lazar
02-08-2005, 03:16 PM
Bankruptcy rate retreats
Drop outpaces nation
By Eric Engleman
Puget Sound Business Journal (Seattle)
Updated: 7:00 p.m. ET Jan. 30, 2005
The number of businesses filing for bankruptcy in western Washington fell a striking 10 percent last year to the lowest level since 2001. That decline far outpaced the national average and marked another sign that the regional economy is beginning to recover.
At the same time, the number of personal bankruptcies, which make up the vast bulk of total bankruptcies, remained high as workers laid off during the recession continue to reach the financial breaking point.
Personal bankruptcies fell by 3.63 percent in western Washington to 28,529. It was the first decline after three consecutive years of record highs, though it represents the second-highest number for that category in the past decade, according to U.S. Bankruptcy Court.
Business bankruptcies in western Washington, on the other hand, fell 10.23 percent to 430 cases. By comparison, for the fiscal year ended Sept. 30, 2004, business bankruptcies nationwide declined by 3.8 percent.
"That would fit with the fact that the Puget Sound economy has been growing faster than the nation since we turned the corner," said Dick Conway, founder of Conway Pedersen Economics Inc. of Seattle.
Full calendar-year statistics for national bankruptcies aren't available yet.
Combining both business and personal cases, total bankruptcies in western Washington dropped by 3.74 percent last year to 28,959.
Many of the personal bankruptcy cases involve workers who lost their jobs during the recession, said Todd Tracy, a bankruptcy attorney at the Seattle law firm of Crocker Kuno Ostrovsky and former chair of the Federal Bar Association's bankruptcy section.
These workers, who have tapped their savings and credit cards to pay the bills, don't have the resources to cope with unexpected medical expenses, a divorce or the failure of a business venture, Tracy said.
"People have held out as long as they can, and now they've reached the end of the line," he said.
Washington lost 115,700 private-sector jobs during the recession that lasted from January 2001 to June 2003, and it has recouped only 76,600 of those, according to the most recent data from the state Employment Security Department.
Chapter 7 bankruptcies, in which a debtor keeps certain exempt property while the rest is sold to repay creditors, remain the most common type of bankruptcy in western Washington, with 23,402 cases in 2004.
Chapter 13 cases, in which the debtor pays back creditors in installments over three to five years, was second, with 5,450 filings.
Chapter 11 bankruptcies, which allow businesses to continue operations while formulating a plan to repay creditors, fell 29.61 percent last year to 107.
Western Washington's bankruptcy court ranks 15th out of 94 in the country for the number of bankruptcies filed.
Total U.S. bankruptcies fell 2.6 percent to 1,618,987 in fiscal year 2004.
URL: http://msnbc.msn.com/id/6888659/
Drop outpaces nation
By Eric Engleman
Puget Sound Business Journal (Seattle)
Updated: 7:00 p.m. ET Jan. 30, 2005
The number of businesses filing for bankruptcy in western Washington fell a striking 10 percent last year to the lowest level since 2001. That decline far outpaced the national average and marked another sign that the regional economy is beginning to recover.
At the same time, the number of personal bankruptcies, which make up the vast bulk of total bankruptcies, remained high as workers laid off during the recession continue to reach the financial breaking point.
Personal bankruptcies fell by 3.63 percent in western Washington to 28,529. It was the first decline after three consecutive years of record highs, though it represents the second-highest number for that category in the past decade, according to U.S. Bankruptcy Court.
Business bankruptcies in western Washington, on the other hand, fell 10.23 percent to 430 cases. By comparison, for the fiscal year ended Sept. 30, 2004, business bankruptcies nationwide declined by 3.8 percent.
"That would fit with the fact that the Puget Sound economy has been growing faster than the nation since we turned the corner," said Dick Conway, founder of Conway Pedersen Economics Inc. of Seattle.
Full calendar-year statistics for national bankruptcies aren't available yet.
Combining both business and personal cases, total bankruptcies in western Washington dropped by 3.74 percent last year to 28,959.
Many of the personal bankruptcy cases involve workers who lost their jobs during the recession, said Todd Tracy, a bankruptcy attorney at the Seattle law firm of Crocker Kuno Ostrovsky and former chair of the Federal Bar Association's bankruptcy section.
These workers, who have tapped their savings and credit cards to pay the bills, don't have the resources to cope with unexpected medical expenses, a divorce or the failure of a business venture, Tracy said.
"People have held out as long as they can, and now they've reached the end of the line," he said.
Washington lost 115,700 private-sector jobs during the recession that lasted from January 2001 to June 2003, and it has recouped only 76,600 of those, according to the most recent data from the state Employment Security Department.
Chapter 7 bankruptcies, in which a debtor keeps certain exempt property while the rest is sold to repay creditors, remain the most common type of bankruptcy in western Washington, with 23,402 cases in 2004.
Chapter 13 cases, in which the debtor pays back creditors in installments over three to five years, was second, with 5,450 filings.
Chapter 11 bankruptcies, which allow businesses to continue operations while formulating a plan to repay creditors, fell 29.61 percent last year to 107.
Western Washington's bankruptcy court ranks 15th out of 94 in the country for the number of bankruptcies filed.
Total U.S. bankruptcies fell 2.6 percent to 1,618,987 in fiscal year 2004.
URL: http://msnbc.msn.com/id/6888659/