Loading…
Monday, July 28, 2014
Current Weather
Loading Current Weather....
Published: Tuesday, 7/4/2006

Filings drop from 1st half of last year

BY JON CHAVEZ
BLADE BUSINESS WRITER

Through the first half of the year, northwest Ohio bankruptcy filings are down significantly from a year earlier and experts admit they are puzzled as to why.

"It's not as though the people in northwest Ohio have suddenly come into money," said Doug Dymarkowski, a Sylvania bankruptcy attorney and trustee for the U.S. Bankruptcy Court in Toledo.

"I ask attorneys, 'Is your phone ringing more?' and they started saying in the last couple weeks that their phones are ringing more. They are getting inquiries, but they aren't getting the cases yet."

In June, 362 were cases filed in the Toledo court, covering 21 northwest Ohio counties. That number is 69 percent lower than last June's 1,180 cases.

For the first half of the year, 1,632 cases were filed, down 76 percent from a year ago and the fewest in more than 10 years.

Contributing to the record 2005 filings was a federal reform law which made it tougher and more expensive to file for protection from creditors and forgiveness of debts. The law took effect in mid-October, and in the six weeks beforehand, thousands of local cases were filed.

Experts expected a few months' slowdown in filings, but most then figured the caseload would shoot back up to 500 or more a month. This year, June has had the highest total, compared with 5,540 filed in October alone last year.

Dave Fickel, clerk of the Toledo court, said he has no explanation for the continued drop-off in filings.

"It's been 10 months since October and they're still just straggling around," he said. "It's pretty long in the tooth to think this is just hangover from people filing in October.

"If it's really true that there are tons of people who need to file, where are they?"

Foreclosure rates are skyrocketing, so it could be some debtors are just walking away from their debts with no intention of filing bankruptcy anymore, he said.

Mr. Dymarkowski said his chats with attorneys show many are still leery of handling Chapter 7 liquidation -of-debt cases because attorneys are responsible under the reform law for verifying information a debtor supplies.

David Skeel, resident scholar at the American Bankruptcy Institute, said confusion over the reform law is one factor holding down filings.

"One counseling agency told us a lot of clients were thinking the 2005 act abolished bankruptcy altogether," he said.

Another factor is that new credit card rules require higher minimum payments, forcing people to pay back more of their credit card debt.

"People aren't filing for bankruptcy, but they still aren't able to pay," Mr. Skeel said.

Contact Jon Chavez at:

jchavez@theblade.com

or 419-724-6128.



Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.