Tough economic times keep grip on area
4/2/2004Bankruptcies locally jumped to a record of nearly 1,200 cases last month, a reflection of the poor economy and advice by some attorneys that people should wait to file until they receive and cash their income-tax refund checks.
For the 21 northwest Ohio counties covered by the U.S. Bankruptcy Court in Toledo, there were 1,179 cases filed in March, the highest month ever and a whopping 56 percent higher than the February number.
Toledo bankruptcy attorney Gordon Barry said his office has been busy, so he knew the March numbers would be high.
"The economy is still not good," he said.
"We get union people in here a lot saying they're expecting work soon, but it isn't happening," he added.
The surge in filings last month, up 420 cases from the month before and more than double the January figure, is likely due to debtors getting income tax returns, spending them, and then filing bankruptcy, Mr. Barry said.
If the filers have not spent the checks and file for bankruptcy, state law allows them to keep just $800 of it if it is a single filer or $1,600 if they are married filers.
"I've been sending people away for months and months telling them to wait to file," he said.
"It's a legal strategy. If an individual can only protect $800, I tell them to get your refund check, restock the refrigerator, get the car fixed, and spend the rest on themselves, then go and file bankruptcy," he said.
Previously, the highest month for local filings was October, when there were 1,017 local cases.
The 1,000-case barrier was exceeded twice last year, just two years after the first time the court had more than 800 cases filed in a month.
There have been 2,460 cases filed locally through the first quarter of the year. That is 122 cases or a pace of filings that is 5 percent higher than last year, which ended with 10,381 cases, a record.
Most of the local filings are Chapter 7 liquidation cases filed by individuals, and they are up 3 percent for the first three months this year over last year at 2,176.
Chapter 13 repayment filings by individuals are up 30 percent at 276 cases.
There are also eight Chapter 11 business reorganization cases, double the amount of last year, and no Chapter 12 farm filings.
Contact Jon Chavez at:
jchavez@theblade.com
or 419-724-6128