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VBAs to Face 1.4 Million Opportunities in 2008?

Rising energy costs, soaring personal debt and weakness in the housing market fueled the growth of bankruptcy filings for February 2008, according to Jenny Anderson in an article appearing on the website for Automated Access To Court Electronic Records. AACER provides U.S. bankruptcy data to attorneys, lenders, employers and individuals.

According to AACER, the average number of bankruptcy petitions filed through out the country rose to an average of 3,960 per day in February. This represents an 18 per cent increase from January and a 28 per cent rise from a year earlier.

The total number of bankruptcy filings for March 2008 grew to 90,288 or 4,299 per day. This was the first instance since the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) went into effect in 2005 that the daily average for a particular month exceeded 4,000.

University of Illinois College of Law Professor Robert M. Lawless cites the overall trend line as an important factor. Lawless, an expert in corporate and bankruptcy law, points out that U.S. bankruptcy filings in January 2006 totaled less than 1,500 per day and that by February 2008 that figure had grown to just under 4,000.

Lawless has predicted that the number of bankruptcy filings in this country will top 1,000,000 by the end of the year. Jack Williams, a Georgia State University professor and scholar in residence at the American Bankruptcy Institute, pegs the 2008 nationwide total to fall between 1.2 and 1.4 million bankruptcies.

Lawless is an author featured on the bankruptcy blog Credit Slips (www.creditslips.org.) Another Credit Slips blogger, Harvard law Professor Elizabeth Warren said in Business Week that more credit card issuers will not cut interest rates to assist consumers who find themselves in financial straits. “If fewer consumers can get any relief, more counseling plans will fail,” said Warren. "That means more bankruptcies"

How are debtor bankruptcy law firms responding to this flood of business?

A March 31, 2008 article on the American Bar Association Journal website analyzes a survey that found that lawyers expect bankruptcy to be the hottest growth area for law firms this year. 25 per cent of the attorneys surveyed said that the fastest area of growth would be bankruptcy work.

Marshall Huebner, co-chair of the bankruptcy group at Davis Pok & Wardwell, said his lawyers are “extremely busy.” In New York City, Skaden, Arps, Slate Meagher & Flom reports that demand for bankruptcy services has “emphatically increased.” In January and February, their bankruptcy department billed 45 percent more hours than the same period last year.

Virtual Bankruptcy Assistants are ideally positioned to benefit from this growing trend. While still in its infancy, this industry is poised to flourish while the demand for bankruptcy services escalates. As more and more consumer bankruptcy attorneys become aware of the benefits of contracting with a VBA, the opportunities for virtual bankruptcy assistants to establish satisfying and profitable careers will thrive.

Alan Higa was born and raised in Honolulu, Hawaii. He has worked for more than 20 years as a legal assistant at law firms that specialize in family law and insurance defense. When not pursuing his career as a VBA, he spends most of his free time enjoying his family and pet squid.

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