BY JIM WYSS

jwyss@miamiherald.com

While Wall Street has been obsessing over the market's return to 10,000, Main Street has been focused on a darker threshold: 1 million.

U.S. bankruptcy filings this year passed that mark in September, putting the nation on track to see the highest failure rates since laws for bankruptcy were made more strict in 2005 and filings plummeted.

From January through September, Florida saw 70,799 bankruptcies, making it second only to California in terms of volume, and 16th nationwide on a per-capita basis, according to AACER, a bankruptcy-data and management firm. That's a 48 percent increase from the same time frame in 2008.

Fueling the filings are sinking home prices and lost jobs that have left millions deeply in debt and turning to bankruptcy as a way to shake off lenders.

Those on the financial edge were the first to tumble, but now the troubles are creeping up the socio-economic ladder, local lawyers said.

Miami consumer attorney Samira Ghazal said she is seeing more middle and upper-class clients in financial straights. Recently she counseled a doctor who lost his job and then ``lost his shirt'' in the real estate market.

``Before, this was a blue collar issue,'' she said. ``Now it's a white collar issue too.''

Marisela Gonzalez, 49, resorted to bankruptcy in June of last year in hopes of holding on to her house, which had gone into foreclosure. The gambit failed: Gonzalez lost her home and is now adjusting to a world where credit -- even for the little things -- is denied.

Recently she had to cancel dance lessons for her daughter because she couldn't pay for them in cash.

``I don't even think about things like buying a new car,'' said Gonzalez, who has been a teacher for special-needs children for almost 10 years. ``I would just like my kids to be involved in extracurricular activities.''

The vast majority of bankruptcies in the state are personal, not commercial. According to AACER, there were 68,186 non-commercial bankruptcies during the first nine months of the year versus 2,613 commercial.

Most of those are Chapter 7 bankruptcies, meaning outright liquidation to pay off creditors, rather than Chapter 11, which involves restructuring debt payments.

While those figures are dramatic, they are only a rough sketch of the true problem.

Many people simply throw up their hands or shut shop without ever formally declaring bankruptcy, lawyers said.

``People come in and and say, `I would love to spend $1,400 on a bankruptcy but I don't have any groceries in my house,'' said Miami attorney Tim Kingcade. ``It takes money to file for bankruptcy and a lot of people don't have money right now.''

Corporate attorneys are also seeing changes.

``The bankruptcy crisis has moved out of real estate and now -- at least among the people I am counseling -- is everywhere,'' said Thomas Messana, a managing partner at Messana, Rosner and Stern in Fort Lauderdale.

Along with developers and builders are clients far removed from the volatile real estate market, including an aviation firm and a large-scale bakery, he said. ``It's in the mainstream economy now.''

While bankruptcy gives some the opportunity to write-off debts and start fresh, it comes at a high price.

Someone with a strong credit rating of 862, for example, could see their score plummet by 365 points under bankruptcy, versus 125 points under foreclosure, according to VantageScore, a predictive model developed by the three major credit-rating agencies.

Even so, many people turn to bankruptcy when they should consider debt reorganization, budgeting or simply finding a new job, said Howard Dvorkin, the founder of Consolidated Credit Counseling Services, a non-profit debt-counseling organization in Fort Lauderdale.

``You need to find a truly independent source to advise you of what your options are,'' he said. ``If you go to a bankruptcy attorney they will jam you into their program whether you need it or not.''

However, bankruptcy is the best solution for some, he said.

If there is a bright side to the crisis, it's that the bankruptcy business has been booming. A few years ago there were only a handful of full-time bankruptcy attorneys working in Miami, Kingcade said. When his firm did a survey over the summer, it found more than 100 working in the field.

Winston Ceunant, a partner at Ceunant and McCarville in Fort Lauderdale, launched his bankruptcy practice six months ago after having spent years at another firm as a litigator.

``The market is so saturated with clients that there aren't enough attorneys to meet the demand,'' he said. ``Bankruptcy has just been hitting everyone from every angle.''

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