The coming bankruptcy waves

By Jena Johnson - bio | email

LUFKIN, TX (KTRE) - Bankruptcy lawyers are predicting more filings..and they say no sector of the economy is immune.  "You throw a rock in the pond, it's going to ripple all the way to the end, you may not see it very big, but it's going to be there," said Stephen Zayler, bankruptcy lawyer.

The wave of bankruptcies hit more than one million Americans last year. Stephen Zayler has been handling bankruptcy cases for 25 years. He said he expects to see a lot more. "If it can happen to Chrysler, if it can happen to General Motors if it can happen to Pilgrim's Pride, then it can happen to you," said Zayler.

Bankruptcy lawyers said more people are filing for bankruptcy so they can hold on to their possessions. "The problem is you can lose these things if you don't know what you're doing, if you can't use the protections, the bankruptcy law is the process to allow people to a keep a certain amount of stuff," said Zayler.

Zayler said the stigma of people being ashamed of filing for bankruptcy will decrease. "People are seeing if it can happen to GM then it can happen to me," said Zayler.

He said the aftermath of the dwindling economy is only in its beginnings. "It tends to lag behind the economy and so someone who loses their job now, might not be filing bankruptcy for a year, year-and-a-half or even two years," said Zayler.

What may be surprising to some is that it can actually be a relief. "After they've gotten their petition filed and met with a trustee, it's like the weight of the world has been lifted off their shoulders, they have a new lease on life," said Don Richardson, associate at Williams and Byrd Law Firm.