Mortgage And Real Estate News

Tuesday, December 13, 2011

November debt filings in Phoenix area hit 3-year low

Despite a sluggish economy, fewer metro Phoenix residents are seeking bankruptcy protection, with November filings marking the lowest level in 33 months.

The 1,747 filings in November reached the lowest mark since February 2009 and represented a 30 percent drop compared with November 2010, reported the U.S. Bankruptcy Court in Phoenix.

Bankruptcies also have been sliding across the nation, but that doesn't necessarily mean people are feeling more financially secure. It could actually indicate the opposite, lawyers say.

"I have a sense that a lot of people have kind of given up or don't have anything for a creditor to garnish," said Diane Drain, a Phoenix bankruptcy attorney.

That includes some people who probably don't have the $1,500 or so needed to hire an attorney to file a claim.

"Many of those who could afford to file and thought they needed to file have already done so," Drain said.

Whatever the reasons, metro Phoenix bankruptcy filings have dropped in six of the past eight months. Compared with year-earlier levels, they have declined for 10 straight months, with November's tally marking the sharpest decrease since before the recession began.

A similar trend is occurring throughout Arizona, where the 2,341 November filings were down nearly 29 percent from the prior year and also were the lowest total since February 2009.

Chapter 7 filings, which allow debtors a fresh financial start and thus are relatively friendly to borrowers, accounted for more than 80 percent of bankruptcies for metro Phoenix and Arizona overall. Chapter 13 debt-reorganization plans accounted for most of the rest.

Nationally, the 100,980 consumer filings for November were down 12 percent from November 2010 and 5 percent lower compared with October of this year, according to the American Bankruptcy Institute, using data from the National Bankruptcy Research Center.

"The drop in consumer filings throughout the year reflects the continued deleveraging of the U.S. consumer after years of expanding consumer debt," said the ABI's executive director, Samuel Gerdano, in a statement.

by Russ Wiles The Arizona Republic Dec. 7, 2011 06:18 PM




November debt filings in Phoenix area hit 3-year low

Reuters: Business News

National Commercial Real Estate News From CoStar Group

Latest stock market news from Wall Street - CNNMoney.com

Archive

Recent Comments