Ellmann sees Michigan's raw economic wounds in Ann Arbor's federal bankruptcy court. "I'm definitely seeing a lot of low-income people," says Ellmann, who has adjudicated local bankruptcies since 1989. "And since the economy crashed in October, I've seen high-income folks, too, and a fair number of middle-class people."
Bankruptcy filings nosedived for a year after Congress tightened the rules in 2005, but since 2006 they've risen by almost two-thirds. Ellmann and fellow trustee Tim Miller handled 41,247 bankruptcies last year in Washtenaw, Jackson, Lenawee, and Monroe counties, and the numbers continue to climb.
"Some people don't file at all because they have nothing to protect," Ellmann adds. "If you don't own much, or if you don't have money to file, you might just walk away, particularly with house foreclosures." The suffering is worst, he adds, in "communities outside Ann Arbor where there's a steep income falloff. Some of those areas have been absolutely devastated.
"A fair amount of people who used to be in the auto industry and took a buyout [to leave their jobs] now can't find gainful employment," continues Ellmann. "Plus the housing bubble caused a lot of problems. People kept getting multiple mortgages on their homes, using them as a place to catch up on their bills. And with a reduction of hours or a medical problem, it doesn't take much to fall way, way behind very quickly."