For the first time in nearly three years, filings in U.S. Bankruptcy Court in Toledo increased in March, rising 13 percent from the same month a year earlier.
The 519 cases filed last month compared with 454 a year ago. The court, which covers 21 northwest Ohio counties, had gone 33 months without an increase in filings.
The last time bankruptcy cases increased over the previous period a year earlier was in May, 2013, when cases rose by 8 percent. The March filings marked only the fourth time in five years that an increase occurred.
Toledo bankruptcy attorney Elliot Feit said the March increase in filings has a simple explanation. “It’s basically the tax refund,” Mr. Feit said.
“People have been waiting for the money from the Earned Income [Tax] Credit, which is untouchable. They’ve been waiting for that refund to catch up on their utilities, other expenses, and in some cases, to pay attorney’s fees so they can file bankruptcy,” he said.
By law, money from the federal Earned Income Tax Credit, which is for people who work and have earned income under $53,267, and also money from a Child Tax Credit, can’t be garnished by a bankruptcy trustee, Mr. Feit said. “That’s what has incentivized people to wait to file this month. Trustees can’t touch that money and they know it,” he said.
Mr. Feit said his law office, Barry & Feit, had its caseload rise 37 percent in March.
Last month there were 487 Chapter 7 liquidation cases, an increase of 16 percent over a year ago. Chapter 13 repayment plan cases totaled 32, a decrease of 18 percent. There were no Chapters 11, 12, or 15 cases filed.
With the rise in March, the overall caseload through the first quarter totaled 1,040 filings, an increase of 3 percent over the first quarter of 2015.
Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.
First Published April 2, 2016, 4:00 a.m.