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1 Comment [ View ]Bankruptcies up -- Economist not surprised by numbers
By JEFF DEMOSSOGDEN -- Bankruptcy filings in Utah spiked 47 percent in 2008 as the economy gradually worsened throughout the year, forcing more consumers and businesses in the state to seek protection from creditors.
Statewide, bankruptcy filings totaled 9,256 last year, up from 6,284 in 2007, according to the U.S. Bankruptcy Court for the District of Utah.
"It clearly shows we're in a much more difficult economy," said Kelly Matthews, executive vice president and Utah economist for Wells Fargo.
Monthly filings peaked at 1,036 in October before tapering off to 805 in November and 818 in December, court records show.
"As far as the trend goes, I find November and December to be modestly encouraging," Matthews said. "Based on that, it doesn't appear that things are continuing to get worse."
Nationwide, consumer filings rose 33 percent to 1,064,927 last year, according to data collected by the National Bankruptcy Research Center and published by the American Bankruptcy Institute, an Alexandria, Va.-based research group.
Samuel Gerdano, the institute's executive director, said filings nationwide are likely to keep rising this year.
"Consumers are under great financial stress, with no immediate end in sight," Gerdano said in a news release. "We expect the upward spike in personal bankruptcies to continue in 2009."
Last year's filings were still well below levels seen in 2005 and earlier, before a new law in October 2005 made it more difficult to write off bad debt.
The new law mandated an income test to measure a debtor's ability to repay obligations. Consumers deemed to have insufficient assets or income can still eliminate debts through a Chapter 7 bankruptcy, but those with income above their state's median income who can pay at least $6,000 over five years are forced into Chapter 13, where they must come up with a debt repayment plan.
Utah bankruptcies regularly topped 20,000 a year before the new law took effect.
"We're not even at half of where we were before that point," Matthews said. "The change in law has been a huge factor" in reducing filings.
The change also has had the intended effect of pushing more debtors away from Chapter 7 and toward Chapter 13.
Chapter 13 filings accounted for 41 percent of all filings in 2008, up from 24 percent in 2005.
Business bankruptcy filings under Chapter 11 more than tripled, from 24 in 2007 to 77 last year. It was the largest number of Chapter 11 filings since 2003.
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I'M TIRED OF PAYING TAXES FOR STUPID CRAP LIKE MORALITY BASED ALCOHOL LAWS, A MANDATE TO SAY "MERRY CHRISTMAS" RATHER THAN "HAPPY HOLIDAYS," AND SETTING ASIDE MILLIONS OF CURRENT BUDGET MONEY FOR ABORTION LAWS TO SAVE FUTURE BABIES WHEN THE ONES WE HAVE NOW DON'T HAVE HOMES OR PARENTS WITH JOBS!!!!
STUPID!!!!!
IF YOU LOST YOUR JOB GO UP TO THE CAPITAL AND LET THEM KNOW HOW STUPID THEY ARE!
WHEN THE NEXT LEGISLATIVE SESSION, SOME ONE IS GETTING HIT WITH A SNOWBALL!
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