Legal News

Bankruptcy filings in Western states increase dramatically

By Jason Siegel

The Western states, at the epicenter of mortgage foreclosures, now see the fallout in skyrocketing bankruptcy filings, up by nearly 61% in the 12 months ending June 30, over the same 2007 period, court statistics show.

The states of the 9th U.S. Circuit Court of Appeals saw bankruptcies shoot up more than any other circuit in the nation, from 102,000 to 164,000 between 2007 and 2008, for the period ending June 30.

The next closest circuit was the 11th, with a 32% increase year over year, rising from 101,000 to 133,000.

Nationally, bankruptcy filings rose by 29% in the same 12-month period, to nearly 968,000 from the prior year's 751,000, according to numbers released Wednesday by the Administrative Office of the Courts.

The biggest increase came in Chapter 7, liquidation of assets bankruptcies, with 615,748, a jump of 36.7% from the 2007 numbers, according to the court.

Among the hardest hit areas in the West were California's Central Valley and Los Angeles, with filings up by 84% in the Central Valley and by 86% in the Los Angeles region, according to the court.

Nevada and Arizona, which have also been hit hard by the home foreclosure debacle, saw bankruptcy filing rates shooting up as well, with a 77% rise in Nevada and 62% rise in Arizona.

But in ranking the number of filings by population, the picture changes.

Among all bankruptcy filings by state, per 1,000 population, the top five states were Tennessee, Georgia, Alabama, Nevada and Indiana.

When Chapter 7 liquidation filings are separated out and ranked per 1,000 population, the top five states centered more in the nation's rust belt; the top five were Michigan, Indiana, Nevada, Kentucky and Ohio.

Business bankruptcy filings, a much smaller percent of total filings, were also up. Business filings rose by 42%, from 24,000 in June 2007 to 34,000 by June 30, 2008, according to the filing records.

-- Pamela MacLean

Full post as published by Legal Pad | LA on September 02, 2008 (boomark / email).