Bankruptcies up in Toledo

United States Bankruptcy Office at the Federal Courthouse in Toledo, Ohio.

Case filings in U.S. Bankruptcy Court in Toledo rose 6 percent in March, raising another red flag that bankruptcy is on the rise in northwest Ohio.

There were 467 cases last month compared to 442 cases in March a year ago, according to the U.S. Clerk of Courts office.

Since January, 985 bankruptcies have been filed, a 5 percent increase for the year so far.

Last year bankruptcy filings finished up 1 percent. And while that amounted to just an added 59 cases over the year before, it marked the first time the annual total had increased since 2009.

More concerning for some is that since January, 2017, case filings in the Toledo court increased in 10 of the last 15 months.

By contrast, in 2016 filings were down in eight of the year’s 12 months, and in 2015 filings never increased in any month.

“We’re seeing increased numbers, increased phone calls, increased contacts,” said Toledo bankruptcy attorney Thom Cafferty.

“Some of that could be attributable to tax season, but we’ve pretty much taken that into account already,” he said. “Many of those we are seeing are just repeat filers, people waiting for the time limit to expire so they can file again.”

There were 416 Chapter 7 liquidation cases in March, an increase of 3 percent. However, there were 51 Chapter 13 repayment cases, an increase of 31 percent.

Mr. Cafferty said at his practice he is seeing a lot of bankruptcies spurred by medical debts.

“People not qualified for Medicaid and with high copays or deductibles are running up huge bills,” he said.

Mr. Cafferty said the bankruptcies might be attributable to a quirk in the Affordable Care Act.

Adults are required to have medical coverage and many signed up for plans that they could afford. However, many of those plans had high deductibles, which are throwing those covered by the plan into debt.

“When you’re only making $20,000 a year and you’ve got a $4,000 medical bill, where is that going to come from?” the attorney said.

Bankruptcy attorney Scott Ciolek said he isn’t seeing many cases involving medical debt, but he is seeing clients struggling with student loan debt, which is not dischargeable under bankruptcy law.

There was an attempt last year to pass a bipartisan law that would have helped allow some student loan debt to be discharged in bankruptcy, but the law didn’t pass, he said.

“That might have had some people hold off on filing,” Mr. Ciolek said. “[The bill] seems to have lost some steam in Congress recently and I think now people who have waited all they can for it can no longer afford to wait and are filing bankruptcy.”

Mr. Ciolek said he also is receiving calls from people struggling with home foreclosure, an issue that appeared to have gone away a couple of years ago.

Contact Jon Chavez at jchavez@theblade.com or 419-724-6128.