Weak Toledo area economy pushes '08 bankruptcies 25% higher
1/3/2009The number of bankruptcy filings in northwest Ohio shot up 25 percent last year as the faltering economy continued to wreak havoc on personal finances.
The court recorded 7,060 bankruptcy filings during 2008, the sixth-highest number on record and the third straight annual increase, according to the U.S. Bankruptcy Court in Toledo. In 2005, before bankruptcy reforms took effect, 16,883 cases were filed.
Nearly all the filings from the 21 counties covered by the court are personal, not business, cases.
Steve Priestap, a Toledo bankruptcy lawyer who's practiced locally for 16 years, said that even though the number of filings has risen sharply, the reasons behind such filings remain largely the same.
"You've got a big segment of people filing because of unpaid medical bills, another segment filing because they're losing jobs, or because they're getting [a] divorce," he said.
The biggest trend he's noticed recently is the number of individuals willing to walk away from their homes without a fight.
"It used to be if people were in danger of losing their homes, they'd do everything they could to save it," Mr. Priestap said. "But now it seems that there are more people saying '[Forget] it,' and walking away."
Local Chapter 7 filings - where the debtor liquidates much of his or her property and pays off bills - rose 32 percent to 6,032 cases from 4,561 in 2007.
Filings under the less common Chapter 13, in which debts are restructured but ultimately are repaid, declined by 4 percent to 1,011 from 1,053 in 2007.
The court received 15 corporate reorganization filings and two filings from farms. Each figure is two more than in 2007.
The total new cases produced the second straight year of double-digit increases since Congress in 2005 increased the difficulty and cost of washing away debts through bankruptcy.
Nationally, nonbusiness bankruptcy filings were up 30 percent through the first three quarters of 2008, according to the American Bankruptcy Institute. If the trend held through the year, the United States would have more than a million nonbusiness bankruptcy filings for the year for the first time since 2005. Annual figures won't be available until next week.
In December, the local court received 518 new cases, up 31 percent from a year earlier.
The highest number of bankruptcy filings in a single month the past three years was 837 in October.
Contact Larry P. Vellequette at:
lvellequette@theblade.com
or 419-724-6091.