down 3.9% from the same time, 2010. I predict these numbers will remain constant through the middle of next year with a spike toward the end of 2012 if the homeowners seeking short sales no longer get the tax waivers.

This year, Kamala D. Harris, California attorney general, broke from the herd of all 50 states because she was not satisfied with the settlement negotiations with the banksters for their participation in the housing bubble burst, foreclosure crisis and near collapse of our entire economy. I applaud her departure from what I would consider a "sweep the problem under the carpet" quick and dirty settlement. 

 Foreclosures have an impact on every aspect of our recovery. Until we solve the housing crisis our economy will continue to sputter.  In fact, I predict we have yet to see the peak of foreclosure season with the increasing so-called "shadow inventory," and variable loans that have yet to adjust.  Then, there is the amusing and confusing and ever-changing foreclosure process that forces me to continually advise my clients that I cannot tell them how long it will take for them to be removed from their home after foreclosure, let alone when the bank may foreclose.

I agree with this Goldman Sachs economic outlook that we will see higher unemployment. Don’t get excited about the present decline because those that have gone back to work are not getting paid nearly enough.  Unemployment reports fail to include the underemployed part-time workers, those that have taken pay cuts and those that have simply left the job search to go back to school.

Okay, enough doom and gloom.  The bright point is that 2012 is an election year.  What do you mean you’re not excited about an election cycle? Over at the Wall Street Journal, four financial advisers gave their opinions on the Markets for next year. They tell us that we’ve got political propaganda that will give us anxiety and an aging population that is sure to burden our health care system.  All of this means that bankruptcy filings will continue at the million filings annually mark as the middle class continues to be trampled on and forced into the lower class.  As more baby boomers look to retire, they too will be forced into bankruptcy because they haven’t been able to pay off all their debts and probably still have yet to recover their retirement losses from the crash in 2008.