Friday, April 6, 2012

Phoenix bankruptcy filings still declining

Metro Phoenix bankruptcies continued their downward trend in March, with the number of filings dropping 26 percent from the same month in 2011. The decline corresponds with an easing of consumer debt pressures nationally, according to a new report.

The 2,074 filings were the highest total so far this year, but March tends to be a busy month, as people use their income-tax refunds to pay attorney fees. The latest tally was well below the 2,813 filings in March 2011 and the 3,063 in March 2010.

Valley bankruptcies have declined, on a year-over-year basis, for 14 consecutive months.

For all of Arizona, filings were down 28 percent from a year earlier and also have decreased for 14 straight months on a year-over-year basis.

Nationally, the 122,118 filings in March were down 17 percent from a year earlier, reported the American Bankruptcy Institute and Eqip Systems.

"With the economic recovery weighed down by the distressed housing market and high unemployment, consumers and business are continuing to cut their debt burdens," ABI executive director Samuel Gerdano said in a statement.

Consumer-debt problems eased across the board in last year's fourth quarter, according to a report released Thursday by the American Bankers Association. Past-due loans fell in all 11 categories tracked by the association, highlighted by a decrease in credit-card delinquencies. Some 3.17 percent of card accounts were 30 days or more overdue, down from 3.25 percent in the third quarter of 2011.

The overall delinquency total for the 11 categories dropped to its lowest level since 2008.

"You can't get a better consumer-credit report card than this," said James Chessen, the ABA's chief economist, in a statement. The last time delinquencies dropped in all 11 categories was the fourth quarter of 2004, Chessen said, though he cautioned that housing-related problems are keeping overall past-due rates elevated. For example, home-equity-loan delinquencies eased just slightly, to 4.08 percent from 4.12 percent.

Mark Winsor, an attorney at the Winsor Law Group in Mesa, said he thinks local bankruptcy filings will remain elevated due to lingering housing pressures. In particular, a lot of borrowers continue to owe money on second mortgages on homes they short sold, yet lenders still have six years to collect on those deficiencies, from the time a loan first went delinquent, he said.

"Some of those lenders might be waiting on the sideline for borrowers to get back onto their feet" before demanding payments, Winsor said.

Also, he said the decrease in local housing inventory means real-estate agents are having a tougher time generating sales, and for that reason more people in that profession might seek bankruptcy protection.

by Russ Wiles - Apr. 5, 2012 06:24 PM The Republic |

Phoenix bankruptcy filings still declining

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