The Orlando Sentinel reported that a founding partner of one of Orlando’s most prolific bankruptcy law firms himself filed personal Chapter 7 bankruptcy on September 7, 2012. The bankruptcy debtor, Carig R. Lynd, was a found of Kaufman, Englett & Lynd (KEL).
KEL advertised aggressively in the Orlando legal market for clients seeking personal bankruptcy and mortgage foreclosure defense. The paper stated that KEL has 2,500 active bankruptcy cases. KEL built a large law firm with many attorney associates. The Sentinel reported that Lynd’s 2011 income was approximately $ 1 million. His bankruptcy petition listed assets of about $1 million against debt of between $10 million and $50 million.
Mr. Lynd’s bankruptcy reflects, in part, a shrinking market for personal bankruptcy legal services. Bankruptcy filings in 2012 are down significantly across the county. As is legal work in KEL’s other specialty, mortgage foreclosure defense.
From 2007 through 2012 the legal market went through a “bubble” of bankruptcy and foreclosure defense. Many lawyers entered this market. Many law firms expanded aggressively anticipating many more years of a sub-par economy. This year, the bankruptcy and foreclosure booms peaked and began declining in most geographical areas. The unexpected change probably has put a financial strain on many law firms. I don’t know if this turnaround helped lead to Mr. Lynd’s personal financial problems. But, I have heard other bankruptcy attorneys complain about financial strains this year on their own bankruptcy practice.
So, what has lead to the reversal of trend in personal bankruptcy? There are many opinions. Here’s one fact to consider. On September 17, 2012 USA Today published an article entitled “households shrink debt load. ” The article has a chart that tracks from 2002 through 2012 household debt as a percentage of the U.S. economy. Household debt jumped higher in 2007 through 2010, but it has now receded to 2002 levels. The household debt trend correlates to the pattern of personal bankruptcy over the past decade..