Sunday, September 11, 2011

Bankruptcy filings in Valley rose 13% in August

Phoenix-area bankruptcies jumped 13 percent in August over July, snapping a four-month improving trend. Yet filings still remained below their level from a year earlier.

The mixed picture reflects a sluggish economic backdrop marked by weak employment growth and poor consumer confidence but with no major new developments that would push people into bankruptcy.

"There's some support for the notion that the worst is behind us in terms of filings," said Scott B. Cohen, an attorney at law firm Engelman Berger PC in Phoenix and chair of the state Bar's bankruptcy section. "But it hasn't been synonymous with positive economic news."

There were 2,431 filings recorded in August throughout metro Phoenix, the U.S. Bankruptcy Court in Phoenix reported. That's up from 2,153 in July but down from 2,865 in August 2010.

Arizona overall also had a mixed showing, with statewide filings rising almost 12 percent from July but dropping 14 percent from August 2010.

Cohen said the general decline in bankruptcies this year probably reflects the fact that many of the most debt-strapped individuals already filed in prior years. The declining trend also might reflect fewer newcomers of moderate means moving to Arizona as well as tighter consumer credit, he said.

So far this year, metro Phoenix has logged 2,000 fewer bankruptcies compared with the first eight months of 2010.

Chapter 7 filings, which provide a fresh financial start, accounted for 86 percent of bankruptcies, both in metro Phoenix and across the state.

A general improving trend also is apparent nationally, with August consumer filings down 11 percent from August 2010 but unchanged from July 2011,the American Bankruptcy Institute reported, relying on data from the National Bankruptcy Research Center.

"Consumer bankruptcies continue to decline over the past year as households deleverage and consumer credit remains tight," Samuel Gerdano, the ABI's executive director, said in a statement.

by Russ Wiles The Arizona Republic Sept. 8, 2011 05:21 PM

Bankruptcy filings in Valley rose 13% in August

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