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Valley-area bankruptcy filings skyrocket
May. 8, 2008 02:26 PM
The Arizona Republic
The number of Valley-area bankruptcy filings more than doubled in April as the soft economy and lingering housing ills came home to roost.
Some 1,104 Phoenix-area consumers and businesses filed for protection from creditors last month, up from 548 in April 2007, reported the U.S. Bankruptcy Court in Phoenix.
That's the largest year-over-year increase since a 345 percent surge in October 2005, shortly before a change in federal law tightened the rules on bankruptcy filings.
"Housing is really the main thing right now," said Ericka Young, a personal-finance coach at Tailor-Made Budgets in Mesa. "Most of my clients having money problems are at least a month or two behind on their ]mortgage payments."
The April increase was sparked by a 111 percent jump in Chapter 7 filings, the main consumer category. Chapter 7 cases are straight liquidations of nonexempt assets.
Chapter 13 filings, the second most common type, rose 71 percent. These are reorganizations in which debtors with regular repayment plans with creditors.
Nationally, consumer bankruptcies vaulted 48 percent in April to 92,291 cases, according to the American Bankruptcy Institute, citing data from the National Bankruptcy Research Center. U.S. filings are on pace to top 1 million this year, said the ABI's executive director, Samuel J. Gerdano.
May. 8, 2008 02:26 PM
The Arizona Republic
The number of Valley-area bankruptcy filings more than doubled in April as the soft economy and lingering housing ills came home to roost.
Some 1,104 Phoenix-area consumers and businesses filed for protection from creditors last month, up from 548 in April 2007, reported the U.S. Bankruptcy Court in Phoenix.
That's the largest year-over-year increase since a 345 percent surge in October 2005, shortly before a change in federal law tightened the rules on bankruptcy filings.
"Housing is really the main thing right now," said Ericka Young, a personal-finance coach at Tailor-Made Budgets in Mesa. "Most of my clients having money problems are at least a month or two behind on their ]mortgage payments."
The April increase was sparked by a 111 percent jump in Chapter 7 filings, the main consumer category. Chapter 7 cases are straight liquidations of nonexempt assets.
Chapter 13 filings, the second most common type, rose 71 percent. These are reorganizations in which debtors with regular repayment plans with creditors.
Nationally, consumer bankruptcies vaulted 48 percent in April to 92,291 cases, according to the American Bankruptcy Institute, citing data from the National Bankruptcy Research Center. U.S. filings are on pace to top 1 million this year, said the ABI's executive director, Samuel J. Gerdano.
