Northwest Ohio bankruptcies up 54% through May
6/5/2001Financially-strapped residents of northwest Ohio continued a rush on U.S. Bankruptcy Court last month, with 62 percent more filings at the Toledo office than a year earlier.
“The surge in filings continues unabated,” Clerk David Fickel said yesterday.
Filings for the first five months of the year are 54 percent ahead of last year in a trend that experts have attributed to a slowing economy, high credit card debt, and concerns about expected bankruptcy reform.
The Toledo court, which encompasses 21 northwest Ohio counties, received 793 bankruptcy petitions last month, most of which were filed by individuals seeking discharge of bills owed to credit card firms, hospitals, and other creditors. It was slightly below the 800-plus level of March and April but well above recent trends of 400 to 600 a month. In May, 2000 there were 490 filings.
The Toledo office received 3,493 petitions through May 31. That is 1,213 more than during the same period in 2000.
“The statistical trend suggests filings for calendar year 2001 exceeding 8,000 total cases,” Mr. Fickel said. That would surpass 1998 when a record 5,713 new petitions were filed.
Businesses accounted for only a small percentage of the filings, although data was unavailable on the exact number.
Attorneys say the increase is being fueled in part by the expected adoption of bankruptcy reform legislation, which will force some debtors to re-pay a portion of the bills they now are able to discharge. President Bush is expected to sign the measure into law after minor differences are ironed out between House and Senate versions.
The economy is another factor in the increase, which is being experienced nationwide but at a slower pace.
“The economy has slowed and people are carrying high levels of consumer debt,” said Samuel Gerdano, executive director of the American Bankruptcy Institute. As a result, people are being forced to consider bankruptcy when confronted with even slight drops in income, he added.
Bankruptcy filings nationally rose 17.5 percent to 366,841 through March 31, according to the institute. National data isn't yet available for April and May. The biggest increases were in eastern North Carolina (50 percent), northern Mississippi (40 percent)and western Arkansas (38 percent)
Eileen Granata, an economist with Toledo's Regional Growth Partnership, said economic conditions don't seem to explain why filing increases are so much higher in Toledo than nationally.
“Our economy isn't behaving that differently from the national economy,” said Ms. Granata, the partnership's vice president for research.
Job cuts and reduced overtime at area manufacturing plants might offer some insight into the situation, she conceded. Indeed, statistics compiled by the state of Ohio show that factory employees put in an average of 41.2 hours in March, down from 45.6 at the same time last year. More recent data was unavailable.